Finance Minister says Cyprus 2013 recovery strategy will work again
Cyprus will follow the same three-pronged strategy for the recovery of the local economy that was adopted after the financial crisis of 2013, Finance Minister Costantinos Petrides said on Tuesday.
Speaking in the 10th Nicosia Economic Congress on Tuesday, hosted online by IMH this year, Petrides along with a number of experts, offered his predictions for the future of local economy in the post-Covid-19 era.
“We need to fix the roof while the sun is shining,” he noted.
He said that the first prong of the strategy is the creation of surpluses. Not just for government, but also for businesses and households.
In this way, we can address future economic crises without building up a burden of debt for our children.
The second prong is to promote structural reforms to increase the competitiveness of the private economy in international markets and to create new employment opportunities. Part of this reform is the creation of the Union of Municipalities, under discussion in the Cyprus Parliament.
The third prong is to correct the mistakes of the past: By managing the large number of non-performing loans (NPLs), for example, which was a decisive factor in recovery from the 2013 financial crisis. This year, the minister said, would be decisive in managing NPLs.
Petrides noted the unexpected pandemic crisis has led to a greater economic crisis than the great depression of 1929 on a world-wide level.
The government was forced to take drastic measures.
“It is for that reason we implemented for the first time strategic support measures, which have included support for business, for the tourism sector in particular, and support for households. “What we have managed to do is to offer a strong social protection network,” he explained.
The state provided a €2 billion financial package of support, corresponding to 7-8 per cent of the gross domestic product (GDP), certainly one of the largest support schemes per capita in Europe.