Nat­gas fund to look at ‘safe’ in­vest­ments abroad

Financial Mirror (Cyprus) - - FRONT PAGE -

Fu­ture in­come from hy­dro­car­bon ex­ploita­tion with Cyprus’ Exclusive Eco­nomic Zone (EEZ) will be in­vested to re­duce pub­lic debt and for “safe” in­vest­ments abroad ac­cord­ing to a bill for the es­tab­lish­ment of Na­tional In­vest­ment Fund ap­proved by the Coun­cil of Min­is­ters.

As Finance Min­is­ter Har­ris Ge­orghi­ades said af­ter Monday’s Coun­cil of Min­is­ters meet­ing, at the Pres­i­den­tial Palace, the bill sets the frame­work for man­ag­ing fu­ture in­come from natural gas, ac­cord­ing to the Cyprus News Agency.

Ge­orghi­ades noted that by es­tab­lish­ing the Fund, there will be trans­par­ent pro­ce­dures, many lev­els of checks and spe­cific rules re­gard­ing man­age­ment of this in­come and ex­plained that the main char­ac­ter­is­tic of this frame­work is that in­come will be man­aged for the ben­e­fit of fu­ture gen­er­a­tions by re­duc­ing pub­lic debt and by cre­at­ing an in­vest­ment fund that will make “very safe” in­vest­ments.

The bill pro­vides that if pub­lic debt is more than 80% of GDP then 50% of the an­nual in­come from hy­dro­car­bons will be used to re­duce pub­lic debt. If on the other hand pub­lic debt is be­tween 60-80% then 25% of the an­nual in­come will be used to re­duce pub­lic debt.

Ge­or­giades un­der­lined that ac­ti­va­tion of the whole con­cept will not oc­cur im­me­di­ately as there still some years to go be­fore an in­come from hy­dro­car­bon ex­ploita­tion starts flow­ing in, but noted at the same time that the fact that Cyprus moves for­ward to put in place a cred­i­ble and trans­par­ent frame­work con­trib­utes to re­store trust in the coun­try.

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