12° Nicosia,
26 May, 2024

Minister of Labor to submit CoLA mediation proposal

Yiannis Panayiotou will discuss a potential solution to the Cost of Living Allowance impasse

Source: CNA

Minister of Labor and Social Insurance Yiannis Panayiotou said on Friday he would submit a mediation proposal to the social partners (trade unions and employers) to reach an agreement on the issue of the Cost of Living Allowance (CoLA).

Panayiotou who continues separate contacts with the social partners, met today with the trade unions of the public sector.

Stating that it is necessary to reach an agreement on the matter, Panayiotou added that “judging that a mediation proposal by the Ministry would contribute to this we have the intention to do so.”

He said that “the framework of the discussion is clear, CoLA will not be abolished, CoLA will not be paid at 100% and the agreement should be renewed.”

Commenting on a recommendation by the IMF against any upward revision of CoLA, the Minister noted that it is understandable for different views and approaches to be apparent on the matter.

He noted that the Ministry knows what affects public finance very well and has estimated all scenarios concerning the CoLA payment.

Whatever we have in mind and whatever will be submitted or agreed upon it will be within the fiscal capabilities and the capabilities of the economy, he added.

On his part Stratis Mattheou, head of PASIDY, the Public Servants trade union highlighted that Panayiotou next week would submit a mediation proposal.

During the financial crisis, Cyprus suspended the Cost of Living Allowance (CoLA). However, a transitional agreement in 2017 stipulated that CoLA would be granted annually if the economy exhibited growth during the previous year's second and third quarters. The agreement included incorporating CoLA indexation into basic salaries, which would amount to 50% of the annual increase in the Consumer Price Index. The agreement was extended until the end of 2021. Before the 2013 crisis, CoLA was calculated every six months.

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