articles | 30 June 2015

Cyprus “sufficiently protected” against Greece

Cyprus is “sufficiently protected” from developments in Greece, Finance Minister Harris Georgiades said recently, just hours before a bank holiday was imposed on banks in Greece.

His statement came following the breakdown of talks between eurozone lenders and the debt-stricken country, stoking fears that a ‘Grexit’ was imminent.

“The Cypriot economy, regardless of Greek developments, is following its own stabilisation and recovery process and is therefore sufficiently protected from any development,” he said.

Referring to the Eurogroup statement on Saturday that said, “The euro area authorities stand ready to do whatever is necessary to ensure financial stability of the euro area”, he said, “I do not worry for Cyprus, provided of course that we continue our own efforts, with seriousness and credibility, and that we will never allow ourselves to lose logic to populism, slogans and extreme options.”

Georgiades also defended Cyprus’ position at the Eurogroup meeting yesterday, saying that Cyprus was the only eurozone member state that supported debt relief for Greece as demanded by the Greek government.

However, he also argued against tax hikes (which had formed a large part of the most recent Greek government proposal), saying “I believe that tax hikes constitute the worst form of austerity, burdening not the state but citizens and companies. This is a counter-growth measure and exacerbates recession.”

Noting that Greece has endless productive capacity that remains unexploited due to serious structural problems and distortions, Georgiades added that during yesterday’s Eurogroup meeting he supported the view that any Greek programme should be oriented towards consolidation and reform, which would correct these distortions, and not towards tax hikes.

The Finance Minister said that Cyprus supported the extension of the Greek programme. “It would be disastrous for a country to be while outside markets and outside the programme. This would lead to even more intense austerity,” he said.

“It must be pointed out, however, that yesterday’s Eurogroup did not even consider the possible extension of the programme”.

He added that this was the aim of months of negotiations which preceded “and which unfortunately had no positive outcome”.

Source: InCyprus

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