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Cypriot gov't approves legislation completing 3-year bailout adjustment program

Xinhua, December 15, 2015 Adjust font size:

Cyprus's government approved framework legislation for the privatization of public telecommunications, thus completing all preconditions of a three-year bailout economic adjustment program, Finance Minister Harris Georgiades said on Monday.

The legislation has been made a prior requirement by international lenders for the release of the last bailout tranche before Cyprus gets out of its adjustment program at the end of March 2016.

A Eurogroup meeting will decide next week on the release of the tranche, which is part of a 10-billion-euro (11 billion U.S. dollar) bailout by the Eurogroup and the International Monetary Fund.

The bill provides for the setting up of a company under private law to take up the operations of the Cyprus Telecommunications Authority (CYTA) when it comes up for selling to private business in 2018.

The government will be the sole shareholder of the company but will have the right to sell an unspecified share to private investors.

"The state will keep a considerable part of the company's shares even after a strategic investor will take up the organization," Georgiades said.

He added that under the legislation, the government would retain the right to make decisions on issues involving national security.

Georgiades said regulations approved along with the bill fully safeguarded the employment rights of CYTA employees who would have the right to either continue to work under new management or ask to be seconded to the public service.

But employees are opposed to the privatization of CYTA and insist on it remaining a government-run institution, saying it generates a considerable annual revenue for the state.

Several hundred employees demonstrated outside the Presidential Palace as the Council of Ministers was debating the legislation.

In a petition handed to a Presidential Palace official, the demonstrators warned they would take union action if plans for privatization went ahead.

The legislation is scheduled to go before parliament later this week, where it is expected to face strong opposition by parties which have come out against privatization of state-owned business. Endit