Cyprus Mail
Cyprus Energy

Energy prospects and tax dodging on troika agenda

Troikans Delia Velculescu (IMF) and Maarten Verwey (EC)

By Constantinos Psillides

CYPRUS’ energy prospects, tax-dodging, and refugees were some of the issue discussed on Friday by the troika delegation, on the island to carry their fourth review of the adjustment programme.

Completing their first week on the island, the troika delegation sat with MPs of the House Refugee Committee. MPs asked the troika delegation to reveal who asked for the cut in financial aid to refugees, but received no answer. The delegation pointed out to MPs that only the government is responsible for dealing with how best to distribute financial burdens among the people and refugees.

The MPs weren’t satisfied with the troika approach and went on to accuse the international lenders of indifference. MPs also targeted the government, with committee chairman Skevi Koukouma saying that “nobody stood up for refugees and nobody talked in length to the troika about the problems the refugees faced”.

Representatives of the delegation told the press that it was the first time they were so thoroughly informed on refugee problems.

The delegation also met with employers’ organisations. Assistant Director General of the Cyprus Employers and Industrialists Federation (OEV) Michalis Antoniou told the press, they had informed them about “the great difficulties businesses face because of the lack of liquidity, and high interest rates”.

Antoniou said the troika seem to share OEV`s assessment “for slow but steady” improvement of the situation, adding that the state takes initiatives that help the economy to maintain its strength and prospects.

Antoniou said, at the meeting they also focused on the extension of shopping hours, through several decrees issued by the labour ministry, and according to him the troika had identified the “positive effects” of this measure on the labour market and the retail trade.

Senior Director of the Cyprus Chamber of Commerce and Industry (KEVE) Leonidas Paschalides noted that the only solution to the lack of liquidity is to attract foreign investment.

He also stressed that the public service needs to be reformed and alter its opening hours as this would better serve businesses.

Paschalides said KEVE did not forecast a slight recovery of the economy in 2015, unlike the troika and the European Commission.

The delegation then met with technocrats from the Internal Revenue Department, with whom they discussed the island’s efforts to deal with tax-dodging. The troika then went on to meet with technocrats from the energy ministry, the state’s natural gas company (DEFA). They discussed issues Cyprus’s energy future as well as budget issues.

The delegation also met with parliamentary parties DIKO and EDEK.

DIKO leader Nicolas Papadopoulos told the press that he asked the troika for a different formula to calculate of non-performing loans (NPLs) that will only be applicable for two years. Papadopoulos added that his party gave troika proposals regarding the protection of primary residences.

House president and EDEK leader Yiannakis Omirou told the press that he warned the troika delegation that the high number of NPLs and the high levels of unemployment were feeding a vicious circle.

The troika delegation is expected to meet with Finance Minister Harris Georgiades today to review their first week on the island.

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