Cyprus Supreme Court upholds public sector pay cuts during 2013 crisis

Source: Xinhua| 2020-04-11 01:58:03|Editor: huaxia

NICOSIA, April 10 (Xinhua) -- In a landmark ruling, the Supreme Court of Cyprus decided on Friday that salary and pension cuts imposed by the government on civil servants during the 2013 economic crisis were legal.

The government reacted with a sigh of relief. Otherwise it would have had to pay over one billion euros (1.01 billion U.S. dollars), or about 4.5 percent of the country's gross domestic product (GDP), to restore lost income to hundreds of applicants, all public sector employees, who had challenged the move.

Finance Minister Constantinos Petrides, seemingly relieved, said that the state would not have been in a position to reimburse the applicants had the court decided otherwise. He cited the state of public finances as a reason.

The government's fiscal position has been stretched to limit by an assistance package offered to companies and workers who have become idle as a result of the complete coronavirus lockdown.

The applicants had twice won their case against the government already for the salary and pension cuts, which were introduced as part of the austerity measures imposed by the Eurogroup and the International Monetary Fund (IMF) for pulling the eastern Mediterranean island back from bankruptcy in a ten-billion-euro bailout.

A lower court and then an appeals court had accepted their argument that their salary was part of their property, which under the Constitution cannot be touched.

However, on Friday Attorney General Costas Clerides argued before the full panel of 13 Supreme Court judges that cuts to the salaries of the applicants had left untouched the core of their property.

In a majority decision, the Supreme Court ruled that the cuts had been imposed for the public good and accepted the argument that they did not have a negative effect on the dignified living standards of those who brought the case to court.

"This sets a precedent so that the state can, under similar circumstances, do the same," Clerides said.

"The main message sent out is that individual rights provided for by Article 23 (of the Constitution) are respected and ensured, but as long as the core of exercising this right is not affected, the state can impose cuts on salaries and pensions," he said.

Cyprus President Nicos Anastasiades congratulated the attorney general for the successful outcome of the state's case.

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