Cyprus bank workers protest over pension fears

Bank workers in bailed out Cyprus staged a work stoppage on Thursday over fears that pensions may be at risk, as more details emerged of biting austerity measures imposed on the cash-strapped island. The brief strike, followed by a protest march on parliament by around 1,000 smartly dressed bankers, comes despite reassurances by President Nicos Anastasiades that every effort would be made to preserve pension funds at the two banks in the eye of the financial storm. Bank employees' union ETYK called the two-hour stoppage over concerns that pension funds at failed Laiki and at the Bank of Cyprus are not being protected under the 10-billion-euro bailout deal with the IMF, European Commission and European Central Bank. Protesters who marched through Nicosia on Thursday carried banners reading, "Wake up Cyprus," "Hands off our jobs, hands off our provident funds" and "We are paying for mistakes of bankers." "Many, many thousands will come to protest against the verbal commitment," said George Georgiou, 35. "We want written commitments for safeguarding of our provident funds and jobs." The work stoppage had little effect on the public, timed as it was towards the end of usual banking hours. But some customers were taken by surprise and found the doors locked 45 minutes ahead of the 12:30 pm scheduled time. Iraklis Andreou, a 60-year-old who works in an office near Eleftheria Square in the city centre, had come as he had every day since banks reopened a week ago to cash a 300-euro cheque at a Laiki branch. He walked off with an air of resignation, saying he would return on Friday. Nigerian Godsun Sunday, 38, who works in the tourism industry, was unhappy. He had noticed some anomalies in his balance, and wanted some answers. "This is unbelievable. The whole thing is getting worse. The more complicated it becomes, the more it hurts," he said. There has been no significant labour unrest in Cyprus so far, but the bailout will force painful reforms, including higher taxes, downsizing the public sector, privatising some state-owned firms and drastically reducing the size of the bloated banking sector. According to details of the bailout deal that emerged on Thursday, Cyprus must still adopt 351 million euros in austerity measures in its 2013 budget before receiving the EU financial aid expected in May. "Over 2013, the authorities will rigorously implement the 2013 budget law with additional permanent measures of at least 351 million euros (2.1 percent of GDP)," says the memorandum of understanding, seen by AFP. Among steps Cyprus must still take are raising corporate income tax from 10 percent to 12.5 percent, hiking taxes on interest income to 30 percent and raising property taxes. On the spending side, it will have to end its practice of grants for acquiring first residences and making construction loans, cap the number of pensioners receiving Easter bonuses and reduce state and broader public sector pensions by between 0.8 percent and two percent. The new finance minister, Haris Georgiades, vowed on Wednesday to implement the bailout terms in full, saying the government would do "whatever it takes to fix our public finances and put our economy back on track for growth." Cyprus is already in recession, with unemployment of around 15 percent expected to grow sharply this year and next. Forecasts before the deal was agreed saw GDP contracting by 3.5 percent this year. Banks have been operating under stringent capital controls since they reopened after a near two-week lockdown prompted by fears of a run on deposits, but the central bank has been progressively easing the restrictions. It is still not known how long the controls will be in place. On Thursday, the central bank said the Bank of Cyprus, which has now acquired Laiki, and the rest of lenders in Cyprus are "operating normally within the restrictive measures." It added that "further relaxations are being considered for implementation soon." In Frankfurt, meanwhile, the European Central Bank held steady its main refinancing rate at a historic low of 0.75 percent, despite concerns about the fallout from the Cyprus bailout for the eurozone as a whole.