Trade unions unite efforts to tackle high cost of living

In June 2008, in a meeting of all trade unions on the subject of rising prices and profiteering, a number of trade union organisations, together with consumer organisations, resolved to propose to the government a range of measures which aim to address the problem of inflationary pressures. The organisations argue that the situation is affecting low-paid workers and vulnerable groups of the population in particular.

On 18 June 2008, a special all-trade union meeting was held to discuss rising prices and profiteering. Participating trade unions included: the Democratic Labour Federation of Cyprus (Δημοκρατική Εργατική Ομοσπονδία Κύπρου, DΕΟΚ), the Cyprus Union of Bank Employees (Ένωση Τραπεζικών Υπαλλήλων Κύπρου, ΕΤΥΚ), the Union of Cyprus Journalists (Ένωση Συντακτών Κύπρου, ESK), the Pancyprian Public Employees Trade Union (Παγκύπρια Συντεχνία Δημοσίων Υπαλλήλων, PASYDY), the Pancyprian Federation of Labour (Παγκύπρια Εργατική Ομοσπονδία, PΕΟ), the Pancyprian Federation of Independent Trade Unions (Παγκύπρια Ομοσπονδία Ανεξάρτητων Συντεχνιών, POAS), the Association of Teachers of Technical Education (Οργάνωση Λειτουργών Τεχνικής Εκπαίδευσης Κύπρου, OLTEK) and the Cyprus Workers’ Confederation (Συνομοσπονδία Εργαζομένων Κύπρου, SΕΚ). Apart from the trade union organisations, the Cyprus Consumers Association (CCA) and the Cyprus Union of Consumers and Quality of Life (Παγκύπρια Ένωση Καταναλωτών και Ποιότητας Ζωής) also took part in the meeting.

Effects of inflationary pressures on vulnerable groups

Although it is generally accepted that inflationary pressures stem mainly from increases in the prices of oil, cereals and other basic raw materials on international markets, all of the organisations involved in the meeting agree that such pressures have major effects on workers. Those most affected include low-paid and vulnerable groups of the population. In this context, in order to immediately and effectively address the rising prices and profiteering that have recently been affecting the markets, the participating organisations resolved to recommend to the government a range of measures. The organisations believe that the implementation of these measures will lead, if not to the elimination, at least to an amelioration of the problem.

Measures proposed to alleviate the problem

As far as the content of the proposed measures is concerned, they include measures regarding lower taxation, control and monitoring of markets, measures of a legislative nature, as well as social policy measures. Furthermore, the organisations also emphasise the need for information and education for consumers, for purposes of self-protection. Some specific measures include the following:

• requesting a derogation from the European Union, so as to avoid a 20% increase in the consumption tax on diesel fuel beginning on 1 July 2008;

• designing a study on the creation of an adequate public transport network, so that citizens are not dependent on the use of private cars;

• reducing the 28% tax paid by the Electricity Authority of Cyprus (ΑρχήΗλεκτρισμούΚύπρου, AHK) to the state and ceasing the use of AHK surpluses to cover the fiscal deficit, such that electricity can be offered at a lower price to consumers. Similarly, this measure should be implemented in other semi-governmental organisations such as the Cyprus Telecommunications Authority (ΑρχήΤηλεπικοινωνιώνΚύπρου, CYTA);

• further enhancing, providing with staff and expanding the role of the Competition and Consumer Protection Service, making market control more rigorous, permanent and effective;

• establishing the institution of Consumer Ombudsman;

• designing a specialised study on the possibility of making profiteering a criminal offence, based on the experience of other countries;

• exercising direct price control on consumer products, mainly in closed markets – such as airports, ports or football fields – and mark suggested sale prices on basic products.

Apart from the measures referred to above, the organisations that participated in the meeting point to two further requirements: namely, the necessity of promoting additional social policy measures which mainly target the weaker groups of the population, and also the necessity of maintaining and reinforcing the system of pay indexation. The latter has proved particularly useful for employees. The organisations have reiterated an ongoing older demand for a crackdown on tax evasion, as well as the collection of overdue taxes, estimated at about €630 million since 2006.

Next steps

In order to take forward the proposed measures, a delegation of the organisations that took part in the June meeting will hold a series of meetings over the coming period with representatives of the executive and legislative branches of power. In the event that the necessary measures are not considered capable of addressing the problem, there is a distinct possibility that more drastic steps will be taken.

Evangelia Soumeli, Cyprus Labour Institute (INEK/PEO)