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Our View: Social dialogue not the panacea touted by unions and government.

SOCIAL DIALOGUE was not respected, complained union bosses, after the decision of the right-wing parties, on Friday, to increase the monthly contribution of public employees to the pension fund from 2.5 per cent to three. Their real concern was not the 0.5-per cent increase, but the contempt some parties showed for the agreement reached between the government and the union through social dialogue.

The government mouthpiece Haravghi also took up the issue yesterday, saying the following in its leader article: "Now that a new marathon of consultations for the second package of economic measures begins, everyone should understand that social dialogue must be respected. This government never took measures affecting the workers without dialogue."

Without meaning to, Haravghi has highlighted the main reason our economy is in dire straits -- the need for social dialogue. This social dialogue has been dragging on inconclusively for months and only when it appeared that we would be entering the European support mechanism did the unions agree to make some small concessions. But these were conditional on the government hiking taxes. In other words, social dialogue gave the power to three union bosses to decide government fiscal policy.

The truth is that social dialogue is not the panacea the government, AKEL and unions would have us believe. On the contrary, it is always heavily weighted in favour of the side negotiating from a position of strength, in this case the unions. In order to agree to a 2.5-per cent contribution to the pension fund and small, temporary cuts to wages, they have imposed higher VAT, a fixed annual levy on all companies, a higher defence levy on dividends and a higher property tax. We dread to think what union bosses would demand in order to agree to the second package of measures.

Perhaps the champions of social dialogue should look at the Cyprus talks, or dialogue, to understand that it could never arrive at a mutually-acceptable conclusion when one side is in a much stronger position. The folly of the 'Cypriot-owned' dialogue has been perfectly illustrated, with President Christofias continuously accusing the Turkish side of not making the necessary concessions. And if it makes a small concession it will always demand something in exchange, because, like union bosses, it is not willing to give up its conquests for nothing.

Mediation or arbitration, both of which had been ruled out by Christofias, could have helped the Greek Cypriot side in the Cyprus talks. In the case of the much-touted, social dialogue, however, neither mediation nor arbitration is an option, which means the stronger side - the unions - will always get its way to the detriment of the public interest.

Copyright Cyprus Mail 2011

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Publication:Cyprus Mail (Cyprus)
Date:Aug 30, 2011
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