Cyprus Mail
Guest ColumnistOpinion

The challenging road ahead

By Harris Georgiades

JUST THREE years after the climax of the worst crisis since the establishment of our state, the Cyprus economy is back on the right path.

In Europe our country is now considered a shining example of how an economic crisis should be tackled. Cyprus now features in articles in the international press for its achievements and not its problems. Of course, the consequences of the crisis are still being felt, but comparisons should be made not with a sound economy, but with the conditions of economic collapse shaped in the five years before March 2013.

Everyone should consider the state the economy was in three years ago and where it stands now. We could list all the forecasts – by those who disagreed and by those who voted against all the reforms – and how many of these have been proved wrong. Let us recall a few: we are in the euro, we did not impose new taxes, we did not need a second memorandum, we were not led into an ever-deepening recession, the Troika did not get its hands on our natural gas, society did suffer but destitution was avoided. In short, today we are back on the path to recovery and development. We have, in effect, earned a second chance.

And it is exactly now at this juncture that we are called upon to choose the road we will follow.

One road is the one we followed in the past. It is the one of negligence in relation to the management of public finances. It is the one of constant pressure for appointments and pay rises in the public sector, for constant expansion of benefits and hand-outs offered by the state, usually not to those entitled to them but to those who claim them the most vociferously. It is the road of those who condemn austerity, but do not realise that the deficits and debts of this irresponsible management always land on the taxpayer in a way that undermines the future and the prospects of development. It is the road of complacency, with a banking system – including the co-operative banks – that lent recklessly. It is the attitude that considers state organisations public wealth but is indifferent to their systematic plundering. It is the road of conservatism which is chosen by those who resist every change and hide behind dogmatism and slogans.

The other road is not easy at all. It is the one of prudent management of public finances. This means balanced budgets and control of public spending, especially of the state payroll and benefits.

It means that recruitment and pay rises in the public sector must be reasonable and in line with the performance of the economy as stipulated in the proposed legislation that has been before the legislature since last August. It means that all possibilities of transfers of existing staff will be explored before the option of new appointments is considered, as stipulated in another proposed bill tabled in the House some time ago.

This approach carries the challenge of change and reform. One example is the radical reform of social policy that has already been implemented, offering cover to thousands of our compatriots who were in genuine need while also excluding others who should never have been eligible. Another is the ceding of the running of the ports to a private investor, the finding of a strategic partner for CyTA and the operation of the state lottery by a private company.

This road demands that the banks operate in a framework of trustworthiness and manage responsibly the money of their depositors who paid a very high price for the mistakes of the past; that they fund the real needs of individuals and businesses but will also ensure the loans they give will be repaid.

This road assumes the courage to say ‘no’ when it is necessary. It prioritises the beneficial and not always the popular. It is not the road that seemingly ‘suited’ us in previous years.

But it is the only road that can lead the country forward. Unfortunately, we had to reach the brink of total catastrophe to understand this. Some, however, even today remain stuck in antiquated attitudes, frequently longing for the spoils of the past.

This is the time the people are also obliged to take their on responsibilities. It is the time for the silent majority who are struggling and worrying about tomorrow, and not for those who make a lot of noise and remain stuck in the past. Now is the time we must find the strength to say a big ‘no’ to populism and instead encourage rationality so that we keep our country on the road of responsibility, consistency and prudence. It is the only way to ensure that we do not wake up to days like those we faced in March 2013 again.


Harris Georgiades is the minister of finance

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