Cyprus MPs’ pay hikes cause ire

NICOSIA (Reuters) – Cyprus lawmakers were fending off strong criticism yesterday for awarding themselves generous pay rises while the island, struggling to contain its budget deficit, is freezing civil service pay. Members of Parliament approved a swathe of increases, ranging from upping the salary of the president of the republic and parliamentary speaker to increasing fringe benefits for MPs by between 8 and 40 percent. It was not immediately clear what impact, if any, the increases would have on a government budget advocating prudence in spending and pay freezes in the public sector. An official source referred questions to the finance minister, who was abroad. Salaries for the president and the parliamentary speaker have not been upgraded for more than a decade, over which time average salaries have increased by more than 50 percent. «They are long overdue,» said one MP who voted in favor of the motion. Unannounced, the proposals were approved by the island’s Cabinet on Wednesday and rushed through when Parliament convened in its last session before the summer recess began on Thursday. Several newspapers attacked the move. «It’s a scandal,» declared the Politis daily. «These increases coincide with a period of economic austerity for the public… and (they) did not expect such a provocation.» Green party MP George Perdikis, the one legislator who abstained in the vote which was otherwise carried with rare unanimity, was critical of the way the measure was rushed through. «I accept that there were issues (on remuneration) which required a review, but this should have been the subject of a public debate, not in secret,» he told Reuters. Cyprus has been struggling to contain high budget deficits in recent years to get into the eurozone by 2008, which requires a deficit of less than 3.0 percent. Its deficit was 4.2 percent of GDP in 2004 and is expected to fall to 2.9 percent this year. The reduction is contingent on a series of measures, including upping the retirement age in the civil service by three years to 63.

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