€1 bln national recovery and resilience plan

Cyprus’ National Recovery and Resilience Plan, the blueprint to absorb over EUR 1 bln from the EU?s Next Generation fund, will be submitted to the Cabinet next week for approval.

Finance Minister Constantinos Petrides said the Parliament needs to approve structural reforms that come as a condition to the funds’ disbursement.

Petrides described the National Recovery and Resilience Plan as “the main weapon for the economic counteroffensive for the next five to six years, shaping the economy’s growth model.”

Asked on the conditions for the successful funds’ disbursements, Petrides said the EU has set out two provisions: the National Plan’s approval and compliance with the structural reforms included in the European Commission’s country-specific recommendations.

So far, comments made by the European Commission on Cyprus’ national plan “are more than positive concerning the ambitious and holistic plan that complies with the Commission’s requirements over a new growth model for the next generation.”

Petrides said the implementation of structural reforms that accompany the Fund as conditions “is up to us.” “Money and funds alone cannot create a new growth model.”

He said a new economic model is primarily created by structural reforms, so Brussels insisted it should be done as a package.

Required structural reforms include reforming Local Governments, the civil service, evaluation systems, and justice with the bills pending approval in the Parliament. “How can we speak of a new growth model in a country where contract enforcement takes years and years due to the lack of justice reform,” Petrides said.

“If we really care for the future of the country, these reforms, which have no particular political and ideological colour, should, at last, be approved by consensus,” he said.

Petrides said the government would table before the new Parliament following the May 30 elections a bill for the deferral of VAT payments for March, June and July 2021 to boost the liquidity of businesses that face challenges due to COVID lockdown and other restrictions.