Cyprus hit by strikes over austerity package

(NICOSIA) - Thousands of civil servants in Cyprus staged an impromptu strike on Wednesday in protest at a two-year salary freeze among other government austerity measures to avoid an EU bailout.

Hundreds of civil servants rallied outside parliament to berate MPs who they accused of seeking to pass measures that would hurt their pay packet rather than tax wealth.

The action came ahead of a 12-hour stoppage on Thursday, when the powerful civil service union Pasydy plans to effectively shut down government while calling for members to boycott weekend municipal elections.

Thursday's strike, due to begin at 7:00 am (0500 GMT), is also expected to affect essential services at hospitals and ports.

Government spokesman Stefanos Stefanou called on the union to "think again," while expressing "sadness and disappointment" at the move.

Air traffic controllers unhappy with the austerity drive will also stage a 12-hour strike from 9:00 am on Thursday at Larnaca and Paphos airports.

Airport authorities said the stoppage would affect some 5,000 passengers and delay more than 70 flights.

All flights will be affected except for VIP, state, military, hospital, humanitarian, search and rescue, and emergency flights or those with technical problems.

Employers and business groups condemned the air traffic strike, saying it would harm the key tourism industry.

The wave of industrial action follows a three-hour stoppage in the wider public sector on Wednesday.

Trade unions called that strike to show their anger at not being involved in the "social dialogue" when the austerity measures were agreed.

Parliament on Wednesday approved the austerity package, the semi-government Cyprus News Agency reported.

The debt-laden country will see public sector salaries frozen for two years in a bid to reduce its bloated fiscal deficit and avert an EU bailout.

Other measures include a rise in value-added tax to 17 percent from 15 percent from March 1, and an emergency sliding-scale tariff imposed on the self-employed and private sector workers earning more than 2,500 euros ($3,245).

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 the VAT increase, next year's deficit would have jumped by an extra percentage point.

Cyprus needs tighter fiscal austerity to bring its bloated deficit below the EU's three percent ceiling for 2012.