Cyprus Government and leaders of the parliamentary parties agreed Friday in a broad meeting for the economy under President Christofias, on the need to take direct measures to strengthen public finances.
During the meeting there was a wide consensus for a package of direct economic measures to be brought before the Parliament for voting within three weeks, after consultation with the social partners.
The package includes the majority of government proposals on pensions, as well as measures to increase public revenues and structural measures.
They also agreed on the need for medium and long term measures which will be discussed during a new meeting next Monday, between the parties and the Government.
Speaking after the meeting Government Spokesman Stephanos Stephanou said that there was a broad field of common understanding and consensus on forming a joint package of direct economic measures to be discussed with the social partners.
He added that there was willingness from both the Government and the parties for the assumption of a joint responsibility for the promotion of the measures.
Stephanou pointed out that the Government submitted a package of economic measures, adding that this is not a closed package and that through discussion with the parties, the Government is prepared to introduce and enhance the package during Monday’s meeting.
“From today’s meeting I keep the climate of consensus and common understanding that has prevailed, which is very important in order to address the various problems that have to be solved, concerning the streamlining and rationalizing of our economy,“ he said.
The Government has proposed a three-year programme for the reduction of the budget deficit. The programme aims at the containment of public expenditure, with the abolishment of semi-governmental organizations that have fulfilled their life cycle and the abolishment of vacant job positions in the civil service that are not considered as necessary.
The programme also includes the reduction of the civil service employees, with the adoption of a policy providing for only one employment for every four retirements, aiming at reducing the number of civil servants by 5,000 within the next five years, as well as the notion of interchangeability in the civil service.
The government also proposed the reduction of the salaries of the newly employed in the civil service, as well for the commencement of the dialogue for the fairer distribution of the Cost of Living Allowance (COLA).
With regard to the pension system, the measures include the inclusion of newly employed civil servants in the Social Security pension fund instead of the Government Employees pension scheme, as well as the calculation of the retirement benefit and the pension according to the average of the salaries of the last thirty months instead of the final salary.
The proposed measures on the pension scheme also include a civil servants contribution to the pension scheme, the readjustment of the contribution rate to the fund for widows and orphans, as well the abolition of the pensions` automatic adjustment for employees who benefit from general increase to the civil servants salaries.
In relation to the measures for the increase of public revenues, the package includes the completion of the discussion of the bills pending for the tackling of tax-evasion, the review of a tax on real estate for the next three years, the introduction of a levy for all registered companies and the introduction of a tax levy on the benefits from the town planning zone changes for commercial development.