Health Minister Michael Damianos on Sunday said that while there are “certainly problems” with Gesy, it “will not collapse”.

Speaking at an event in the Paphos district village of Panayia, he described Gesy as “the Cypriot people’s greatest achievement in the health sector”, and said that given that it was only created six years ago, “it is normal that problems would arise”.

On this point, he stressed that Gesy “will not collapse”, as “its overall budget guarantees its survival”.

“There are certainly problems, including some abuses which the health insurers’ organisation (HIO) is slowly trying to resolve, and is resolving through technical means, and others,” he said.

He went on to say that the government believes that Gesy “can and will do better”, and that “the goal of the state and the HIO, when there are problems, must be to be able to solve them in a short period of time”.

The Cyprus News Agency had reported last month that Gesy had recorded a budget surplus of €113 million last year, and that it has accumulated €707m in financial reserves.

HIO senior officer Angelos Tropis said at the time that Gesy’s “positive financial situation” allows it to “further and expand the services provided”.

However, Gesy’s healthy balance sheet is not shared by the state health services organisation (Okypy), with the government having stepped in to cover a budget deficit worth around €70m until the end of next year.

Damianos said last month that Okypy is expected to run a €40m deficit this year and a €30m deficit next year, with “necessary capital expenditures for the upgrade of state hospitals” also in the pipeline.

In November, the health ministry and Okypy had signed a memorandum of understanding which they said at the time would ensure Okypy’s financial and administrative autonomy.

Damianos said the deal has “five thematic axes”, all of which are planned to be implemented by the end of next year.

Okypy, he said, will be legally obliged to implement the plan’s stipulations, which include an increase in revenue, a reduction of costs, the reimbursement of services provided by the health insurers’ organisation (HIO), capital investments, and structural changes.

Okypy spokesman Charalambos Charilaou told the Cyprus Mail at the time that while detailed plans have been devised to achieve these aims, they cannot be disclosed.

The state funding for Okypy’s deficits until the end of next year was approved by MPs on Thursday.