Cyprus lawmakers to vote again next week on revised, bailout-mandated privatization bill

NICOSIA, Cyprus – Lawmakers in Cyprus will vote again next week on a privatization bill that the country needs to secure the next batch of rescue money and avoid bankruptcy.

A bill failed this week amid concerns that workers’ rights would not be safeguarded, but revisions were approved Friday.

Prodromos Prodromou, the spokesman for the ruling Democratic Rally party, told The Associated Press that lawmakers will convene Tuesday — a day before the deadline set by creditors in order to release a 236 million-euro ($326 million) installment.

The privatization of state-owned companies is a critical element of a 10 billion-euro ($13.81 billion) rescue package for Cyprus, which agreed to the measures a year ago in a deal with other eurozone countries and the International Monetary Fund.

But opposition to the privatization plans has become strong, especially from left-wing parties that fear mass layoffs and the sell-off of national wealth.

“Privatizations are a clear obligation,” Finance Minister Harris Georgiades said. “We have to understand that that if we sink, then we’ll all go down together.”

Workers at the state electricity, telecommunications and ports authorities have staged strikes to protest.

Meanwhile, Cyprus’ largest bank said Friday that its business has started to show signs of stability after a year of turmoil.

Bank of Cyprus CEO John Hourican said deposit losses have slowed in recent months and bad loans levelled off.

Deposits shrank in the fourth quarter of 2013 by half a billion euros to nearly 15 billion euros, only a third of deposit outflows seen in the previous quarter. Although bad loans increased five percentage points to 53 per cent in the fourth quarter, the rise was much smaller than the 12-point rise in the third quarter.

The terms of the rescue took a huge toll on Cypriot banks after authorities seized large chunks of uninsured deposits, shut down the second largest lender and imposed capital controls.