In a statement to parliament on Friday, Finance Minister Harris Georgiades said 2016 has been a pivotal year for the course of the economy.
Presenting the state budget for 2017, he also noted that the most important development was not the exit from the memorandum on economic reforms, but the fact that Cyprus has left its bailout programme economically enhanced with a new perspective.
Georgiades noted that Cyprus exited the memorandum with one of the highest growth rates in Europe, and the projections for growth both in 2016 and 2017 is close to 3 per cent of GDP.
He added that the goal of leaving the memorandum was achieved in the best possible way with the trust, reliability, and creditworthiness of the country being regained.
The Finance Minister said, however, that the positive outlook cannot lead to inaction and complacency in any way.
The aim of the government, he added, is not only the consolidation of growth, but also the distribution of a share of the growth to an increasing portion of the population, which as he said cannot be achieved as long as unemployment remains high.
Georgiades said that the creation of new jobs and new opportunities for all citizens is the ultimate objective.
The Finance Minister added that inequalities can be reduced and better prospects can be created for the public only through growth.
He noted that there is a need for continuing reforms, prudent management of public finances, and promoting measures to encourage entrepreneurship and new investments.
At the same time, he once again urged the parliament to approve the legal framework for the reform of the public service.
In relation to the public debt, Georgiades said that its viability analysis is positive under all scenarios.
The Finance Minister said that there cannot be any loosening of the fiscal system, and that additional measures are necessary.
“From 2014 onwards Cyprus has achieved every time one of the best financial performances in the EU and it consistently exceeds all the fiscal targets. Even the results for the ten months of 2016 announced today, show an improvement of 0.3 per cent compared to last year,” he said.
The Minister also said that the government has proven that it is willing to promote changes and reforms that has been postponed for years and address distortions that had been left to grow.
CO-OP BANKS SHOULD BE RETURNED TO PUBLIC
The Minister also said that the cooperative banking sector should be returned to the public as soon as possible.
The priority of government he said, is not to receive back the amount of state aid of 1.7 billion euros, given on behalf of citizens to the cooperative banking sector, but to ensure that the cooperative banking sector has a future and perspective, away from state interventions.
He added that the Finance Ministry will proceed in the forthcoming period and discuss options to return co-op banks to the public, including options for citizens who suffered damage from the haircut of bank deposits in 2013.
Georgiades expressed his concern over the transformation of the Cooperative banking sector into another semi- government organisation, explaining that this will not allow the bank work with flexibility.
Speaking generally of the Cyprus’ banking sector he expressed confidence that it is able to tackle the problem of non-performing loans on the condition that it will continue with a systematic effort for restructuring.
Georgiades also expressed his hope for strong economic growth and a reunited economy and country in a year from now.
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