Georgiades rejects bank workers’ provident funds demands


By Stelios Orphanides

Finance Minister Harris Georgiades told bank workers’ union Etyk on Friday not to expect compensation over and above what they have already been promised for losses incurred by their provident funds in the 2013 banking crisis.

“It has to be understood that the state, funded in its entirety by tax-paying citizens, operates within certain limits and has to take decisions in a responsible manner to the benefit of the entire society,” Georgiades said in a written statement emailed by the ministry following a meeting with the union. “The government acknowledges that the mistakes and omissions of the past have caused losses to our fellow citizens, including bank workers”.

Etyk demands taxpayers cover 100 per cent of the losses, embarking on a campaign to gain support from political parties. Akel, Diko, and Solidarity already pledged to back the demand.

The minister said more than 1,000 private sector provident funds with €1.1bn in bank deposits suffered losses totalling €763m in March 2013, when Cyprus agreed to its bailout terms.

The latter provided for the winding up of Laiki Bank, as a result of which depositors lost all their funds in excess of €100,000, and the recapitalisation of Bank of Cyprus with 47.5 per cent of uninsured deposits.

Under the scheme, members will be compensated for up to 75 per cent of their losses with a €100,000 cap for each member.

While only one -tenth of around 60,000 provident fund members who will benefit from the new scheme were employed at the time by Bank of Cyprus and Laiki, bank workers will benefit from more than €216m of the €393m made available for this purpose, Georgiades said as “their shares were by far the biggest”.

“But it would not be reasonable to disburse another €88m in taxpayer money which in its entirety would flow to 1,900 bank workers,” who make up 30 per cent of all affected staff and 3 per cent of all beneficiaries, to compensate them for three-quarters of their loss after their compensation has already reached €100,000, he said.

“At the same time, let me remind of the government’s decisive efforts as a result of which no bank worker lost their job, even after banks went down, as opposed to many of our fellow citizens in the private sector,” Georgiades said.

“I believe that the support extended to the provident funds is substantial, although legislation treats funds as institutional investors, as the Fiscal Council pointed out,” the minister said, in reference to a public intervention of the budget watchdog accusing provident fund management committees of negligence.

As institutional investors, they had a responsibility for “the rational and prudent management” of administered funds, the council said on Tuesday, adding that giving in to demands to further increase the compensation could create a moral hazard, systemic risks, and encourage other groups to follow suit.

Just a day later, Asdyk, a civil service union, said that while the government was prepared to compensate institutional investors, it refused to gradually restore the earnings of public sector workers, reduced as part of the fiscal consolidation measures taken five years ago.


About Author

Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • Cydee

    “Please Sir, i want more……”

  • Philippos

    Bravo Charis..and look who is supporting this. AKEL whose moronic President was instrumental in causing and / or failing to prevent this mess in the years before 2012. It just shows that DIKO, AKEL and those others whose name I constantly try to forget only know how to spend our money and have NO IDEA how to make it, (other than the obvious of course, but then its not for us, is it?)

    • Neroli

      Yes bravo Hari but I was getting a little worried about him! I thought he was turning!

      • Terryw45

        Depends on the size of the brownie, (everything has a price!)

      • Philippos

        He is first and foremost a politician, so of course, twisting and turning are all part of the piece, but so long as we can keep him going in the right general direction that would be a triumph for the nation

  • konstabo

    harris has no qualms in asking the taxpayers to pay for his and his pals the politicos mistakes which caused all this mess and the bankrupsy of the state , but when a hard working citizen who save all his life for his retirement asks for his own pension fund returned to him , harris becomes irate
    and shows a disturbed sense of reality claiming that pention funds , a minuscule amount compared to the debt caused by the bankers and politicians would be way to much additional debt for the taxpayer to consider and could jepertyse the future of cyprus claims harris…..

    • konstabo

      taxpayers are already paying and they will be paying for a very long time my friend harris to insure that the politicians and the bankers who caused all this mess will not themselves incur any losses but when an innocent and hardworking citizen asks for what is rightfully his , he is accused of many things while the politicos pass him the bill to pay and pay and pay so that they themselves and the bankers who caused all this mess dont have to loose a single red cent of there own money…..

    • Terryw45

      Cyprus has more civil serpents (per capita) than any other EU country, their salaries, and pensions are generated by taxpayers, you and me, would they be employable in the private sector ? A new broom sweeps clean, support Phedonas’s (Paphos mayor) protection fund, at least he is trying to drag Cyprus into the 21st century. There is hope, but…………..

    • Philippos

      The point is that the Government doesn’t have the money to compensate everyone who loses something. Anyway, its just passing our money around if you do that and governments are very inefficient at that. Quite a lot gets stuck to things on the way. Cyprus has to wake up to CONSEQUENCES or we are finished. At some point the pot will boil over

      • konstabo

        they dont mind passing it around to save the bankers and the politicians though do they , but when it comes to a hardworking citizen who needs it for there retirement all of a sudden they remember that the state just cant go around helping everybody who looses there money even if that loss was caused by them but for themselves they will gladly sacrifice even there own mother if need be so that they can have all those special thing that they love like lots of money……