Cyprus Mail

‘Reforms will continue after bailout exit’

Finance Minister Harris Georgiades

By Jean Christou

Even if Cyprus exits its bailout programme early as predicted, the type of reforms stipulated under the memorandum will continue, Finance Minister Harris Georgiades said on Saturday.

Georgiades made the comment in an address to ruling DISY’s political bureau.

“This image of trust that international markets show to Cyprus is directly related to the implementation of the programme for some time to come, which we have undertaken. And just because some are beginning to perceive the prospect of exiting the bailout, they have started changing their tune. But once we are out of the memorandum nothing will change. The EU always imposes strict rules,” he said.

European Central Bank (ECB) president Mario Draghi said last month Cyprus was on track to exit its 2013 adjustment programme before the original deadline of 2016.

Georgiades referred to how fast the economy bounced back once a real effort was made at reforms, which, he added must continue.

He said he hoped that when Cyprus emerges from the memorandum that some things, “including our perceptions and attitudes” may have changed.

He also said it needed to be realised that restarting the economy through the banking system could not be done from one day to the next “especially when we take into account that two years ago the banking system was in tatters.”

The minister did say that interest rates could and should be reduced, as they remain high in comparison to the remainder of the EU but in the last two years, there had been a deceleration “to the extent that today we have the lowest rates ever for Cyprus,” he added.

Having stabilised the economy, the government needed to focus all of its efforts on “politically difficult reforms”, he said, referring to the fiercely-opposed privatisation of the bigger semi-state bodies.

“We need to promote changes that will help create a new healthier model of economic development, including through the promotion of reforms seemingly not directly related to economic policy,” he said.

Georgiades said he was optimistic.

“There is a basic requirement that these prospects will strengthen with the adoption of a new approach that marginalises populism and slogans and promotes decisions that are difficult but absolutely necessary,” Georgiades said.

The minister said he neither agreed with the polarisation that either of the words ‘austerity’ or ‘development’ induced.

“This was and is an artificial dilemma for those who wish to avoid the difficult but necessary decisions. The policy we are following is not a policy of austerity but rather growth through consolidation and reform.”


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