articles | 22 March 2017

Eurogroup validates Finance Minister

The recent Eurogroup meeting essentially validated Finance Minister Harris Georgiades’ arguments that a set of European Commission proposals towards Nicosia for fiscal reforms are unnecessary and based on faulty methodology.

Speaking on state radio, Georgiades confirmed that the subject was discussed and the methodology behind the Commission’s recommendations was put into question, as several member-states expressed similar reservations to his own.

In addition, the Finance Minister said that his steadfast position that no significant fiscal reforms are necessary was accepted by the Eurogroup.

“It was obvious and it became characteristically clear that it is not possible for a member state which has had a balanced budget for years, and which presents the highest primary surplus in the EU, to be called on to take additional measures…” said Georgiades.

The Finance Minister rejected at the Eurogroup the position of the European Commission that the Cyprus economy has entered an overheating phase and that additional taxes are needed to counter this.

Contrarily, said Georgiades on the radio, having just exited a recession, significant growth is necessary to deal with the high unemployment.

“It is not a reliable policy recommendation for a state with high unemployment such as Cyprus to be called to cut back on its growth rate”, said Georgiades, adding that the change in methodology is to serve the target of reliable policy recommendations.

However, the Finance Minister stressed that regardless of the European Commission’s recommendations, there is no room for relaxation.

“The need to maintain this sound fiscal management and avoid the creation of deficits remains”, added Georgiades.

Source: InCyprus

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