Cyprus-Forum.com

[Jerry]

Just seen this in the Mail, is Cyprus really going to go the same way as Greece, are things really this bad? I hope not, was hoping to buy a flat at last in Larnaca.

Leaders complacent as we hurtle towards a Greek-style abyss
By Loucas Charalambous Published on May 15, 2011 +
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THE BLOOD-STAINED episodes that took place in Athens last Wednesday served as yet another reminder of the tragic situation Greece finds itself in.

The country is in effect bankrupt and anyone following what is going on there knows that the vast majority of Greeks are going through a frightening ordeal.

And nobody can predict how much worse things could get, how long this disaster will last or how much more suffering the Greek people will be subjected to before signs of recovery appear.

In Cyprus, meanwhile, we have learnt nothing from the devastating crash of the Greek economy. Few Cypriots seem to understand that the distance separating our economy’s state, at this moment, from Greece’s is not that big. In fact, the speed at which we are heading towards a similar economic meltdown is much faster than Greece’s, in the last few years.

Some figures will give a clearer picture of what I mean. Greece hit bankruptcy with a public debt in the region of €340 billion. Our public debt is currently €18.2 billion. If we take into account that the population of Cyprus is one 15th that of Greece, it means that Greece’s public debt for every 750,000 Greeks is €22.6 billion.

This is not a very big difference. And if we consider that every year we need an additional €2 billion in loans to cover our deficits, it is no exaggeration to say that we are just a few steps away from suffering Greece’s fate.

The most worrying thing of all is the criminal irresponsibility with which our political leadership confronts the situation. Our leaders are watching passively as we move closer to the precipice, too scared to the take the necessary tough measures in case they disappoint the public servants, for whose wages and pensions we go deeper into debt every year.

On the day of the Athens clashes, Simerini published the contents of a letter, sent by Finance Minister Charilaos Stavrakis to the leaders of AKEL and DIKO, in which he referred to the measures discussed at a November 19 meeting. I was shocked by the extent of their political indifference.

At the meeting they said absolutely nothing about the issue described by Charilaos Stavrakis as “a time bomb” at the foundations of the economy - the scandal of the public sector pensions, which cost us half a billion euro a year without the beneficiaries contributing a cent to a pension scheme.

The only suggestions they made related to raising revenue through additional taxes on individuals and banks. An increase in the defence levy, from 15 to 20 per cent, was also discussed. This would constitute fraud, as the revenue from the levy is meant to go on defence. But AKEL and DIKO considered using the revenue to pay the salaries and pensions of civil servants.

When our political leadership is treating this precarious situation so superficially, what hope can there be of avoiding the Greek meltdown?

A few days ago, I read a prophetic comment made by the Greek comedian Harry Klynn as far back as 1983. He had said: “In 30 years, there will probably be no (prime minister) Andreas Papandreou. But there will be a bankrupt Greece with its people on the brink of economic destitution.”

Does anyone think that Christofias, Kyprianou and Garoyian are any better than the late Andreas Papandreou?