CYPRUS
A court has ruled that pay cuts imposed on Cypriot Public Servants as part of an austerity drive in 2012 were unconstitutional — a decision that could cost the Government around €200 million (A$315.5 million) a year.
The court said a freeze of incremental pay rises, a 3 per cent staff contribution to pensions and a reduction in pay — all of which were part of the austerity drive — were in violation of Article 23 of the Constitution regarding the protection of the right to property.
The State has 42 days to appeal the decision.
In its first official reaction, the Government said it would study the decision together with the State Legal Service to see how to address the matter.
Spokesman for the Government, Prodromos Prodromou (pictured) said it was a decision that had great consequences for the country.
He said President, Nicos Anastasiades and Minister for Finance, Harris Georgiades had been in touch with the Attorney-General’s Department, which would be studying the case.
“In any case, the Government will exhaust every possibility to ensure two highly important objectives: the stable course of our economy and society’s sense of justice,” Mr Prodromou said.
The fiscal consolidation measures of 2012 — affecting only the public sector and passed by the Parliament — included a general wage and hiring freeze, a 10 per cent drop in hiring salaries and up to 12.5 per cent reductions in the pay of existing staff.
On top of that came an extraordinary levy on wages in both the private and the public sectors, which was phased out in 2016.
The measures helped reduce the Government’s staff expenses to €2.2 billion (A$3.4 billion) in 2015 from €2.9 billion (A$4.5 million) in 2011.
Nicosia, 31 March 2019
