Cyprus's parliament passed a controversial privatisation bill Tuesday hours before a deadline to receive the next tranche of a 10-billion-euro ($13.8 billion) international bailout.
Following the vote, praised by the government but still a source of concern to unions, Nicosia can now expect to receive 236 million euros in rescue aid.
The bill passed during an emergency session by a vote of 30-26, with no abstentions, after MPs failed last week to adopt a previous version.
The government altered the bill to ensure it got a majority backing, because another rejection would have jeopardised the island's bailout programme.
The amended bill said the terms and conditions of workers at ports, power and telecoms authorities, which are earmarked for privatisation, would be safeguarded.
That garnered the backing of the small centre-right Diko party, which had abstained during last week's vote.
But despite assurances under the amended bill, hundreds of protesters gathered amid a heavy police presence outside parliament to shout down the bill, calling it a "sell-off of national wealth".
Staff fear there will be layoffs to make the utilities attractive to buyers, which would throw them into the job market at a time of record unemployment.
During Tuesday's vote, telecoms and electricity unions held a work stoppage.
There was no immediate reaction from the unions, but there are fears that there could be more industrial strife as the privatisation process moves forward.
Government spokesman Christos Stylianides said the vote "restores our country to the level of reliability and credibility that we won last year, during which the Cypriot people made great sacrifices."
Finance Minister Haris Georgiades said that "today's decision by parliament opens the way for modernisation and reform."
"The programme of denationalisation, apart from our obligation, is an opportunity to attract investors to strengthen our competitiveness and productivity."
"Financing for... Cyprus is secured. The road to stability and restoration of our credibility and economic recovery remains open," he added.
The government said it needed to pass the legislation for the sale of state utilities by Wednesday to meet conditions set by the European Central Bank, European Commission and International Monetary Fund.
Nicosia said this was critical to avoid jeopardising the credibility of efforts to restore stability after the March 2013 bailout deal, which was accompanied by a severe banking crisis and plunged the already struggling economy into deep recession.
The troika of international lenders is demanding that Cyprus raise 1.4 billion euros through a two-year programme of privatisations.
But critics fear the government will underprice the utilities and the move will damage workers and consumers alike.
The sell-off is part of a bigger package of measures demanded by the troika to get the budget deficit under control and the economy back on a healthy footing.
The government has had to raise further revenues by hiking taxes, and also slash spending.
The recession has now bottomed out, and the European Union predicts the economy will start growing again next year.
Cyprus’s parliament passed a controversial privatisation bill Tuesday hours before a deadline to receive the next tranche of a 10-billion-euro ($13.8 billion) international bailout.
Following the vote, praised by the government but still a source of concern to unions, Nicosia can now expect to receive 236 million euros in rescue aid.
The bill passed during an emergency session by a vote of 30-26, with no abstentions, after MPs failed last week to adopt a previous version.
The government altered the bill to ensure it got a majority backing, because another rejection would have jeopardised the island’s bailout programme.
The amended bill said the terms and conditions of workers at ports, power and telecoms authorities, which are earmarked for privatisation, would be safeguarded.
That garnered the backing of the small centre-right Diko party, which had abstained during last week’s vote.
But despite assurances under the amended bill, hundreds of protesters gathered amid a heavy police presence outside parliament to shout down the bill, calling it a “sell-off of national wealth”.
Staff fear there will be layoffs to make the utilities attractive to buyers, which would throw them into the job market at a time of record unemployment.
During Tuesday’s vote, telecoms and electricity unions held a work stoppage.
There was no immediate reaction from the unions, but there are fears that there could be more industrial strife as the privatisation process moves forward.
Government spokesman Christos Stylianides said the vote “restores our country to the level of reliability and credibility that we won last year, during which the Cypriot people made great sacrifices.”
Finance Minister Haris Georgiades said that “today’s decision by parliament opens the way for modernisation and reform.”
“The programme of denationalisation, apart from our obligation, is an opportunity to attract investors to strengthen our competitiveness and productivity.”
“Financing for… Cyprus is secured. The road to stability and restoration of our credibility and economic recovery remains open,” he added.
The government said it needed to pass the legislation for the sale of state utilities by Wednesday to meet conditions set by the European Central Bank, European Commission and International Monetary Fund.
Nicosia said this was critical to avoid jeopardising the credibility of efforts to restore stability after the March 2013 bailout deal, which was accompanied by a severe banking crisis and plunged the already struggling economy into deep recession.
The troika of international lenders is demanding that Cyprus raise 1.4 billion euros through a two-year programme of privatisations.
But critics fear the government will underprice the utilities and the move will damage workers and consumers alike.
The sell-off is part of a bigger package of measures demanded by the troika to get the budget deficit under control and the economy back on a healthy footing.
The government has had to raise further revenues by hiking taxes, and also slash spending.
The recession has now bottomed out, and the European Union predicts the economy will start growing again next year.
