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The new privatization plan for Cyprus: another blackmail from the Troika
by Leonidas Vatikiotis
9 March 2014

In the middle of lethal fire is once again the Cyprus. On the one hand are the efforts of President P. Anastasiadis to close the Cyprus problem, requiring a solution which looks like to dichotomous Annan plan, which had rejected a decade ago from the Cypriot people by referendum with huge majority. Joint statements by the President of the Republic of Cyprus, Nikos Anastasiadis, with the occupation leader Eroglu, as brought forward under the relentless pressure of the Americans, foreshadow the worst, ie a solution that will primarily meet the Turkish demands. In combination with the negative international environment does not allow anyone to be confident, much more to adopt the logic of waiting. Waiting the outcome of negotiations, which may take the form of an urgent matter and to close in 3-4 months to form an opinion perhaps will be too late to overthrow the dissolution plans of the Republic. This attitude constitutes evasion, ostrich and conceal of the unacceptable concessions already made, predetermining, unfortunately, the result!

On the other hand, Cyprus has turned into firing range of brutal neoliberalism espoused by the Troika. The austerity programs have already been implemented, with the political responsibility lies first and foremost the government of AKEL in Cyprus which called the Troika and then the current government, of Anastasiadis ’s have caused unprecedented for the island social contradictions . Unemployment topped the December 2013 to 17.5 % , while in the streets of Nicosia increasingly see homeless people and beggars, picture unthinkable just two years ago. At the same time , public debt increased, just as happened in Greece ! From 15.04 billion at the end of 2012 reached 18.15 billion at the end of 2013 .

Procedures express everywhere

Now the Troika again puts the knife to the throat Cyprus, pushing the political leadership to accelerate the privatization of three major semipublic enterprises. Fast track procedures in the ’result’ of Cyprus , fast track procedures on the sellout of public wealth and enterprises, which guarantee the financial independence , constant flows of public funds and social welfare. Two developments are far from random or independent . The advent of the representatives of the IMF and the EU in conjunction with the international vilification of Cyprus downgraded its international prestige and narrowed its negotiating capabilities , while the ongoing sell-off of public wealth , will weaken the economic base to support the Republic of Cyprus and will undermine social cohesion, facilitating the implementation of the new plan Annan .

The tool leverages the Troika, in faithful replication of misery in Athens for nearly four years, is extortion. The pistol on his temple, reminding the ... best days of colonialism ! So the threat has been employed in recent days is as follows : You vote in favor of privatization or not get the next tranche of EUR 186 million. Under this threat, which obviously just facilitated the government Anastasiadis who had no qualms against privatization (even AKEL consented when he was in power ... ) the Cabinet approved Friday, February 14th with the relevant bill, then on Monday, February 17 , introduced in the House for debate . The bill Thursday, February 27 was rejected to be reintroduced in the House Tuesday, March 4 , having incorporated amendments proposed. Its main provisions , the famous road map of privatization , which should be a state law until the meeting of eurozone finance ministers (Eurogroup) on March 10 to approve the dose , provides for the sale of the Electricity Authority of Cyprus, Cyprus Ports Authority and Telecommunications Company Cyta. Vertical opposition to the bill on the privatization of the expected recovery of 1.4 billion euros , expressed AKEL and EDEK .

The value of under privatization semipublic enterprises is much bigger. The value of Cyta for example estimated at 4 billion euros , while from the Cyprus Telecommunications Authority , which sooner or later will get and this in turn to sell-out, the public receives annually 80 million. Amount to be lost if privatized, enjoying as a price a short-term revenue .

Third Turkish invasion

“The problems that will be created in Cyprus from the privatization of semipublic organizations are not just financially, as their foundation was not simply an economic decision ,”says Spiro Panagis , president of the Pancyprian Independent Trade Union of Municipal Workers , Parastatals and Local Authorities. “Suffice it to say that from 1974 to 1981 did not get any increase in our wages. In the first year, in order to serve the hundreds of thousands of refugees were working seven days a week. Therefore, if today sold the semi-state owned enterprises given the open issues that has the island means that we will become slaves . It is equivalent to the third Turkish invasion”, said Spyros Panagis.

It is worth mentioning that Cyprus has already negative experience of privatization. The most typical example is the airport of Larnaca , which is privately owned and employs very few Cypriots. Most of the staff are coming from Community and particularly from Eastern Europe, working with much lower wages than the average Cypriot .

“The electric company (AHK) has an average yield of only 4.5 % of the capital, because plays a social role. Anyone who will invest it becomes readily apparent that would not accept such performance. Mathematically so we can assume that the price of electricity will rise,”said Andreas Michaelides , district secretary of the Pancyprian Organisation of Personal Freedom Electricity Authority ( EPOPAH) of Paphos. “Also , the privatization roadmap contains no mention or provision for thousands of families of workers and pensioners in AHK. Should the cost resulting from labor and pension rights of these families will be transferred to the state and then the investors will receive only the profits from AHK employing possibly non- Cypriot citizens? The most serious problem currently facing the state and the Cypriot people is the scourge of unemployment and lack of growth . The planned sell-off of organisms not help to improve this problem”, says Andreas Michaelides .

No benefit on prices

Talking about the AHK, privatization will not bring any benefit on prices. The known neoliberal promise that privatization scales down prices has no basis given the inelastic nature of prices. Today 80 % of the invoice is completely inelastic , with 60 % coming from fuel ( fuel oil ) and 20 % is taxes “. And the payroll does not exceed 6% of the total budget , so no one can argue that there is excess staff or sinecure . But most importantly, is something else” for Andreas Michaelides, who insists to recalls thta Ireland too had obligation from memorandum to sell electricity, however, get off from the Memorandum without being sold out, though she does not have any open issues that has to Cyprus. “When countries like the EU , with huge energy market, with pluralism in the form of electricity generation (nuclear, natural gas, wind and hydroelectricity ) and with the huge advantage of their electrical networks to be interconnected between their countries consider that their interests press them to re-nationalize electricity, after the privatization failed, is possible a small, isolated and semi-occupied Cyprus to selling off such invaluable wealth?”

Obviously the state - pariah that is expected to exist after the implementation of the Annan Plan No. 2 will not have need of healthy and robust businesses such as Cyta, AHK, etc. Colonies have no need of such organizations ...

(This article was published in Greece (weekly magazine Epikaira) on 20 February. Updated: March 1st, 2014 )

Leonidas Vatikiotis