23/09/2015 20:56
Cyprus economic policy has confirmed that fiscal consolidation if properly designed and undertaken does not lead the economy into a deeper recession, said Finance Minister Harris Georgiades in a presentation of the prospects of the Cypriot economy at a Conference for Family Business organized by KPMG.
In the case of Cyprus, he said, fiscal consolidation was combined with the correction course of real economy and the exit from the cycle of recession. At the same time he stressed that the effort has not yet been completed.
"Our goal was fiscal consolidation but in a way that would reduce the burden for households and enterprises of our country. I think we have achieved this goal" he said.
The Finance Minister also said that in the coming days he will submit to the parliament the state budget for 2016, a completely balanced budget, which has room for a moderate increase in primary expenditure, mainly for growth.
As he also said the top challenge for the government now is to continue the efforts for structural changes and substantial reforms, such as reform of the public service, attracting strategic investors for state telecommunications and ports and the autonomization of public-sector hospitals as a prerequisite for implementation of the General Health Scheme.
"There is still much to be done and there is no room for relaxation of the effort," he said, noting also the high unemployment problem and the challenge of non-performing loans.
He added that tackling those two problems requires a lot more than two quarters of positive growth, and also a competitive and productive economy without the excesses and imbalances of the recent past. At the same time he pointed out that the Government is determined to implement the necessary changes to ensure the competitiveness of the economy.
The Finance Minister noted the difficult decisions that the Government had taken with the drastic reduction of state spending, the end of recruitment in the public service, the application of measurable and reliable criteria for the provision of social benefits and the abolition of public organizations that no longer had a role and mission.
However, the Minister said, "we didn't impose any new taxes during the last two years despite the difficulties arising from placing the country in a program." At the same time he referred to the tax reform of the Government which, as he said, includes specific incentives to encourage economic activity and investment.
In the case of Cyprus, he said, fiscal consolidation was combined with the correction course of real economy and the exit from the cycle of recession. At the same time he stressed that the effort has not yet been completed.
"Our goal was fiscal consolidation but in a way that would reduce the burden for households and enterprises of our country. I think we have achieved this goal" he said.
The Finance Minister also said that in the coming days he will submit to the parliament the state budget for 2016, a completely balanced budget, which has room for a moderate increase in primary expenditure, mainly for growth.
As he also said the top challenge for the government now is to continue the efforts for structural changes and substantial reforms, such as reform of the public service, attracting strategic investors for state telecommunications and ports and the autonomization of public-sector hospitals as a prerequisite for implementation of the General Health Scheme.
"There is still much to be done and there is no room for relaxation of the effort," he said, noting also the high unemployment problem and the challenge of non-performing loans.
He added that tackling those two problems requires a lot more than two quarters of positive growth, and also a competitive and productive economy without the excesses and imbalances of the recent past. At the same time he pointed out that the Government is determined to implement the necessary changes to ensure the competitiveness of the economy.
The Finance Minister noted the difficult decisions that the Government had taken with the drastic reduction of state spending, the end of recruitment in the public service, the application of measurable and reliable criteria for the provision of social benefits and the abolition of public organizations that no longer had a role and mission.
However, the Minister said, "we didn't impose any new taxes during the last two years despite the difficulties arising from placing the country in a program." At the same time he referred to the tax reform of the Government which, as he said, includes specific incentives to encourage economic activity and investment.