Finance Minister Harris Georgiades said on Saturday the economy would seriously suffer if the supreme court issues a decision to restore civil service salaries immediately in the three cases that reversed pay cuts imposed in 2012.
“If the demand is to restore salaries now, we will have a problem,” the minister said, speaking on a news show on Politis radio 107.6. “There will be an impact reaching hundreds of millions.”
Georgiades said the government had a plan B but declined to discuss details in public pending the court case, adding that party leaders had been informed of what such a decision involved.
“It will be a disproportionately large fiscal impact,” he said.
The supreme court will consider state’s appeals against the administrative court’s decisions on civil service salaries on September 30.
In the March 29 decisions, the administrative court had ruled that a freeze on incremental pay rises, a 3 per cent contribution to pensions, and a reduction in civil servants’ pay were in violation of article 23 of the constitution regarding the protection of the right to property.
The judgement applied to civil servants as well as persons employed in the broader public sector, such as semi-governmental organisations.
As such, the pay reductions were deemed null and void and the applicants entitled to compensation, effective immediately.
Various estimates have been floated on how much the decisions might cost the state should the administrative court’s ruling be upheld and the affected civil servants compensated.
The decisions came at a time when the government had already started to gradually reinstate the austerity-driven cuts.
The minister said all the cuts would have been gradually reversed by 2023.
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