Cyprus Privatization Backed in 2nd Vote

NICOSIA — At the second time of asking, lawmakers in Cyprus approved a bill to privatize a host of state-owned companies, a move that will enable the country to receive its next batch of rescue money.

The 30-26 vote in favor March 4 overturns last week’s rejection of the legislation and was due to a small right of center party backing the bill following government concessions on job security. The parties of the left continued to balk at the policy, which they see as a sell-out.

The vote came a day before a March 5 deadline set by creditors to pass the bill. The government had warned that failing to approve the legislation would put the country at risk of bankruptcy in the next couple of months.

Cyprus must raise 1.4 billion euros ($1.93 billion) from privatizations as a condition of last year’s 10 billion-euro ($13.8 billion) rescue deal with other Eurozone countries and the International Monetary Fund. The rescue money is distributed after certain targets are met.

Finance Minister Harris Georgiades applauded the vote which he said ensures that the country can stay afloat and on the path toward stability.

“Apart from being an obligation, the privatization program is also an opportunity to attract investment, bolster efficiency and competitiveness and shed the weight of state control on significant sectors of the economy,” Georgiades said.

The vote in favor came after the government made revisions to the legislation that it says addressed job security concerns and which will give lawmakers a say on how the privatization program proceeds.

Those were demands that the center-right Democratic Party, or DIKO, insisted be incorporated to ensure its support. “We are satisfied with the amendments and this allows us to approve the legislation,” DIKO leader Nicholas Papadopoulos said.

Cyprus’ state-owned telecommunications, electricity and ports authorities, among others, are earmarked for privatization once the country emerges from its deep recession, which creditors project will happen in 2015.

The legislation stoked protests from some 5,000 workers fearing for their jobs and cradle-to-grave benefits. Several hundred demonstrators gathered Socialist party EDEK lawmaker Nicos Nicolaides said the bill will lead to the “unruly” sell-off of state-owned companies.