articles | 08 April 2016

Cyprus to avoid same financial mistakes

President Anastasiades has pledged that the government of Cyprus will continue to implement economic policies to avoid the errors of the past that led to the economic crisis.

At a press conference on economic issues, he referred to unemployment and the measures taken to address this problem, saying that according to Eurostat figures Cyprus unemployment in February dropped by 4%, to 12.6% from 16.6% in February 2015.

Comparing the data, he said that in the first three months of 2013 growth rate was -5.7% and -6.5% in the first halfof the year, while today, three years later, growth rate increased to 1.6%.

He also said that based on Eurogroup assessment in March 2013 the Cyprus economic adjustment program would reach €10 billion, while upon completion of the program (31st of March 2016) the Republic of Cyprus absorbed only €7.3 billion, of which €1.67 billion was allocated to the recapitalisation of the Cooperatives.

In his speech, he pointed out that despite the successful outcome of the work achieved in the past three years, there are still many challenges ahead, such as high unemployment, Non-Performing Loans, and other external factors.

Referring to the 'restoration of the credibility of the state', he said that one of the first decisions taken by the government when it assumed office, was strict budgetary discipline and limiting public expenditure.

As a result of fiscal consolidation the state managed - since 2014 - to function effectively with a balanced budget and adequate primary surplus of 2.5%, without enforcing any additional tax or reducing salaries, pensions or benefits, he pointed out.

The President also referred to government efforts to restore the credibility of the financial sector, including new legislation and the recapitalisation of the Cooperatives by the state. H also talked about the recapitalisation of the commercial banks through the attraction of foreign investments and capitals reaching €1.4 billion.

The stabilisation of the financial system was confirmed by the positive results of the banks during the European stress tests, he underlined.

Source: Famagusta Gazette

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