articles | 20 April 2013

New measures to kick-start Cyprus economy

In a packed room at the Presidential Palace, in front of ministers, MPs, party leaders, and leading businessmen, President Nicos Anastasiades announced measures to help kick-start the economy and officially announced the construction of a liquefied natural gas (LNG) plant.

The measures, drawn up by the cabinet during two days of meetings at the beginning of the week, were five-fold and are aimed at helping vulnerable groups, training unemployed individuals, creating new jobs, helping stimulate economic growth and encouraging environmental development, Anastasiades said in a televised address.

"Any attempt to gloss over the tough measures imposed upon us [by the troika] would be an indication of weakness in comprehending the real problems society now faces, and a lack of vision and decisiveness from the state in restarting the economy," he said. “The most important thing today is joint action and reaction to the dire measures we were forced to accept in an attempt to avoid the unthinkable. We will not shy away from the challenges ahead.”

Anastasiades said that after discussions, the government would be in a position to adopt a national energy policy which would be completed within the next two weeks. The only policy that he was willing to announce last night was the construction of the LNG plant, he said.

During his speech the President referred to the difficult position in which the government had been placed and the dilemmas it faced after the Eurogroup meetings on March 15 and 25. “I do not believe it would be in the country’s best interests to be confrontational. We would be better served through creational cooperation,” he said. He said the committee of inquiry which began yesterday would apportion blame where it was due.

He reassured people that the government would show courage in the face of the challenges ahead and would not shirk its responsibilities. After exhaustive dialogue with universities and the professional and business communities, Anastasiades believed a coherent programme that meets the needs of today and prospects for tomorrow was now complete. “I would like to stress that to succeed in restarting our economy and overcoming the crisis as soon as possible we must strictly observe any obligations we have undertaken through the bailout agreement with consistency,” he added.

Anastasiades went on to say there was no doubt there would be difficult trials ahead and asked for everyone’s understanding and patience. “If we do not discipline ourselves within a structured programme, far from populism and unrealistic proposals we will be faced with more painful consequences,” the President said.

“Knowing the patriotism, creativity and tenacity that distinguishes a nation which has been tested in worse conditions than the present ones and has proven it can get back on its feet and prosper, makes me optimistic that we will succeed,” he concluded.


Vulnerable groups

  • Through agreement, the length for repayment of loans can now be extended without further burdening those who may have difficulty repaying.
  • The government is looking into finding a way to reduce the interest rate on loans as well as the reduction in the price of electricity for the vulnerable and needy.
  • By the end of June, regulations will be in place to ease the restructuring of any debt by appointing a banking mediator to oversee any changes.
  • Residential and commercial property owners who are unable to pay their debts can become tenants of the property and will have first option in re-purchasing once they are in a financial position to do so.
  • There will be funding of up to 50 per cent of the cost of installing photovoltaic systems.
  • With the aim of aiding the private health sector and at improving the quality of service at state-run hospitals the government has decided to pay €6m to the private sector for certain services.


  • Parliament is expected to pass a bill which will see the hiring of 800 casual government workers, the reappointment of contracted teachers and the employment of 300 graduates from military academies.
  • The government will give €21m in funding towards the tourism industry to employ 6,000 people who are currently unemployed.
  • The state will subsidise the wages of unemployed citizens by 65 per cent in jobs where they can work from home or have flexible working hours, creating the opportunity to give work to 1,000 unemployed people.
  • The Church and the University of Cyprus will make arable land available which the government will then hand over to people based on professional, economic and social criteria. Rent will be low and the ministry of agriculture will train and provide services to help to support those who work on the land.
  • A programme will be set up to help train more than 1,000 degree-holders to find employment in both the private and public sectors with a monthly wage of €500 for all participants.
  • Companies will receive up to 25 per cent in tax exemptions for every person they hire within the next year.
  • The plan will see the immediate implementation of the pending Youth Entrepreneurship Plan creating 1,000 new jobs.


  • The amount of time required to issue planning permission will be reduced to a maximum of one month for small works and three months for large works.
  • An agreement has been made between Cyprus and the Sovereign Base Areas (SBA) which will allow the urban development of land within the limits of the SBA.
  • Building coefficients will change and have been increased by 30 per cent in residential areas for large commercial developments. The coefficient will be increased by 25 per cent on the outskirts of residential areas for large commercial or office developments. It will increase by 20 per cent in certain tourist zones for large-scale property and increased from 10 to 15 per cent for the areas available for golf courses.
  • The tourist season will be extended by two months.
  • Green light for casinos.
  • Guarantee mechanism to financially help small and middle-sized businesses by offering them favourable terms.
  • The government will give permits to joint tourist developments like condo hotels.
  • Foreign nationals will be encouraged to invest in Cyprus by being given long residency permits.
  • A state authority will be put in place to efficiently take advantage of government owned land.


  • The government has decided to reduce the cost of electricity by introducing photovoltaic systems for commercial and industrial consumers including public buildings.
  • Photovoltaic parks capable of producing 50 MW of power will be built to help reduce the cost of electricity, saving €51m a year in fuel. It will also help save €2m a year by reducing the emission of pollutants, give jobs to at least 650 people and help Cyprus meet its renewable energy requirements for 2020.

Social policies

  • The government’s allowance policy will radically change to meet the needs of asylum seekers and other foreigners in Cyprus as all allowances would be revised and considerably reduced.
  • Allowances for money and food would be replaced by a coupon system.
  • Positions at state universities
  • The University of Cyprus will increase the number of new entrants by 100 and will offer 200 positions to Cypriot students who are currently studying abroad.
  • Cyprus University of Technology, TEPAK will have 35 extra positions for new entrants and 30 spots for those studying abroad.

Source: Cyprus Mail

Cooperation Partners
  • Logo for Invest Cyprus
  • Logo for Love Cyprus Deputy Ministry of Tourism
  • Logo for Ministry of Energy, Commerce, Industry and Tourism
  • Logo for Cyprus Chamber of Commerce and Industry
  • Logo for CYFA Cyprus
  • Logo for Cyprus Investment Funds Association
  • Logo for Cyprus International Businesses Association
  • Logo for Cyprus Shipping Chamber
  • Logo for Association of Cyprus Banks