Practices and methods applied by the Troika in 2013, in the context of the fiscal consolidation memorandum, are included as proposals in the study of the International Monetary Fund (IMF) to balance the state payroll, which has been increasing significantly in recent years, which worries the financial staff of the Government and the President of the Republic himself.
The Ministry of Finance commissioned the IMF to carry out a study, which is ready and which, according to information, describes the strategy that the Government should follow for the reform of the state payroll.
In recent days, a team of the IMF has been in Cyprus, as part of the technical assistance requested by the state for the rationalization of wage scales and the containment of state payroll costs. At the same time, the study, which is based on international and European standards, aims to increase productivity but also to correct any distortions found in the state machinery.
On Monday, the IMF staff will deliver the report with his recommendations to the Ministry of Finance, which has already been verbally informed about the proposals of the foreign technocrats.
They got a first taste of the IMF's recommendations and “wants” yesterdaythe members of the parliamentary Finance Committee, during the informal meeting they had in Parliament. Sources from the Parliament said that the technocrats from the IMF informed the members of the Finance Committee that among the recommendations included in the study to rationalize the state payrollis the reduction of the salaries of the workers in the state machine.
Indeed, as they explained to the deputies, the reduction of wages will come about through the limitation of benefits. Specifically, they requested the abolition of ATA, as it is granted today, and its connection with the productivity of civil servants. At the same time, propose the abolition of the 13th salarybut also granting increments every two years instead of every year that applies today.
In the study it is also proposed to fill all the positions of first appointment, as the IMF considers that with the existing structure of the State is not productive.
Additionally, they explained to the members of the Finance Committee their findings that the level of the state payroll is quite high in Cyprus compared to other European countries. They find that there is a large number of public servants who do not perform according to their salaries. They also believe that there is a large wage gap between the public and private sectors.
The IMF technocrats also cited their latest report on Cyprus, according to which the state payroll and public sector employment are at high levels, compared to other EU member states, while the increase in ATA strengthens interconnection of public sector wages with inflation. That report also stated that wage adjustments should be based on macroeconomic developments and productivity.
They will evaluate the proposals
Relevant government source he stated to “F” that all that the IMF proposes are just suggestions and it does not mean that they will be adopted. As he said, the proposals of foreign technocrats will be examined and evaluated. Before any decisions are made, these will be discussed with the trade unions.
It should be noted that the IMF also provides support to Cyprus for thesubmission of a request next October to the General Directorate for Structural Reform Support at the European Commission, with the aim of examining specific individual issues of the state payroll. It is recalled that this year the state payroll was increased by €500 million, while next year, based on the forecasts of the Ministry of Finance, it will increase by 4.9% and reach €4.25 billion
