President Nikos Christodoulides on Saturday said he is “optimistic” that an agreement can be forged regarding the future of the cost-of-living allowance (CoLA), with employers refusing to back down from their rejection of the government’s latest proposal over the matter.
“Certainly, the outcome was not positive, but under no circumstances are there dead ends on such issues, and I am optimistic that, through our efforts, we will reach a positive result,” he said on the sidelines of a conference.
Employers’ and industrialists’ federation (Oev) and the Cyprus chamber of commerce and industry (Keve) had late on Wednesday night rejected the government’s proposal to resolve the matter, describing the proposal as “unsatisfactory” and saying that it “cannot be accepted and signed as it is”.
They added that a “catalyst” in their final decision to reject the proposal was a provision “which calls on employers to authorise the finance and labour ministers to implement measures to extend CoLA to more beneficiaries”.
Their rejection of the government’s proposal had come shortly after trade unions had accepted it, with Union of Cyprus journalists leader Giorgos Frangos saying workers had acquiesced to the government’s proposal “in a spirit of prudence, consensus, and reconciliation”.
Newspaper Politis had reported last week that the government had proposed a gradual increase in the amount of CoLA paid over the coming 20 months.
As such, in line with the government’s proposal, the amount of CoLA paid would rise from its current rate – 66.7 per cent of the rate of the increase of the cost of living as a percentage of a worker’s salary – to 80 per cent on January 1.
This would mean that if the cost of living increased by four per cent, workers will receive a boost of three per cent to their salaries in CoLA payments, rather than the current 2.68 per cent.
The government’s proposal would see that rate increase to 90 per cent on July 1 next year, and then to 100 per cent on January 1, 2027, with payments being made once a year during years in which Cyprus’ real gross domestic product increases.
Additionally, the proposal foresees the introduction of a ceiling of a four per cent increase in the cost of living as the maximum amount payable.
If the proposal is also accepted by employers’ organisations, it will bring to an end a bitter and longstanding dispute over the matter, which in September had seen workers engage in a three-hour general strike which saw the island brought to a standstill.
On that day, public services and public transport were the most affected, with more than 50 flights and 15,000 airline passengers impacted by the strike, while trade unionists across the island took to the streets.
Earlier in the year, former Oev chairman Antonis Antoniou had expressed his distaste for CoLA, saying it “should have disappeared”.
“We believe that it should have disappeared. There are other tools for employees to achieve their progress, but we accept to continue it with some variations, with a modernisation which is consistent with the economic realities of recent decades,” he said.
His views were echoed by Keve general manager Philokypros Rousounides, who also described it at the time as “an anachronistic institution, which needs improvement or replacement with a new mechanism”.
