Vol. 77/No. 16      April 29, 2013

Jobs, wages and pensions are on the chopping block. According to the Wall Street Journal, the government also plans to make it easier for banks to seize a person’s home, raise retirement ages and cut health care.

The closure of banks for two weeks in March, capital controls limiting access to deposits, discussions about confiscating a portion of all deposits and the eventual “restructuring” of Cyprus’ two largest banks through confiscating large parts of uninsured deposits over $130,000 have been a learning experience for workers and others.

Today it is easier for millions to see that what is commonly viewed as deposits that “belong” to the depositor are simply loans to banks that may not be honored if they run into financial trouble. As a result more will be stashing whatever they can in the mattress.

The bank restructuring along with a package of government austerity measures that above all target workers are part of conditions imposed by Berlin and the so-called troika — the European Central Bank, European Commission and International Monetary Fund — for $13 billion in loans to the government of Cyprus. Workers’ pensions are among the funds deposited in Cypriot banks affected by the deal.

“Bank workers’ pension funds were held in the respective banks where they worked,” Loizos Hajicostis, president of the Union of Bank Employees of Cyprus (ETYK), said in a phone interview from Nicosia.

On March 30 and April 4, more than 8,000 workers joined protests against threatened layoffs and attacks on workers’ pension funds, Hajicostis said.

Some 300 Cyprus Airways workers demonstrated outside the Presidential Palace April 10 against measures that eliminate about 50 percent of the national airline’s 1,000 jobs and cut wages by 17 percent. The workers are also demanding protection of their pension funds.

Cyprus has been in recession for the past year with a nearly 15 percent official unemployment rate, a figure expected to rise much higher as austerity measures under the troika’s loan deal are implemented.

To maintain payments to the bondholders, the government has agreed to sell $520 million of the country’s gold reserves, driving already falling gold prices to a 15-month low.

In May 2011, Portugal became the third in the eurozone common currency bloc to receive “bailout” funds from the troika to avert a government debt default. Lisbon received $102 billion, conditioned on reducing the government’s budget deficit through spending cuts and raising taxes.

In early March this year hundreds of thousands of workers marched in Lisbon and other cities against the austerity plan.

On April 5 Portugal’s Constitutional Court struck down plans to reduce holiday bonuses for public workers and pensioners and cut sick leave and unemployment benefits.

Prime Minister Pedro Passos Coelho two days later vowed to replace these measures with further cuts to education, health care and social security programs.

Georges Mehrabian in Athens, Greece, contributed to this article.
 
 
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