Cyprus Mail
Business Cyprus

Projects worth €280m, cap controls lifted (Updated)

By George Psyllides

President Nicos Anastasiades on Friday announced a series of measures to boost growth and curb unemployment, as Cyprus abolished remaining capital controls, imposed two years ago to prevent a bank run as the island negotiated a messy bailout.

“As a result of everyone’s hard work and consistency in implementing the obligations we assumed under the known circumstances, 24 months after assuming the administration, we can today, speak of a definite reversal of an unprecedented crisis we were called on to manage,” Anastasiades said during a televised news conference.

The president said the government had taken difficult decisions and implemented a politically difficult but necessary programme without ignoring the social role that the state had to play.

“As a result … today I am pleased to announced additional measures that will contribute decisively to the new course for our country’s economy,” Anastasiades said.

Anastasiades said the cabinet decided to invite tenders immediately for projects worth over €200 million including sewerage systems and improvement of road networks.

An additional €80 million will be spent on upgrading hospitals and building new health centres, upgrading and building new schools, and tourism infrastructure.

The government will also expedite implementation of the second phase of the University of Cyprus campus worth €162 million, the president said.

It includes new buildings, labs, and a large photovoltaic park.

“These are projects of high social benefit for which we succeeded in securing resources without endangering fiscal consolidation,” the president said.

He said the government would try to implement the projects as soon as possible and would seek the help of the auditor-general to ensure the competitions are well prepared and transparent to avoid time-consuming procedures.

Anastasiades expressed hope that projects would get underway by autumn or earlier but noted that that was something he could not guarantee.

The cabinet also decided to introduce nine schemes worth €58 million designed to boost employment.

The schemes include incentives to hire unemployed people, placement of unemployed graduates of various levels of education to gain work experience, training, and subsidies.

There are also three plans for incentives to encourage people with disabilities and those from vulnerable groups.

In 2014, 6,200 people were employed through similar schemes.

He noted that for people to prosper numbers must prosper first.

Two years after its messy bailout that saw the closure of one bank and the seizure of deposits to recapitalise another, Cyprus appeared to be on a course to recovery but kept a concerned eye on Greece.

Asked if the island was prepared for a possible fallout in the event Greece left the eurozone, Anastasiades said contingency plans were in place for such an event.

“But because we have a Cypriot saying that ‘wise kids cook before they are hungry’ … I want to assure you that all exercises on paper have been done, for any eventuality.

“Firstly there is no large risk any more to the Cypriot economy. Measures are planned so that whatever minimal (risk) remaining is mitigated even further,” he said, without elaborating.

Earlier, Anastasiades announced the lifting of remaining capital controls imposed in March 2013 to prevent a bank run.

“It Shows full confidence to the banking system, which, now fully independent of Greek banking institutions, can move forward.”

DIKO was quick to reject the measures, saying they were the same pledges the president was making for the past two years “but unfortunately we don’t see them implemented.”

Party chairman Nicolas Papadopoulos said the measures to curb unemployment were also the same announced two years ago, which have failed.

“So we ought to ask, for what reason does the DISY government want to repeat measures for unemployment that failed,” DIKO Papadopoulos said.

Main opposition AKEL said the €80 million in additional projects was positive but not enough.

“There are dozens of mature projects that have been suspended in the government’s bid to create a fiscal cushion,” the party said.

It reiterated its accusation that the government imposed cuts exceeding €500 million over and above those demanded by international lenders.

“Today, the government opts to implement part of these development projects, presenting them as new announcements.”

EDEK said it hoped the measures would not suffer the same fate as previous ones.

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