Nicosia, Cyprus. Public servants’ union Pasydy said on Wednesday that concerns over an alleged expansion of the state wage bill do not reflect reality, responding to reports linking rising personnel costs to the cost-of-living allowance, annual increments and potential general salary increases.
Budget projections
Pasydy said projections contained in the finance ministry’s standard budget circular are part of the routine process followed each year in preparing state budgets and should be viewed in that context.
According to the union, the estimates are intended to account for all relevant economic parameters and do not in themselves indicate an unsustainable increase in public sector spending.
Cost-of-living allowance
Addressing the issue of CoLA, Pasydy said a permanent agreement had recently been reached between the government and social partners for the gradual restoration of the mechanism in line with its longstanding principles.
The union said the agreement had helped restore stability and balance in labour relations.
Pasydy added that safeguards had been introduced, including the activation of CoLA only when inflation growth in the previous year is positive, as well as a 4 per cent cap on the annual increase used to calculate the allowance.
“In light of the above, the issue of CoLA should now be considered settled and fully manageable by all parties,” the union said.
Salary increases and increments
On the question of general salary increases and annual increments, Pasydy said it was natural for the finance ministry to factor such costs into medium- and long-term fiscal planning.
The union said the last general salary increase for public servants took effect on January 1, 2009, and that no general increases had been granted since then because of the financial crisis and the fragile economic environment that followed.
Pasydy also said that, in coordination with other major trade unions, it had adopted a responsible approach throughout the period by refraining from submitting claims for general pay rises, taking into account the needs of the Cypriot economy.