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Cyprus Internet Directory [ Our View: A case of shameless profiteering by the state ]

Our View: A case of shameless profiteering by the state

IN AN EXCELLENT article published in Tuesday’s Politis, Disy deputy Dr Kyriacos Hadjiyiannis took to task all those who promote the convenient myth that rising prices were caused by profiteering by greedy businessmen. This myth has become official dogma, repeated ad nauseam by government ministers, union bosses and populist politicians, who have managed to make “the huge problem of high prices synonymous with profiteering.”

Dr Hadjiyiannis made the following astute observation: “With regard to profiteering, the government is attempting to profit politically by promoting the policy of ceiling prices for necessities such s milk and bread, while ignoring the real consequences for the economy and the consumer. But are electricity, water and telephones not basic necessities also? Yet the state targets only the private sector in order not to take any responsibility for monopolies it preserves for ideological and party expediency.”

Cyprus had the second most expensive electricity in the Europe, yet the government never saw this as a problem. The deputy correctly pointed out that the electricity market was an ‘absolute monopoly’ and consumers were paying extortionate prices for electricity as a result. The state was profiteering at the expense of consumers through the prices it was charging for electricity and water and contributing as much, if not more than the private sector to the high cost of living.

On the same day this article was published, the House watchdog committee heard how at the Electricity Authority of Cyprus (EAC) each employee took, on average 13 days of sick leave in 2009, at a cost to the Authority of €5 million. The Authority was also offering university scholarships to the offspring of employees, some of whom were earning as much as €120,000 per year; should we mention the annual bonuses given to all staff, their extravagant retirement bonuses and princely pensions?

The unions have earned the staff the right to plunder EAC’s funds, with the acquiescence of the politicians, and then we wonder why we are paying for the second highest expensive electricity in Europe. Worse still, EAC’s board has been complaining that it does not have the funds to invest in new projects or the profitability to secure financing. But profiteering, which exclusively benefits EAC’s privileged workers is acceptable to the government, even if it is one of the main causes of the high cost of living.

Higher water rates are justifiable, to an extent, given the high cost of desalination, but when it comes to the high electricity rates, it is very much a case of shameless state profiteering. Why does the state not consider placing a ceiling on electricity rates which are contributing to pushing up the cost of living much more than milk and bread prices?

 

 



(Source: Cyprus Mail)
Copyright © Cyprus Mail 2008 Please contact Cyprus Mail for the copyright terms of this article.



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