By Petros Petrides
NICOSIA, Dec. 5 (Xinhua) -- The Cypriot government approved a "road plan" on Thursday for privatizing state-owned enterprises despite strong reaction by trade unions representing employees and reservations by the junior coalition party.
Government spokesman Christos Stylianides said a decision reached at unanimously by the Council of Ministers is only the political decision for a long process which will start after two years and will take up to three more years to complete.
Privatization of the main state-owned enterprises -- Telecommunications, Electricity and Ports -- and closing down some others considered to be outdated was one of the conditions set down by international lenders who offered bailout to the eastern Mediterranean island.
Cyprus will receive 10 billion euros (13.7 billion U.S. dollars) by the end of 2016 from its Eurogroup partners and the International Monetary Fund at a high price: It had to accept tough austerity measures, including salary cuts and tax hikes and to undergo a world first recapitalization of its main bank with depositors' money.
Restrictions on bank transactions, including transfer of money abroad, are still in force.
Privatization of state owned businesses is probably the thorniest demand by Cyprus' international lenders as it is a socially sensitive issue. It is opposed by both left wing parliamentary parties and employees.
Several thousand people staged work stoppages this week to protest at the privatization plan -- the first reaction to the bailout memorandum signed in March but not as strong as reaction by workers in Greece.
The government of right-wing president Nicos Anastasiades, who took over an economic mess left behind by the previous government, had to tread a fine line as the junior coalition party the Democratic Party (DIKO) issued a clear warning that it would not go along with its government partners in parliament if the privatization plan went too far.
Stylianides said the plan does not provide for an all-out privatization of public enterprises and added that the government will also seek diverse ways to cover an estimated 1.4 billion euro deficit in its finances by 2016.
"A sell-out of state-owned property is out of the question," said Stylianides.
He also said that DIKO ministers voted for the privatization plan after setting out reservations touching upon the pension rights of employees, national security issues.
The coalition government commands a slender majority in parliament and any defections by individual lawmakers could derail the entire bailout program.
The government spokesman tried to pacify objections to the privatizations by saying that it will be a long and flexible process that would allow taking into consideration special conditions at each public enterprise and also involve their employees and safeguard their rights.
"The whole process will be a developing one and will last for three to four years allowing for corrections to be made on the way," he said
The Eurogroup and the IMF have made the privatization plan a precondition for reaching a decision later this month for the release of the next tranche of bailout money totaling 186 million euros. (1 euro = 1.37 U.S. dollars)
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