Bloomberg News

Cypriot Parliament Passes $1.1 Billion of Cuts Amid Strike

December 15, 2011

Dec. 15 (Bloomberg) -- Cyprus’s parliament passed a scaled- back fiscal consolidation package yesterday in a session disrupted by strike action by the civil servants’ union PASYDY.

The fiscal impact of the package was reduced to 855 million euros ($1.1 billion) over three years following a deal ahead of the vote, the chairman of the parliamentary finance committee, Nicholas Papadopoulos said in an interview yesterday.

The package included a two-year wage freeze in the public sector and cuts in social spending. It also included an increase in the defense levy imposed on companies managed and controlled in Cyprus, a tax on private sector workers whose income exceeds 2,500 euros a month and an increase in the value added tax rate to 17 percent from March 1.

The strike will continue today when the parliament meets to vote on the 2012 budget, PASYDY said in a statement on its website. The union asked its 15,000 members to disrupt Sunday’s municipal elections.

--Editors: Chris Peterson, Tim Farrand

To contact the reporter on this story: Stelios Orphanides in Athens at sorphanides@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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