Cyprus strike to shut down govt, airports

AP News
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Posted: Dec 14, 2011 1:45 PM
Cyprus strike to shut down govt, airports

Cyprus' airports and government offices will shut down Thursday in a daylong strike to protest a public-sector wage freeze and other austerity measures.

The island's two airports will close after air traffic controllers said Wednesday they will stage a 12-hour work stoppage to protest what they regard as the government's broken promise not to freeze their salaries as well.

The airport shutdown will affect more than 70 flights and 5,000 passengers, airports spokesman Adamos Aspris said.

Separately, the government worker union PASYDY said state-run hospitals will operate on a skeleton staff.

Municipal elections in the eurozone country are slated for Sunday and could be thrown into disarray after PASYDY urged members not to work then and to avoid voting.

Cyprus' communist-rooted President Dimitris Christofias publicly appealed to union leaders to let the elections run problem-free. "With all due respect to the unions and especially PASYDY, that's too much," he said.

PASYDY called for the stepped-up strike action a day after government workers briefly walked off the job to demonstrate against not being consulted on the austerity measures.

The union's boss, Glafcos Hadjipetrou, said government workers have already seen their incomes shrink by a tenth because of earlier salary rollbacks and suggested that more cuts are being discussed behind their backs.

"Today the numbers don't add up, tomorrow the numbers won't add up, and they're asking workers to cover the shortfall. This won't pass," Hadjipetrou said.

Finance Minister Kikis Kazamias dismissed what he called a "suspicious and dishonorable whispering campaign" that the government would move to cut government workers' Christmas bonus and tax their retirement bonus.

"I consider this action as a deliberate crime against the public interest," he told reporters.

Salaries and other benefits to the 70,000-strong public sector represented by powerful unions in the country of 800,000 take up a third of all government spending.

Dozens of union members on Wednesday descended on Parliament where lawmakers approved the two-year wage freeze and other deficit-fighting measures, including a sales tax hike from 15 to 17 percent and a levy on private sector salaries above euro2,500 ($3,250), also valid for two years.

Other measures include a tax increase on company dividends from 17 to 20 percent and slashing social handouts by euro200 million ($260 million).

Bills setting up a bank stability fund and enabling the government to backstop troubled financial institutions also were approved.

The sales tax increase will take effect in March. Lawmakers postponed a vote on raising the retirement age by a year to 64. A vote on the budget will take place Thursday.

The government is struggling to restore investor confidence following a string of credit rating downgrades this year _ mainly due to its banks heavy exposure to debt-shackled Greece _ that have taken Cyprus to the brink of junk status.

Kazamias earlier this month struck a deal with opposition parties _ which hold a majority in Parliament _ on the measures aimed at shrinking the deficit from around 6.5 percent of gross domestic product this year to 2.4 percent in 2012.

Without these measures, he warned that the country would likely need a bailout.

Kazamias said trade unions weren't consulted because he needed a swift agreement to avoid sanctions the island faces under EU rules if it doesn't agree on deficit-cutting measures by mid-December.