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Cyprus

Georgiades says he feels ‘completely powerless’ after reforms’ rejection

Harris Georgiades (left) with John Hourican answer students' questions

Finance Minister Harris Georgiades said on Thursday he felt “completely powerless” when it came to conducting the economy.

He was remarking to a tagline during a discussion and Q&A with high-school and college students, where he and Bank of Cyprus CEO John Hourican were introduced as “two of the most powerful men in the Cypriot economy.”

“I would have no problem with being the third, fourth or seventh most powerful man in the Cypriot economy,” Georgiades said.

“But lately, and in the wake of some very recent decisions, I actually feel completely powerless.”

He was alluding to parliament’s recent rejection of the government’s civil service reform package. Last week opposition parties voted down five of the six government bills, including legislation linking the public payroll to GDP performance.

Georgiades went on to say that whereas he was disappointed with parliament’s decision, he hoped that the rejection of the package was not final and a way could still be found to push through the reforms.

On the Commission’s post-programme surveillance report on Cyprus, the minister said that he agreed with its broad strokes.

The report highlighted the need to press on with fiscal consolidation.

“I feel that we have learned from our mistakes, but at the same time I worry, as I notice the re-emergence of certain behaviours and mentalities that are in the opposite direction,” Georgiades said.

He and Hourican were answering students’ questions on a variety of topics, including non-performing loans, tax evasion and even US President-elect Donald Trump’s choice of Bank of Cyprus vice chairman Wilbur Ross for commerce secretary.

Hourican said the appointment of Ross – who led the way in the €1 billion recapitalization of Bank of Cyprus in 2014 – was a positive development, since it could theoretically grant Cyprus access to the US government.

But access and favours were not the same, Hourican added.

According to Hourican, Bank of Cyprus is close to extinguishing its Emergency Liquidity Assistance (ELA) financing. He said the lender’s ELA financing has dropped from a peak of €11.4 billion in 2013, to €300 million currently.

 

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