07/03/2013 06:59
The government is giving battle with the heads of the troika to finalize the memorandum and to avoid tough measures that would affect Cyprus’s position as financial centre.
At the highest political level, the government will have contacts in Greece - and possibly in Germany and Russia - to secure the necessary political support.
The President will travel to Greece in the next few days and part of the discussion will be the recapitalization of banks in Cyprus. Efforts are being made for contacts with Angela Merkel while the attitude of the Russian government, which after the election of Anastasiades keeps silent, is the key.
On a technocratic level, negotiations with the heads of the troika are ongoing, with the government trying to challenge with numbers the issues that seem to have been raised by the technocrats of the three organizations (EU, ECB, IMF) for an increase in corporate taxation and substantial contribution of private creditors of the banks.
To convince for the sustainability of the debt, the government now bets on the disposal of the shares to be acquired from banks. The Governor raised the total revenues that will emerge next year to €3 billion - based on Pimco’s report.
The troika wants to know what the plans of the Cypriot banks are over the next year to see if indeed the net asset value - and therefore the price of the sale - will reach the desired level. The CB is pushing banks to accelerate the preparation of the restructuring plans in order to provide as much information as possible to the troika to introduce the model for the debt.
The government is also trying to moderate expectations on privatizations. The so-called "emergency" Government Spokesman, Christos Stylianides create a climate of differentiation of the government’s attitude on the issue and the creditors.
The difficult part of the treatment of creditors has been undertaken by Michalis Sarris, who, so far, is sparing and careful in his statements.
Finance Minister, Michalis Sarris and his economic team yesterday set a number of arguments to the creditors during the four-hour negotiation at the ministry in order to substantiate concerns that any increase in the corporate tax would cause serious economic impact on the country.
The issue occupied the interim meeting of the technocrats under Michalis Sarris and in the presence of Nobel laureate and Chairman of the National Council of Economy Christoforos Pissarides.
The President, who started yesterday contacts with businessmen, bankers and trade unionists, assures that he will not accept haircut on deposits or an increase in the corporate tax.
The red lines
President Anastasiades, according to a source who attended yesterday's meeting with the leaders of employers' organizations OEB and CCCI, made clear that the Cypriot side can not afford to accept, either an increase in the corporate tax or a haircut of deposits.
He emphasized that the measures for growth are at the top of his personal agenda and within the framework of his political statements, and so are the incentives to revitalize the manufacturing sector. Instructions have already been given, he said, the relevant bills to be submitted to the Parliament.
He admitted that the current circumstances and conditions do not require traditional doctrinal positions and that the period of sacred cows is not offered in the broader context of reconstruction and modernization of the state.
Appeal for labour peace
The President also made it clear to both the employers and trade unions that the country does not have the luxury of labour disputes and dynamic movements. He pointed to the two social partners to ensure in this critical period for the country the labour peace and pledged that his government will respect and promote social dialogue.
At the same time, he stressed that he will be relentless with the illegal and undeclared work and he will try to give priority to the employment of the Cypriot workers.
Indeed, he gave the formula of employment in the private sector (70% Cypriots and 30% foreigners), despite the fact that, as pointed out, legally can not stand but he asked employers and unions to implement it at their sole discretion.
At the meeting of President Anastasiades with the leaders of the banks, the two sides raised the issue of protecting the validity of the banking system which, as noted, was affected seriously lately.
At the same time, the leaders of the three banks informed the President on the efforts to restructure the banking system and the President of the Republic indicated that the matter is urgent because “it emerges through the provisions of the Memorandum”.
At the highest political level, the government will have contacts in Greece - and possibly in Germany and Russia - to secure the necessary political support.
The President will travel to Greece in the next few days and part of the discussion will be the recapitalization of banks in Cyprus. Efforts are being made for contacts with Angela Merkel while the attitude of the Russian government, which after the election of Anastasiades keeps silent, is the key.
On a technocratic level, negotiations with the heads of the troika are ongoing, with the government trying to challenge with numbers the issues that seem to have been raised by the technocrats of the three organizations (EU, ECB, IMF) for an increase in corporate taxation and substantial contribution of private creditors of the banks.
To convince for the sustainability of the debt, the government now bets on the disposal of the shares to be acquired from banks. The Governor raised the total revenues that will emerge next year to €3 billion - based on Pimco’s report.
The troika wants to know what the plans of the Cypriot banks are over the next year to see if indeed the net asset value - and therefore the price of the sale - will reach the desired level. The CB is pushing banks to accelerate the preparation of the restructuring plans in order to provide as much information as possible to the troika to introduce the model for the debt.
The government is also trying to moderate expectations on privatizations. The so-called "emergency" Government Spokesman, Christos Stylianides create a climate of differentiation of the government’s attitude on the issue and the creditors.
The difficult part of the treatment of creditors has been undertaken by Michalis Sarris, who, so far, is sparing and careful in his statements.
Finance Minister, Michalis Sarris and his economic team yesterday set a number of arguments to the creditors during the four-hour negotiation at the ministry in order to substantiate concerns that any increase in the corporate tax would cause serious economic impact on the country.
The issue occupied the interim meeting of the technocrats under Michalis Sarris and in the presence of Nobel laureate and Chairman of the National Council of Economy Christoforos Pissarides.
The President, who started yesterday contacts with businessmen, bankers and trade unionists, assures that he will not accept haircut on deposits or an increase in the corporate tax.
The red lines
President Anastasiades, according to a source who attended yesterday's meeting with the leaders of employers' organizations OEB and CCCI, made clear that the Cypriot side can not afford to accept, either an increase in the corporate tax or a haircut of deposits.
He emphasized that the measures for growth are at the top of his personal agenda and within the framework of his political statements, and so are the incentives to revitalize the manufacturing sector. Instructions have already been given, he said, the relevant bills to be submitted to the Parliament.
He admitted that the current circumstances and conditions do not require traditional doctrinal positions and that the period of sacred cows is not offered in the broader context of reconstruction and modernization of the state.
Appeal for labour peace
The President also made it clear to both the employers and trade unions that the country does not have the luxury of labour disputes and dynamic movements. He pointed to the two social partners to ensure in this critical period for the country the labour peace and pledged that his government will respect and promote social dialogue.
At the same time, he stressed that he will be relentless with the illegal and undeclared work and he will try to give priority to the employment of the Cypriot workers.
Indeed, he gave the formula of employment in the private sector (70% Cypriots and 30% foreigners), despite the fact that, as pointed out, legally can not stand but he asked employers and unions to implement it at their sole discretion.
At the meeting of President Anastasiades with the leaders of the banks, the two sides raised the issue of protecting the validity of the banking system which, as noted, was affected seriously lately.
At the same time, the leaders of the three banks informed the President on the efforts to restructure the banking system and the President of the Republic indicated that the matter is urgent because “it emerges through the provisions of the Memorandum”.
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