articles | 05 December 2016

Cyprus debates 2017 budget

Parliament looks set to pass the government’s draft 2017 budget after two opposition parties pledged to join DISY in forming a 30 to 26 majority, it emerged on the first day of the budget debate.

DIKO chairman Nicolas Papadopoulos said that his party, which has nine deputies in the 56-seat parliament, would vote in favour of the budget, Cyprus’ first following the completion of its bailout in March.

DISY which has a total of 18 deputies will also be joined by Solidarity’s three lawmakers after their spokesman Michalis Giorgallas said they would do so.

Several other opposition parties said that they would follow AKEL in rejecting the bill.

“The first post-bailout budget comes to strengthen the course of our economy’s recovery,” said DISY chairman Averof Neophytou.

Neophytou said that the return to growth and debt reduction “makes a country sovereign”.

The budget provides for total expenditure slightly over €7bn and total revenue slightly below, and is projected to generate a fiscal deficit of around 0.6% of economic output. The Cypriot economy, the euro area’s second smallest, emerged last year from a prolonged recession and expanded 1.7%. This year, the economy is projected to grow at a rate near 3% which it is forecast to maintain next year.

Papadopoulos said that his party will vote in favour of the proposed budget and so help strengthen (macro) economic stability, adding that it will also table amendments that reflect the party’s position, which he did not specify.

“We consider it our duty to continue contributing to this stability despite President Nicos Anastasiades’ efforts that go into the opposite direction,” he said. “We will maintain this responsible position and despite our reservations, we will vote in favour of the 2017 budget with certain amendments.”

Papadopoulos, who informally leads the bloc of political forces which oppose President Anastasiades’ efforts to reunite the island via negotiations with the Turkish Cypriot leader Mustafa Akinci, did not disclose details about the amendments his party intends to oppose.

AKEL’s secretary general Andros Kyprianou who supports Anastasiades’ reunification efforts said that he was disappointed by the content of the budget and where it was heading as it effectively extended Cyprus’ bailout period indefinitely. The exit from the crisis is not signalled by an expanding economy but by improving standards of living, he added.

The leader of AKEL, which has 16 deputies, said that “the country’s standard of living has dropped to that extent that if we measured poverty by the economic standards of 2008, the poverty ratio would be more than double”.

The chairman of socialist EDEK Marinos Sizopoulos did not indicate whether his party with three MPs would vote for or reject the budget bill although he criticised it.

The chairman of the Citizens’ Alliance Yiorgos Lillikas and the Environmentalists George Perdikis, said that they would both reject the budget. The two parties have three and two lawmakers respectively.

Elam which counts two lawmakers said that it would reject the budget with the exception of the defence budget and criticised the government for allocating more funds to the University of Cyprus than the army.

Source: Cyprus Mail

Cooperation Partners
  • Logo for Cyprus Shipping Chamber
  • Logo for Invest Cyprus
  • Logo for Cyprus International Businesses Association
  • Logo for Ministry of Energy, Commerce, Industry and Tourism
  • Logo for Cyprus Investment Funds Association
  • Logo for Association of Cyprus Banks
  • Logo for Cyprus In Your Heart
  • Logo for CFA Cyprus
  • Logo for Cyprus Chamber of Commerce and Industry