Cyprus govt workers protest over pay freeze

December 13, 2011 - 4:30 AM

NICOSIA, Cyprus (AP) — Thousands of Cyprus government workers briefly walked off the job on Tuesday to protest against a proposed two-year salary freeze they say is being unfairly foisted on them.

Even limited strike action is rare in the eurozone member of 800,000 people with a bloated public sector that takes up around a third of all government spending.

But trade unions decided to stage the three-hour, island-wide work stoppage saying they were not adequately consulted during the talks between the government and opposition parties in hammering out the deal.

Airports and ports will operate normally, hospitals and other essential services will remain largely unaffected, but schools will close early.

Hundreds of protesters gathered outside Parliament in the capital Nicosia, holding aloft placards reading, "No more measures on the back of workers," and "Politicians, what have you given?" Some booed lawmakers entering the building.

Cyprus is trying to slash its fiscal deficit and restore investor confidence following a string of credit rating downgrades — mainly due to its banks' heavy exposure to debt-laden Greece — that have brought it a step above junk status.

The island, with a euro18 billion ($23.8 billion) economy, has been largely locked out of international markets for loans to pay its bills and refinance its debt because of the downgrades.

It's relying on a euro2.5 billion ($3.3 billion) loan from Russia at an interest rate much lower than what markets are offering to see it through until around middle of next year.

Austerity measures the government is trying to push through parliament include raising a sales tax from 15 to 17 percent, reducing social benefits by euro200 million and capping new public sector positions.

Lawmakers will hold separate votes on the budget and additional austerity measures this week.