NICOSIA - Despite the government meeting the Troika demands and on track for the next bailout disbursement, Nicosia will push ahead with more austerity, Finance Minister Haris Georgiades said yesterday.
Speaking after a meeting with the Economic Policy Committee, Georgiades said that despite the positive feedback from the Troika’s first evaluation on the implementation of the memorandum, the ministry will not rush to read too much into the assessment or consider these difficult days a thing of the past.
Instead, new measures, policies and decisions need to be imposed and although the government will not base the financial reform on more taxes, in some cases this will be unavoidable.
“Our goal is to remain within our limits and planning so that we don’t allow others to interfere again,” said the minister.
He also stressed that the government will not base its efforts to correct fiscal problems with more taxes, as this policy will not deliver the desired outcome.
“Efforts are focused on streamlining and cutting costs,” said Georgiades.
He said it was in an extremely difficult financial predicament and the government is not trying to sugar-coat the situation.
“However, we are clarifying that we are determined to implement a programme which however difficult will lay the foundations for a healthy and sustainable Cypriot economy,” Georgiades said.
“In this effort, we need the participation and contribution of everyone and even different views are useful in our attempt to form policy,” he added.
The committee’s last meeting was in 2011, while it was decided that it will henceforth meet every quarter to update on the development and implementation of the bailout programme.
The Cyprus Chamber of Commerce (Keve) said although the economy is on the right track to recovery despite the huge problems it is still facing, it is vital that the Troika’s requirements are met without further delay.
It pointed out that small businesses are negatively affected by the lack of liquidity, capital controls, the high cost of electricity and the inability to pay VAT and social insurance.
And as a result, unemployment continues to rise at an alarming rate.
“This is why it is necessary that there are no diversions or delays…This way the investment climate will improve and speed up our exit from the financial crisis,” said Keve.