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State asks SGOs to show responsibility, and hand over cash
THE GOVERNMENT yesterday called on semi-state organisations (SGOs) to show a sense of responsibility to the state by agreeing to short-term loans that would put €200m into empty state coffers.
Asked whether payment of public workers’ December salaries would be put at risk if the SGOs refuse to loan the state money, government spokesman Stefanos Stefanou said that first and foremost, the SGOs needed to show a sense of responsibility to the state in these “difficult times”.
“We are at a very critical stage and it is everyone’s responsibility to help overcome these difficulties so we can move forward,” he said.
The government is seeking a three-month loan from the profit-making telecommunications and electricity authorities which the SGOs will get back with interest, he said.
“And the state needs that money now to be able to cover its financing needs in December where its obligations are very high due to the payroll and other end of year costs,” he added.
Telecoms company CyTA has already agreed to lend the state €100m from the workers’ pension fund at an interest rate of 5.5 per cent despite unions representing half its staff threatening strike action.
The electricity authority (EAC) put off a decision on whether to also loan the government €100m from the workers’ pension fund on Friday, choosing instead to wait until Monday’s discussion of the issue at the House Finance Committee.
The government needs to find approximately €400m this month to meet its payroll obligations, including public workers’ 13th salaries.
Finance Minister Vassos Shiarly has told the EU that Cyprus can meet its financing needs until the end of January but this statement rests on two conditions: that domestic investors, mainly banks, agree to roll over maturing debt; and additional financing is found, mainly from SGOs, to cover the end of year deficit.
Stefanou described the debate on the short-term loan requests as “unnecessary and harmful” to the economy.
Speaking to state broadcaster CyBC yesterday, presidential candidate Nicos Anastasiades accused the government of painting the picture that Cyprus could survive a few more months without an international bailout.
This aimed at prolonging negotiations with the troika beyond January and even after the February elections, he said, highlighting the possibility of a memorandum not being signed during the current government’s term in office.
Responding, Stefanou accused the DISY leader of trying to blackmail the government into signing a memorandum here and now when the sum that the banks will eventually need to recapitalise has yet to be clarified.