Financial Mirror (Cyprus)
A perfect storm is brewing
Without COVID to keep people in check, the government is wobbling to the finish line like a lame horse in the Grand National.
After spending a truckload in state support to keep staff and businesses afloat during the height of the pandemic, the government needs to find more cash to soften the blow of soaring inflation.
Although the Presidential Elections aren’t until next year, the Anastasiades administration has gone to sleep at the wheel. A perfect storm is brewing for another recession as the global economy runs out of steam.
Consumer goods, food prices and the cost of energy and petrol at the pumps are only going in one direction, but the government has no clear plan of action.
Granted, local politicians haven’t made ridiculous statements about how people could get better-paid jobs to ride out the cost-of-living crisis.
As if being a low paid worker is a lifestyle choice because you enjoy the long hours and skipping meals to save money.
Some UK MPs have suggested that becoming a company CEO would be the best remedy to fight soaring inflation.
The UK job market may have more vacancies than registered unemployed but implying that people can jump out of bed one morning and become a boardroom warrior shows a wonderfully bizarre disconnect.
Such as another UK MP advising people to buy supermarket brands to save money – better put that lobster back in the tank then.
President Anastasiades also came up with the bright idea that the index-linked cost of living allowance would help salary earners in Cyprus.
Most people on low incomes do not get CoLA; it’s the privilege of the civil service and some professions.
Basically, the president is championing the high-earning elite classes to get paid more by a government, counting its pennies to survive the crisis.
In the past, international lenders highlighted CoLA as what made the public sector less efficient and burdening state finances because it was not performance linked.
Bankers and economists argue that higher wages also feed into inflation as companies need to tighten their belts as costs rise sharply.
The main driver of inflation is energy prices and global goods prices; this will dampen consumer demand and trigger unemployment.
Paying more to those who already earn big salaries is not the answer to tackling this cluster bomb to the economy.
It’s good to know the millionaire president has a handle on the situation by fanning the rich-poor divide.
There was no response to scores of angry livestock breeders who tried to set fire to the Presidential Palace while the police looked on in their usual approach to law and order.
Only after goat and sheep farmers set bales of hay ablaze outside the gates of government did the police decide they should be seen to be doing something after the chaos subsided.
Farmers running amok in the capital is a consequence of the government mishandling the halloumi file.
Major export and darling of the supermarket chains – nobody can quite agree on how the squeaky white cheese should be made.
Halloumi made the traditional way with goats/sheep milk doesn’t quite tickle the palate of an international audience.
Dairy producers are also paying below cost to goat and sheep farmers, struggling with rocketing animal feed prices.
Maybe a clever politician should suggest they work in a bank to ease their pain, although bank branches are shrinking.
Again the government agreed the farmers were right to be angry without really offering a road map out of the halloumi fiasco and rising prices.
They blamed the cheesemakers, who were singled out as greedy profiteers.
Mismanaging the halloumi brand, fumbling over inflation, and Cypriot families struggling to survive are ready-made ammunition to fire at the government.
But the main opposition parties are more interested in picking the next president who must be male and out of touch.
Instead of improving working people’s lives, the socialists at AKEL are too busy trying to repackage a candidate tainted by the current administration and dripping in the failure of the Cyprus problem (Varosha has fallen).
Apart from the lack of social justice, the legal system is also a resounding failure.
A reluctance to reform the legal system has placed Cyprus bottom of the EU’s justice scoreboard for impartiality, efficiency and quality.
Of course, our next leader is going to change all that.