FinMin: No hiring in Co-op sector without Ministry authorization

FinMin: No hiring in Co-op sector without Ministry authorization

Finance Minister Harris Georgiades has told the state-owned Cooperative Credit Institutions not to hire any more personnel without the authorization of the Finance Ministry`s Coop Management Unit, as the sector has failed to reduce the number of its employees in line with its restructuring plan.

The Coop sector was nationalised in 2013 as part of Cyprus’ €10 billion bailout. The government injected €1.5 billion to recapitalise the sector acquiring 99.4% of the sector`s share capital, provided a restructuring plan is implemented, as stipulated by EU state-aid rules.

However, the Coop sector failed to meet the target of reducing the number of its employees to 2,580 by the end of 2014 from 2,719.

Reliable sources have told CNA that the EU Directorate General on Competition which monitors state-aid extended the time-frame for the reduction in the number of employees to end-2017.

In a letter to the Cooperative Central Bank (CCB), Harris Georgiades notes that the Coop sector should not proceed with the hiring of new personnel without the Unit`s authorization and requests the introduction of a new Voluntary Retirement Scheme (VRS) by the end of the year.

Georgiades also points out that the CCB should manage its current personnel more efficiently by centralising various units in the Coop sector, such as creating a centralised Internal Audit Committee rather than maintaining individual internal audit units in each of the 18 Cooperative Credit Institutions.

According to the second annual Management Unit report, the Coop sector intends to hire 120 persons this year, mainly qualified personnel, which would lead to significant breach of targets.

As part of the Coop sector restructuring plan, the 193 cooperative credit institutions that operated throughout Cyprus were merged into 18 institutions operating under the CCB. Furthermore, the Coop sector will reduce its branches from 292 to 258 by June 2015.