articles | 18 November 2016

Cyprus will explain 2017 financial targets to Europe

Finance Minister Harris Georgiades said that the government’s view on its financial targets for 2017 differs from that of the EC and would be explained to the Council of Finance Ministers in December 2016.

Recently, the European Commission announced that Cyprus, among six member states, risks missing budgetary targets set for 2017. Commission Vice President Valdis Dombrovskis clarified on the same day that the methodology used by the European Commission to assess the Cyprus’ draft budgetary plan is the only one that is commonly agreed and accepted by all member states.

However Georgiades, speaking on Thursday to the press on the sidelines of the Russia-Cyprus Business Forum held in Limassol, noted that “we are recording the European Commission’s position very carefully” and added that “the Commission does not disagree as far as the actual estimates and actual performance is concerned”.

“In fact we project a marginal deficit of 0.6% for 2017, while the European Commission has a more positive estimate, that our deficit will be only 0.4%, therefore a very good performance, both compared to our bad past of high deficits and compared to the other EU member states”, he said, according to a Cyprus News Agency (CNA) report.

This, Georgiades continued, corresponds to a very high primary surplus, and stressed that “the disagreement is on the recommendation for additional measures on the basis of a very questionable technical methodology that is not based on real estimates but on potential ones”.

Our view is different, the Minister said, and stressed that the current stable financial framework with the balanced budget must be maintained, underlining that Cyprus must not return to the economic policies of the recent past but neither go to the other extreme, imposing taxes while the economy is registering a strong recovery.

“This is not needed and will not happen and this is the position that I will explain and present to the Council of the Ministers of Finance, next month”, he said.

Georgiades assured that the state budget will be implemented as it is. “It is absolutely within acceptable limits, we effectively ensure a balanced budget with a very good primary surplus”.

Earlier, addressing the Forum, Georgiades noted that a Cyprus solution will deliver huge economic benefits for Greek Cypriots and Turkish Cypriots and for the region.

“It goes without saying, however, that good preparation, economic adjustment, credible arrangements regarding the banking sector and the public finances, and full adoption of the EU acquis are necessary prerequisites which will ensure that the extremely positive prospects are confirmed and are not jeopardised”, he stressed.

The Minister also said that the government expects to sign the deal for a multi-million integrated casino resort within the next few weeks and that Cyprus Airways is expected to be seen flying again by early 2017, not as the loss-making state-carrier it was, but as a subsidiary of a major Russian private airliner.

Source: InCyprus

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