The European Commission on Thursday recommended Cyprus take action in 2020 and 2021 to strengthen the resilience and capacity of its health system.
In line with the general escape clause, Cyprus should “take all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery. When economic conditions allow, pursue fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability, while enhancing investment. Strengthen the resilience and capacity of the health system to ensure quality and affordable services, including by improving health workers’ working conditions.”
The commission said Cyprus needs to “secure adequate access to finance and liquidity, especially for small and medium-sized enterprises and step up action to address features of the tax system that facilitate aggressive tax planning by individuals and multinationals,” in its Country Specific Recommendations, adopted by the College of Commissioners.
The EU body added when Cyprus is ready the government should pursue fiscal policies to achieve medium-term fiscal positions and ensure debt sustainability, while at the same time enhance investment.
“Authorities should take action to provide adequate income replacement and access to social protection for all and strengthen public employment services, promote flexible working arrangements and improve labour market relevance of education and training,” the commission said.
The country also needs to ‘focus on investment on the green and digital transition, in particular on clean and efficient production and use of energy, waste and water management, sustainable transport, digitalisation, and research and innovation.’
“Cyprus should step up action to address features of the tax system that facilitate aggressive tax planning by individuals and multinationals. Improve the efficiency and digitalisation of the judicial system and the public sector,” the commission said.
Meanwhile, Finance Minister Constantinos Petrides said Cyprus will request funds from the European Stability Mechanism (ESM) to receive cheaper liquidity to cover increased healthcare costs from coronavirus.
Speaking on an internet program Science Hoaxes, he said: “Of course, we will take advantage of the ESM for healthcare funds.”
Petrides added the health expenses that have been paid or will be paid, including the new intensive care unit at Nicosia General and tests for the virus, need to be evaluated first.
Commenting on the testing, he said in Cyprus there have approximately 90,000 tests conducted largely at the cost of the government.
“The goal is to evaluate (the funds) and receive a loan from the ESM with cheap liquidity,” he said.
Under the terms agreed by the Eurozone finance ministers, the loans under the ESM fund with a total capacity of €540 billion are provided to cover health expenditures and without prerequisites. Each state can raise up to two per cent of its GDP in 2019.