Ge­or­giades presents re­form-driven 2019 bud­get

Financial Mirror (Cyprus) - - CYPRUS -

Fi­nance Min­is­ter Har­ris Ge­or­giades urged the par­lia­men­tary par­ties to sup­port the gov­ern­ment’s re­form pro­gramme as ex­pressed through the 2019 bud­get plan.

Ge­or­giades was ad­dress­ing MPs dur­ing Fri­day’s pre­sen­ta­tion of the gov­ern­ment’s bud­get plan for 2019.

The Fi­nance Min­is­ter out­lined key pol­icy di­rec­tions and stressed that re­forms and changes in state struc­tures and pro­cesses should be a na­tional goal.

These in­clude re­forms in the jus­tice sys­tem, the im­ple­men­ta­tion of the NHS, pub­lic ser­vice re­forms, ed­u­ca­tional re­forms, the im­ple­men­ta­tion of the tourism strat­egy through the cre­ation of the com­pe­tent deputy min­istry, the sim­pli­fi­ca­tion of the project li­cens­ing process on the ba­sis of a new in­vest­ment law, im­prov­ing gov­er­nance in the field of re­search and in­no­va­tion, which in­cludes an on­go­ing ini­tia­tive in blockchain tech­nol­ogy.

He also re­ferred to the gov­ern­ment’s goal to sup­port the growth of pri­vate uni­ver­si­ties, the im­ple­men­ta­tion of the state’s en­ergy pol­icy, the es­tab­lish­ment of a new in­de­pen­dent su­per­vi­sory au­thor­ity for the in­sur­ance sec­tor and the prov­i­dent funds sec­tor and the re­form of the Cen­tral Bank.

Ge­or­giades also re­ferred to pri­vati­sa­tion plans, which in­clude the par­tial pri­vati­sa­tion of Cyta, the Cyprus Stock Ex­change and the state lottery.

He reaf­firmed the gov­ern­ment’s com­mit­ment to ad­her­ing to the fis­cal pol­icy it has been fol­low­ing through­out the years in the frame­work of EU guide­lines.

Re­fer­ring to the Cypriot econ­omy as it stands, he said that 2018 is the fourth year of eco­nomic re­cov­ery with an av­er­age growth rate of 4% since 2015.

“We must not for­get the long pe­riod of re­ces­sion that pre­ceded, when the GDP had shrunk by 11% and the in­equal­ity gaps had broad­ened, and un­em­ploy­ment was on the rise”.

The min­is­ter said the un­em­ploy­ment rate has dropped to 7% and equal­ity in­dices are im­prov­ing.

Ge­or­giades added that the en­cour­ag­ing in­ter­est ex­hib­ited by in­vestors led the gov­ern­ment to “es­ti­mate that the pos­i­tive growth rates are to con­tinue in a medium to long term hori­zon”.

On the im­pact of NPLs, Ge­or­giades said that laws passed in July, offered sta­bil­ity to the coun­try and con­vinced the In­ter­na­tional rat­ing agen­cies to up­grade the coun­try’s cred­it­wor­thi­ness.

With re­gards to the bank­ing sec­tor, the Fi­nance Min­is­ter noted that the adop­tion of the new leg­isla­tive frame­work has al­lowed the sec­tor to progress.

He said that the cre­ation of the new NPL man­age­ment body and the pack­ag­ing and sale of non-per­form­ing loans has helped the banks to re­duce their NPE from EUR 28 bln to EUR 11 bln.

Re­fer­ring to ES­TIA scheme for mort­gage de­fault­ers, he said that it is a tool which will help the bank­ing sys­tem to re­duce its bad loans even fur­ther.

The bud­get in­cludes a “ra­tio­nal in­crease” in spend­ing by EUR 250 mln, with to­tal ex­pen­di­ture reach­ing EUR 7.9 bln, while rev­enues are es­ti­mated at EUR 8.55 bln.

Ge­or­giades said there is room for sup­port mea­sures for those in need, as well as the pro­mo­tion of tax in­cen­tives and cuts, while stress­ing that mar­gins are not un­lim­ited.

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