13 Feb 2011

Row over austerity measures in North Cyprus

8:14 am on 13 February 2011

An unprecedented row has broken out between Turkey and Turkish Cypriots living on the island of Cyprus.

It was sparked by a demonstration in the North of the island against austerity measures announced by Ankara.

Deutsche Welle Radio reports the friction could have an impact on efforts to reunite Cyprus, which has been split since 1974.

Last month the Northern Cyprus administration imposed 40% salary cuts on the civil service and announced plans to sell telecom and electricity operators and privatise a university.

Deputy Prime Minister Cemil Cicek of Turkey said 84% of all government resources there are spent on public sector salaries, with not much left for other expenditures.

He said the Northern Cyprus government needed to spend more wisely or it could go into bankruptcy. The government is expected to show a deficit of 550 - 600 million lira ($US314-376 million).

Some 12,000 people work in Northern Cyprus's civil service, but it is estimated that double that number are on the public payroll. Northern Cyprus has a population of 264,000.

Turkey contributes around $US500 million a year to Northern Cyprus.