Cyprus. Finance Minister warns of danger of destabilization of economy if restoring pension payments
Cyprus’s economy faces the danger of destabilization as it still struggles to fully recover from the 2013 crisis, as a result of recent court decisions declaring illegal cuts to salaries and pensions of public servants, Finance Minister Haris Georgiades said on Wednesday.
“Fully restoring cuts in the salaries of public employees in compliance with the court decisions involves a potential danger of destabilization of the economy”, Georgiades said.
Public servants had their salaries, pensions and one-off payments at retirement cut by as much as 25 percent as part of austerity measures demanded by international lenders in return for a 10 billon euro bailout in March, 2013, provided to Cyprus to avoid a complete collapse of the economy.
Cyprus’s Supreme Court accepted recourses by several serving and retired public employees against both the cuts in salaries and one-off retirement payment.
The government has already paid a total of 2 million euros to the applicants to comply with the judgement of the court.
The court ruling is not automatically applicable to all employees who had their salaries and pensions reduced, as each one has to file an individual recourse to the court and obtain a decision.
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