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Cyprus

Cyprus parliament vote throws EU, IMF bailout into doubt

Lawmakers in Cyprus have turned down a bill which would prepare for the privatization of three major public utility corporations. The vote puts payment of the next tranche of EU and IMF bailout funds in doubt.

Hundreds of workers at corporations facing privatization staged an angry protest outside parliament ahead of the vote on Thursday. In the event, 25 lawmakers turned down the motion, 25 approved it and there were five abstentions.

Five members of the center-right Democratic Party abstained because the party's proposed amendments safeguarding jobs and benefits at privatized companies were rejected. The party had earlier announced its decision to quit the government in disagreement over its handling of reunification talks with the island's estranged Turkish Cypriot community.

Cyprus government spokesman Christos Stylianides said late Thursday that the Cabinet would meet Friday to discuss the situation and "to forestall unpleasant developments and to maintain the country's economic recovery and stabilization."

"Privatization is a necessity," Averof Neophytou, leader the ruling right-wing Democratic Rally Party, told state broadcaster CyBC. "I hope that wisdom will prevail in the next few days."

Approval of the plan was mandatory under the terms of the 10-billion-euro ($13.7 billion) bailout from the European Union (EU) and International Monetary Fund (IMF) that Cyprus agreed in March 2013. Without approval of the legislation, Cyprus cannot get a fourth tranche of about 236 million euros in aid next month.

Cyprus was expected to privatise three major public utility corporations - Cyprus Telecoms CyTA, the Electricity Authority and the Cyprus Ports Authority - to raise some 1.4 billion euros by 2018.

Parties including left-wing AKEL and socialist EDEK had voiced strong opposition to the plan. AKEL leader Andros Kyprianou told parliament before the vote that his party would not consent to the "sell off of the nation's wealth." He condemned what he called the "blackmail" of international lenders.

Kyprianou and EDEK lawmaker Giorgos Varnava said the government should renegotiate the bill and look for alternatives.

jm/ccp (Reuters, AP)

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