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Private initiative and entrepreneurship will drive economic recovery

Finance Minister Harris Georgiades

The economic recovery of Cyprus will ultimately be driven by private initiative and entrepreneurship, Finance Minister Harris Georgiades said on Thursday,

Addressing the 7th international conference for entrepreneurship, innovation and regional development (ICEIRD) 2014, Georgiades said Cyprus “is engaged in a fully-fledged effort of economic reform and re-establishment of confidence,” not simply to overcome the problems, which had been allowed to worsen in the previous years, but “to create the foundation for a new, healthier, and more viable economic model.”

He said that the economy was characterized by an oversized public sector and an over-extended banking sector.

The public sector wage bill was the highest, in proportion, in the entire EU, and the banking sector attracted sizeable foreign deposits, through high interest rates, which were unwisely directed primarily towards consumption and a property bubble.

Private debt in Cyprus also came to be the highest in the entire EU, he said.

“Our concerted efforts aim at restoring the soundness of the banking sector, consolidating our public finances and implementing structural reforms,” he said.

The Minister pointed out that “the public sector and the banking sector should be in the service of the productive sector of the economy,” adding that “economic recovery will ultimately be driven by private initiative and entrepreneurship.”

“Cyprus innovative SMEs (startups) are actually hiring people even in these dire economic conditions.”

Also speaking at the conference, Energy and Trade Minister Giorgos Lakkotrypis said the government will grant some €30 million between 2014 and 2020 through new schemes and programmes aimed at boosting innovation.

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