By Alexander Apostolides on October 07, 2009

Two issues of concern: Cypriot unemployment and the new greek government

Just a quick note for topics of discussion today:
1) Cypriot unemployment is slowly creeping up to the European norm. Although the level of unemployment is still lower than the advanced countries of Europe. However the rate of growth of unemployment in alarmingly fast, even faster than most European countries that we would like to emulate. What concerns me is that the government is thinking of measures of how to stop it growing (which it can do very little about), but is not focusing in preventing this unemployment becoming structural and long terms (which it can do a lot to prevent. Any ideas / suggestions of what the plan should be?
2) I was surprised and disappointed at the choices of Mr. Papandreou, whose victory pleased me. Ignoring the usual rubbish about "αρώμα γυναίκας" (why not aftershave of men?) it is very worrying that Premier Papandreou chose the foreign ministry for himself. This is a brief that is very taxing on time - there are more meeting for foreign ministers in Brussels than there are for premiers - is he supposed to drop the day to day running of the country to represent Greece in a harmonisation negation on the size of the future European foreign mission?
Even more worrying for the negotiations of Cyprus - such an exhausting process needs people to be working on just that issue when the final phase arrives. We all remember that during the second Clerides administration, Mr. Clerides, as well as Mr. Papandreou as foreign minister, surrendered all other briefs to other people to concentrate on the negotiations. Yet as Premier of Greece, such a policy will be impossible. what are you thoughts on this issue?


  1. Great comment by Panagiotis Andreou - My reply will follow
    I have the feeling that unemployment in Cyprus is structural already...

    and if I was to think of one measure to get rid of it that would definitely include the downsizing of our touristic infrastructure. This infrastructure with hotels, restaurants und all the rest is a cancer for the economy cause encouraged by a bubble has grown sooooo monstrously that it cannot support itself and leads to exploitation of both customers and employees.

    Just consider redirecting funds towards public services like public transport, health care, child-caring facilities etc. Things which we are missing sooo much (at least in an adequate degree). These are sectors which can absorb the "over-educated" population of the island and even more they are structure-defining services with an almost inelastic demand. Think furthermore of environment-related facilities... water-clearing, recycling etc. I am aware that there are administrative difficulties for the latter (that is recycling) because this is no sector which can be self-sustained and the EU does not allow government funding for such enterprises. But instead of what we do now which is exporting our crap to other countries, why not set an industry which imports the crap of other in our neigbourhood and re-exports higher value-products?

    Think also of hi-tech or research facilities like the neglected Institute of biology and Genetics (or whatever its called). Research facilities which can promote innovation. And think of how productivity and innovation go hand-in-hand.

    Last but not least think of the social benefits of more state hospitals, kindergardens, busses, trams (I was even thinking of trains!). I cannot imagine that the costs to existing branches (like taxis, private clinics etc.) can be that high, cause think of all the new infrastructure that has to be created and more importantly the maintenance which this implies.
    Think also of how tourism can be promoted in such an environment where tourists are not exclusively depended on opportunistic travel agents and taxi-driver-money-sucking-monsters, where touristic accomodation planning creates all facilities around touristic areas to supply tourists with all they need, etc. I think you are aware that we are one of the fewest countries in Europe in which once you have arrived at the airport the cheapest option (in exagerated terms) is to take the first plane bach rather than try to reach a destination on the island that lies further than Foinikoudes!

    So these are my first premature thoughts on cypriot unemployment!

  2. I think Panagiotis is right on most part. The hotel industry is clearly too big for its boots and loaded with crappy hotels.
    Public services is hard because of eu constraints - they dislike and increase of the government sector (they have been advising us to reduce it) and they like budget deficits even less.
    The over educated i think is a serious problem - it can only be solved with Cyrpiot emigrating to other EU countries, or by the ministry of education finally realising that career planing is an integral part of what they should be giving to children in order to fill skills shortages and ease skill over surplus. I don't think this will stop however while government jobs and particularly teaching pays so well and is secure.
    R&D might help but not those who are unemployed - they need semi-skilled jobs now not high tech jobs in the future.
    A bigger state can only happen by state savings in other sectors due to Eu commitments. I am all for more public transport, health care and child care - you can actually fund this by not hiring government messengers and copying assistants and outsourcing it to private companies --> but then you will miss the best way to satisfy people with "meso".