CYPRIOT Nobel Laureate Professor Christophoros Pissarides has offered his economic expertise to the government, he said yesterday in his first public appearance since returning to the island.
Pissarides, who has taken up a position at the University of Cyprus, told a news conference that he approached Finance Minister Charilaos Stavrakis around ten days ago offering his help, which was accepted, he said.
But Pissarides stressed, he was “an economist and an academic and did not want to be involved in politics or political disputes.
“This award is for me is a purely academic and not a means of solving the problems of Cyprus or those of other countries,” said the professor who won his Nobel for a paper into unemployment and the labour market.
Asked about the Cyprus economy and the challenges it is currently facing, Pissarides predicted a ‘mild recovery.
“There are structural problems that need to be solved,” he said.
“In terms of Cyprus economy in the coming year I don’t know anything than what I read in the press and the statistics of the LSE that are published in the press, that is: a very mild recovery – still very close to zero – but not negative and I have no reason not to believe these figures.”
In terms of the challenges facing the Cyprus economy, the laureate said: “it is a fiscal issue and not just about how to find more money but how to structure the fiscal budget and address the taxation issue, to make it more able to deal with future problems.”
He added: “Cyprus is very unusual in its tax structure – it’s has extremely high tax on transactions. Those are completely unnecessary.”
Asked about Cyprus’ exposure to the Greek economy – a significant cause for concern among the ratings agencies, Pissarides said: “It is a problem to the extent that it is a close neighbour and a customer that is suffering and therefore not consuming (Cypriot) goods as it was before.”
He noted that Cypriot banks were also more cautious than Greek banks, and therefore faced lower risks from defaulted loans.
As for the reliability of ratings agencies such as Standard and Poor’s, Moody’s and Fitch, Pissarides said they are not necessarily reliable, but that many observers who want tangible assessments use them, and they needed to be taken seriously.
Speaking on how he felt about returning to the University of Cyprus, Pissarides said he thought the institution had matured and become an independent university that could can support itself.
He added however that it was slightly worrying that the university was under such close scrutiny by the Education Ministry, although he acknowledged that some control was necessary.
“From what we know about how to establish a university, one of the things we see is that the more independent a university is the more of a chance it has to succeed internationally,” Pissarides said.
Tonight, Pissarides will give his first Nobel lecture since winning the prize.
The lecture, at the University of Cyprus is titled: ‘Equilibrium in the labour market with search frictions, and on job search theory more generally’.
The event is expected to be a full house, with all three hundred places filled by members of the public, dignitaries and students already signed up to hear the laureate.
Born in Cyprus in 1948, Pissarides gained a BA in Economics in 1970 and MA in Economics in 1971 at the University of Essex. He subsequently enrolled at the London School of Economics (LSE), where he received his PhD in Economics in 1973. In addition to the Marfin Laki Chair of European studies at the University of Cyprus, Pissarides also holds currently Norman Sosnow Chair in Economics at LSE.
He has written extensively in professional journals and his book “Equilibrium Unemployment Theory” is a standard reference in the economics of unemployment. He is also a research fellow at the Centre for Economic Policy Research in London and the Institute for the Study of Labour in Bonn, as well as being a member of the Monetary Policy Committee of the Central Bank of Cyprus.
