Cyprus Mail

Minister tells stubborn Diko, budget ‘most important’ since 1974

Finance Minister Constantinos Petrides warned repeatedly that if spending was not brought under control the system would collapse

The government on Monday warned of ‘paralysis’ should parliament refuse to green-light the state budget for 2021, particularly since a considerable portion of the allocations relate to coronavirus-related relief for businesses and workers.

“It would be a political act that does not penalise the government, but rather society, working people and vulnerable groups, who at this critical time need state support more than ever,” Finance Minister Constantinos Petrides said.

He was alluding to the stated decision by junior opposition Diko to reject the budget, which comes up for a vote in the House on December 17.

Diko has said it will vote down the balance sheet unless and until the government grants the auditor-general access to files relating to the citizenship-by-investment scheme. But that’s highly unlikely to occur, given that the government is currently on a collision course with the auditor-general.

Petrides stressed the budget must not be used as leverage for other purposes that have nothing to do with matters of economic policy.

He appealed to political parties to act responsibly, approving the budget and allowing the economy to rebound from the current economic crisis.

The minister called this year’s balance sheet the most important one since 1974, and highlighted that – barring 1963 – the Cyprus parliament has never once vetoed the state budget.

Stripping the state of the budget would be akin to engaging in warfare without ammunition, he remarked.

As with any other bill, the state budget requires a plurality of votes – rather than a majority – among the 55 MPs.

As it stands, the parties likely voting in favour are ruling Disy (18 seats), Solidarity (two seats) and the Democratic Cooperaton (three seats), the latter a splinter formed by defecting Diko cadres.

That yields 23 votes, compared to 26 likely votes against from Diko (seven seats), main opposition Akel (16 seats), the Greens (two seats) plus independent MP Anna Theologou.

Up for grabs are six votes, from socialists Edek (three seats), the Citizens Alliance (one seat) and Elam (two seats). With these, the government could muster 29 votes, more than enough to pass the budget bill.

However these smaller parties have yet to indicate how they’ll sway. Should they vote against the budget, or merely abstain, the bill would not make it through.

This scenario assumes that Diko with its seven votes will reject the budget outright. But there’s another possibility: Diko may decide to abstain, meaning the camp pitted against the budget drops to 19 votes – and relieving the government of a major headache.

That is a likely outcome, said political analyst Christoforos Christoforou:

“I don’t think Diko will take it to the extreme, lest they be accused of bringing the state – and the economy – to a standstill. The political fallout on them would be considerable, and keep in mind that the May 2021 parliamentary elections are looming.”

The analyst predicted that Diko will probably end up abstaining.

“As the day of the vote draws near, they might finesse their rhetoric, along the lines that abstention still means they’re not supporting the budget while preventing a government shutdown,” Christoforou told the Cyprus Mail.

Still, a political source familiar with the matter called Diko’s decision to outright veto the budget “final, firm and non-negotiable”.

That said, the voting permutations are many, with the final outcome still very much up in the air.

Should the House reject the budget, the system does have a built-in contingency – though it lasts for a maximum of two months.

Under article 168 of the constitution, where the budget is not approved by the House “by the first day of the financial year to which it relates, the House of Representatives may, subject to the provisions of this Constitution, by a resolution, authorise the meeting of any expenditure required, for a period not exceeding one month at any one time but in any event not exceeding two months in the aggregate, from the Consolidated Fund or other Public Funds as they may consider essential for the continuance of the public services shown in the Budget until the expiration of such period:”

The expenditures authorised in this way cannot exceed the corresponding spending per line item of the preceding financial year.

In short, the contingency will work until February 28 – after which date the state cannot make salary payments to civil servants.

It’s understood that any other expenditures – for example on welfare – would likewise cease.


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