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Will workers in south Cyprus be coming north for better wages?

trainCurrently the north Cyprus government is trying to radically overhaul the civil service. The two issues which concern them most are high salaries and low productivity. Rumours have been spreading that the reason for this is not to streamline the economy or to make cuts because of Turkey’s reluctance to pay for mismanagement, but instead is to prepare north Cyprus for becoming part of Turkey. These rumours go on to say that if this is not done there would be a major disparity between Turkish civil service salaries and north Cyprus salaries.

It looks as if south Cyprus might be taking seriously the possibility that the current talks might be successful because they have recently been considering the implications these high salaries might have on the Cypriot economy if divided Cyprus becomes the United Cyprus Republic (UCR). While on the subject of the naming of countries, isn’t it strange how countries with the word “democratic” in their title usually seem to be quite the opposite. I wonder if this might also apply the countries with “united” in their title?

Anyway, from the time that the UCR came into being, the civil servants in the north could have far better salaries than in the south. The complaint from the south is that Cyprus as a whole would have to bear the burden of these excessive payments and that civil service unions in the south would seek parity with their brothers in the north.  Now this all depends on the agreement the north and south come to as part of the settlement. It is doubtful that this would result in a strong central government collecting taxes from all Cypriots and using them to pay civil servants throughout the country. That would certainly cause problems. It is more likely, however, that local taxes would pay for local services, including the civil service wages.

As part of a settlement there must come the removal of Turkey’s need to fund the north and so funding there will come mainly from taxes. The first problem north Cyprus would face would be that, compared to the south, because of the civil service wage difference, taxes would buy far less services. The second problem would be that with free movement of labour as an obvious EU demand, perhaps not at first but certainly later, GCs will want the better paid civil service jobs in the north. To discriminate against them could lead to an explosive situation. Now, this problem could be partly avoided by the not unjustified demand for civil servants in the north to speak Turkish but this still leaves a potentially powder keg situation.

So, civil servants in the north, it looks as if, one way or the other, the gravy train is about to leave the station.

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