articles | 09 July 2019

EU Finance Ministers call for Cyprus' reform

ΕU finance ministers (ECOFIN), convening in Brussels, in a recommendation package for Cyprus said it must reform the public sector, reduce toxic loans, focus on sustainable growth and improve efficiency of the justice system.

More specifically Cyprus is called on to take the following actions in 2019 and 2020 in order to:

  • Adopt key legislative reforms to improve efficiency in the public sector, in particular as regards the functioning of the public administration and the governance of State-owned entities and local governments. Address features of the tax system that may facilitate aggressive tax planning by individuals and multinationals, in particular by means of outbound payments by multinationals.
  • Facilitate the reduction of non-performing loans including by setting up an effective governance structure for the State-owned asset management company, taking steps to improve payment discipline and strengthening the supervision of credit-acquiring companies. Strengthen supervision capacities in the non-bank financial sector, including by fully integrating the insurance and pension-fund supervisors.
  •  Complete reforms aimed at increasing the effectiveness of the public employment services and reinforce outreach and activation support for young people. Deliver on the reform of the education and training system, including teacher evaluation, and increase employers’ engagement and learners’ participation in vocational education and training, and affordable childhood education and care. Take measures to ensure that the National Health System becomes operational in 2020, as planned while preserving its long-term sustainability.
  • Focus investment-related economic policy on sustainable transport, environment, in particular, waste and water management, energy efficiency and renewable energy, digitalisation, including digital skills, and research and innovation, considering territorial disparities within Cyprus. Adopt legislation to simplify the procedures for strategic investors to obtain necessary permits and licences. Improve access to finance for SMEs and resume the implementation of privatisation projects.
  • Step up efforts to improve the efficiency of the judicial system, including the functioning of administrative justice and revising civil procedures, increasing the specialisation of courts and setting up an operational e-justice system. Take measures to strengthen the legal enforcement of claims and ensure reliable and swift systems for the issuance and transfer of title deeds and immovable property rights. Accelerate anti-corruption reforms, safeguard the independence of the prosecution and strengthen the capacity of law enforcement.
According to the European Council, the overall objective of the recommendations is to encourage member states to increase their growth potential by modernising their economies and further strengthen their resilience.

"Despite global uncertainties and less favourable conditions, all member states’ economies are projected to grow in 2020 and the level of unemployment is at a record low.  In this context, the country-specific recommendations focus on implementing effective structural reforms, boosting investment strategies and encouraging responsible fiscal policies,” the ECOFIN stated.

The European Semester involves simultaneous monitoring of the member states` economic, employment and fiscal policies during a six-month period every year.

The European Council held a discussion on the country-specific recommendations on 20 June. The employment policy parts were approved by the Employment, Social Policy, Health and Consumer Affairs Council on 8 July, 2019.

Source: Financial Mirror


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