Cyprus public sector strikes over austerity

(NICOSIA) - Thousands of public sector workers in Cyprus staged a three-hour stoppage Tuesday in protest over government moves to freeze salaries for two years as part of an austerity drive to avoid an EU bailout.

The industrial action affected councils, government departments and schools, but essential services such as airports, hospitals and ports were not disrupted.

Trade unions called the strike to show their anger at not being consulted when austerity measures were agreed.

Debt-laden Cyprus plans to freeze public sector salaries for two years in a bid to reduce its bloated fiscal deficit and avert an EU bailout.

Public sector employees gathered outside parliament where a series of measures including the wage freeze and a rise in value-added tax to 17 percent from 15 percent are expected to be approved later in the day.

The European Union advised Cyprus to pass a tougher austerity budget by December 15 after the European Commission predicted a deficit of 4.9 percent of gross domestic product in 2012 from nearly seven percent this year.

Without a VAT increase, next year's deficit would jump by an extra percentage point.