Bailout plan: trying to reason with the unreasonable
Stupidity is alive and well in Cyprus and it seems most of us are catching the disease. Can anyone add substance to the terms “pro-memorandum” and “anti-memorandum”? Why on earth do political parties try so hard to split us into these two groups? Why are the communists and labour unions antimemorandum? It is understandable for people to be split into those wishing a loan (from the Troika of the European Commission, European Central Bank and the International Monetary Fund), and those opposed to such financing. This is a clear choice. Another clear-cut option is to keep or abandon the euro as our currency or to return to the Cyprus pound (CYP).
For better or worse, our country decided to get a loan from the Troika and stick to the euro. The memorandum is simply the agreement we co-signed with our lenders and includes the terms of the interest rate, the repayment period and many other conditions, which we have to observe so that we can repay our debt. These “other conditions” have been set because Cyprus, as well as our lenders, believe that we did not keep our finances in order, wasting money left and right (public sector inefficiency, tax evasion, etc).
Also, these “other conditions” are in place in the memorandum to offer solutions to various structural problems in the economy and stabilise state finances so that when the bail-out is over and done with, we can function once again as an independent, democratic economy without the need for more lending schemes from the Troika. Until that happens, we have to stick to the memorandum not because the Troika expects us to, but because it is the right thing to do for our economy and people.
Many will argue that the memorandum/bailout plan enforces strict austerity measures and prohibits growth. On the contrary, it provides for social justice by cutting down on tax evasion and waste of funds which can be directed towards helping those in need in the form of pensions or other forms of help to the public.
Money saved by a more competent state can be used to promote the growth of the economy. It is true that up to now the government has not taken tough measures to put its house in order and has not properly invested in tools and sectors that will lead to real growth. A lot remains to be done to ensure a healthier, more productive economy.
These are mainly the segment of people who stand to gain from money wasted and the inefficiency of the public sector.
Deep down, they know that their paycheck and pensions do not reflect their contribution or the state’s abilities to pay in, but are not willing to part with their super privileges. I am not referring to civil servants with low incomes, but to the privileged ones who do not wish to give anything up. It is quite absurd that they are falsely suggesting that the existing inefficient and wasteful system is promoting social justice – just to secure the continuation of the opposite – social injustice.
We have to remember that in March 2013 we were declared bankrupt. Only Cypriots can be blamed for this bankruptcy – governments, political parties, privileged individuals, voters – and we all know it. Nobody was willing to give us a loan at the time except the Troika, giving us a last chance to put a short leash on overspending and put our house in order.
It appears that we’ve learned little from mistakes of the past. Do the opponents of the memorandum propose that the state should follow the bad example of the over-subsidised Cyprus Airways? In other words, not to take the much required corrective measures and allow our country to go bust?
Can we not agree, even at this late stage, on a formula and start functioning in a rational way? We only have to copy the examples of other European nations which employ better management practices resulting in fewer problems.
And why are communists and labour unions the most vocal in the anti-bailout camp? The main reason is that they seek to protect absurd and unjust vested interests which are bound to suffer if the right measures to curb the waste of money are adopted.
Once again, we are not proponents of cutting wages and benefits for the middle to low income strata. Have you ever heard the unions for example, to suggest the reduction of specific benefits of the privileged? Or specific measures to improve the efficiency of the civil service? Hardly.
Some of the successful measures adopted by other countries have been included in the memorandum. Instead of recognising the need to adopt these measures we are seeking to make a speedy exit. I agree that some conditions of the plan can be adjusted. For example, I would suggest a longer repayment period at a lower interest rate, something which we need to discuss again with the Troika.
What is absurd is trying to rid ourselves of the conditions of the rescue plan which aim to improve our economy, just to protect certain individuals who stand to profit from nonimplementation and maintaining the status quo.
Unfortunately, it seems that the privileged have the power to get their way with political parties, labour unions and the media. They try to convince us it’s bright and sunny while it’s pitch dark and we’re on the brink of agreeing with them. What we are witnessing is the theatre of the absurd. Something needs to change in the Cypriot society before it is too late.