articles | 02 October 2020

Cyprus: EU guidelines & the road to financial recovery

For the second time in 10 years, Cyprus is expected to make pivotal decisions and create a credible and EU-accepted road map to bring the Cyprus economy to the new era. An era which implements sustainable investments and the introduction of digital transformation.

Whilst the private sector in Cyprus managed to recover in former difficult economic times with government support, a new approach is needed this time. The Recovery and Resilience Facility (RRF) established by the European Council must be embraced by the Cypriot government as it offers a way out of the current financial crisis and offers hope for a more resilient economy.

The European Commission has provided guidelines to member states on how to submit their plans in order to be eligible for funding and grants.

Pillar 1 – Next Generation EU (included in the RRF document) includes loans and grants and there are three pillars which can be viewed on the Commission’s website here. The EU Commission’s website also encourages member states to include in their plans, investment and reforms in the following flagship areas:

Power up – The frontloading of future-proof clean technologies and acceleration of the development and use of renewables.

Renovate – The improvement of energy efficiency of public and private buildings.

Recharge and Refuel – The promotion of future-proof clean technologies to accelerate the use of sustainable, accessible and smart transport, charging and refuelling stations and extension of public transport.

Connect – The fast rollout of rapid broadband services to all regions and households, including fiber and 5G networks.

Modernise – The digitalisation of public administration and services, including judicial and healthcare systems.

Scale-up – The increase in European industrial data cloud capacities and the development of the most powerful, cutting edge, and sustainable processors.

Reskill and upskill – The adaptation of education systems to support digital skills and educational and vocational training for all ages.

Cyprus needs to identify which of those sectors will benefit the island and are in compliance with the three key indicators of: Healthcare, Green Economy and Digital Economy.

In relation to enhancing Green Economy, Cyprus could allow the private sector to undertake more solar energy, onsite and offsite. Solar is a good solution for Cyprus as the cost of energy from solar does not require subsidies and is part of the transformation to a green economy. The public sector could set a good example by transforming all public buildings into energy efficient (powered only by solar PV energy), given that the summers are now longer and warmer.

Due to Covid-19, Digital Transformation is taking place all over the world and it has proved that countries that have implemented digital processes prior to the crisis, became more competitive and flexible. The EU Commission gives emphasis on the need focus on enhancing work that can be done via communication technology as well as to automate more processes for the public. Cyprus can revive its Cyprus Productivity Centre and collaborate with experts from abroad to support the retraining of employees.

The Healthcare System in Cyprus has ample of room to grow also. It is in need of new specialist medical centres and decent living facilities for the elderly. All over the world, healthcare is undergoing a technological revolution in terms of telemedicine and virtual medical contact. Therefore, Cyprus needs to apply new technology and provide care staff with the relevant training (reskill and upskill).

Cyprus needs to adopt and adjust to these important guidelines in order to be eligible for  EU’s much needed loans and grants which can help the island remodel and reform its economy.

 




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