NICOSIA (AFP) – Cyprus trade union leaders have extended a strike threat deadline for industrial action across the Mediterranean holiday island’s hotels to allow government mediation over demands on pay and conditions. However, talks so far have reportedly failed to bring the two sides closer together and hoteliers were meeting yesterday to discuss the current situation. Initially, unions had set a strike date of August 16 if negotiations got nowhere, but Labor Minister Christos Taliadoros has personally stepped in to try to defuse the crisis during the peak tourist season. His consultations with both sides will continue throughout this week, with a new deadline set by hotel workers for August 23. If employers and staff are still at loggerheads, a deadlock must be declared by the mediation process before that date. Unions have yet to decide the shape and form of the strike measures. A key stumbling block is the employers’ insistence that starting wages be reduced. The unions say pay for those entering the industry is already low and accuse hoteliers of seeking to squeeze out higher-paid Cypriot staff so that they can hire cheaper non-union labor from Eastern Europe. Since Cyprus joined the European Union on May 1, along with nine other countries mainly from Eastern Europe, the hotel industry has seen an influx of workers from fellow new members like Poland and Slovakia. Employers say they will meet other pay demands if starting wages are reduced. Tourism is a key economic sector, contributing 20 percent of the island’s GDP and generating more than $2 billion in revenues.