European review of Cyprus economy ‘positive’

The conclusions of the latest European Commission and European Central Bank review of the Cyprus economy were the most positive ones since 2013, Finance Minister Harris Georgiades said on Saturday.

The European Commission and the European Central Bank on Friday concluded their third post-programme review of Cyprus’ performance and in a press release called on Cyprus to renew the reform effort, continue fiscal discipline and accelerate the reduction of the high stock of non-performing loans in a bid to sustain economic growth.

They also acknowledged that economic growth exceeded expectations, facilitating better than expected fiscal surpluses for the public sector.

Speaking to the Cyprus News Agency, Georgiades pointed out that these conclusions demonstrate the recovery of the economy, the improvement of the labour market and the maintenance of a prudent management of public finances.

At the same time, he said, they show the need to continue this policy, to promote reforms and intensify efforts to address the issue of non-performing loans and maintain budgetary discipline.

He added that all recommendations are noted and adopted by the government.

The minister was also asked to comment on the Troika’s reference that “Cyprus should use fiscal surpluses to accelerate the reduction in the still-elevated public debt and to increase public investment in productivity-enhancing projects to improve long-term growth potential”. He said that he fully agrees with this statement and this is in line with the Finance Ministry’s policy.

“We reduced the public debt and we expected that by the end of the year it could be marginally below 100%,” he replied, adding that “at the same time we are promoting very important public investments and new policies that enlarge the country’s productive capacity”.

Asked to comment on the visit of the President of the European Investment Bank, who will be in Cyprus for an official visit on October 2 to sign a new guarantee agreement up to €26 million for the expansion of the Cyprus Institute of Neurology and Genetics (CING), Georgiades said this is “another important step towards encouraging research and development”.

“We will take another important step towards encouraging research and development by facilitating one more significant investment in research infrastructure in a way which allows for the expansion of the productive base of the economy and the exploitation of scientific potential,” the minister said.

In the case of the Institute of Neurology and Genetics, he added, this concerns the provision of high-quality health services to fellow citizens.