Budget debate opens

By Evie Andreou

Parliament on Wednesday afternoon began the debate on the 2016 state budget, the last to be voted for in parliament under the conditions of the financial support programme Cyprus signed with its international creditors in 2013.

The budget provides for a 1.3 per cent increase in revenue to over €5.9bn and a 0.3 per cent reduction of expenditure excluding loan repayments to below €6.1bn. The 5 per cent increase in development expenditure will offset a 16 per cent drop in interest payments. The government revised its expected 2015 revenue and expenditure to below €5.9bn and below €6.7bn. The 2016 government expenditure for development projects will be 5 higher per cent compared to 2015.

The debate began with the read out of the House Finance Committee report followed by addresses of the leaders or representatives of the parliamentary parties.

CyBC said that the budget is expected to be passed with the votes of DISY, DIKO and EVROKO. It is to be voted against by EDEK, AKEL, the Greens, the Citizens Alliance and independent MP Zacharias Koulias. EDEK, CyBC said, expressed its intention to vote in favour of only the defence budget only. The debate

is expected to be completed on Thursday with the final vote.

During his speech, main opposition AKEL leader Andros Kyprianou, criticised the government for its economic policies. He said the government was not telling the whole truth, since an exit from the bailout did not mean the end of austerity policies “as the government declares daily”. He also said privatisations were clearly an ideological issue for the government and that it also “demolishes the health system to serve private interests”.

Kyprianou said that the government was celebrating the exit to international markets and the so-called low in interest rates it secured. “It does not bother them that in Cyprus we pay the highest interest rates in the Eurozone. They consistently invoke banking sector achievements and its supposed stabilisation. They don’t mention that banks do not give out new loans or that they need new recapitalisation,” Kyprianou said.  He also criticised the government for taking the allowances of the poor to give it to the poorer without touching the rich.

The head of ruling DISY Averof Neophytou said the budget marked the exit of Cyprus from the memorandum, and the end of the period where the country’s serious decisions had to have the prior consent of the troika of lenders.

Next March, he said, “we will have the successful completion of the three-year period in which the country had to recover, stabilise and regain respect”. Cyprus today, he said, is more reliable than ever before, at an economic, national, regional, and European level.  He said “the major problems we face are high debts and non-performing loans, and unemployment”.

The head of DIKO Nicolas Papadopoulos said that the biggest problem was the non-performing loans which he called a time-bomb. He proposed the creation of an agency that would manage the loans.

“The economy has presented growth, but there has also been an increase in inequality,” Papadopoulos said. He added that the majority got poorer, while a minority got richer.

 

 

 

 

 

 

 

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.