Its economy brought to the edge of ruin by disastrous investments by state banks that forced the government to seek an international bailout with onerous conditions, Cyprus will start selling off its state enterprises in 2015 when it expects growth to start again.
Going on the block then will be a raft of state-owned companies as the government tries to get out from under a crisis that was abated only when the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) stepped in with a 10 billion euro ($13.67 billion) that required the confiscation of nearly half the assets in bank accounts of more than 100,000 euros ($137,000).
Government spokesman Christos Stylianides says first in line for privatization is the Cyprus Telecommunications Authority. He said that the government will retain some ownership stakes, workers’ rights will be safeguarded and that employees in companies up for sale may have the option to buy shares.
Cyprus’s financial rescue deal in March with other Eurozone countries and the IMF obliges the country to raise 1.4 billion euros ($1.9 billion) from privatizations and other means. The Cabinet on Dec. 5 okayed the privatization scheme, one of the conditions for the payout of additional bailout money.
So far there hasn’t been any reaction from workers at the state companies, unlike in Greece which is also receiving a Troika bailout that is forcing privatizations, leading workers at the enterprises to take to the streets in protest as many of them will be fired.