Petrides: ‘Less socially painful’ green transition may be necessary

Some of the policies earmarked for the green transition may need to be revised as people will be shouldering an enormous burden due to the increasing energy prices, Finance Minister Constantinos Petrides said on Saturday.

In comments made at Eurozone finance ministers meeting in the United States, which was attended by US Treasury Secretary Janet Yellen, Petrides said that there was a need for the world to wean itself off fossil fuels and imports from Russia, but policies must aim also decreasing the price of energy.

“In this context, we have to be honest with the public and admit that the transition will be painful, but we also have to study the revision of some policies of the green transition,” he said.

Petrides said this is imperative as the public are “shouldering the burden” causing enormous reactions, necessitating them to investigate ways for a “smoother and less socially painful transition into the green era”.

There is a need to coordinate policies to address the economic challenges between countries sharing democratic and liberal principles, he added.

Commenting on the ongoing invasion of Ukraine, Petrides said that Cyprus, as a victim of Turkish aggression itself, sided with Ukraine, both through substantial financial aid, but also through its positive attitude towards the formulation and effective implementation of sanctions against the Russian economy.

He said: “An aggression that continues with threats in the Eastern Mediterranean and forces countries like Cyprus and Greece to significantly increase defence spending at a time when due to inflation, the need for a green transition, the need for protection of vulnerable groups, but also the challenges we face in the future, the need for sound public finances and sustainable debt becomes more imperative than ever.”

In this context, unity among all the countries attending the meeting is necessary, both in terms of making economic policy and security policy, he said.

“Therefore, I expressed my satisfaction at the lifting of the arms embargo against the Republic of Cyprus by the USA,” Petrides added.

Also, the finance minister said that there is a need for coordination between European countries but also between the EU and the US at all levels, so that conflicting policies are not adopted between the EU countries, between the EU and the US in terms of the monetary and fiscal policy, “which should be complementary to each other with the aim of combating inflation.”

He also asked for coordination on the issue of sanctions as well as on the possible establishment of a ceiling on the price of imported energy proposed by the USA and some European countries.

“The smooth flow of energy in Europe should be ensured in advance while the sanctions should ensure that they do not harm the one who imposes them but the one who they are being imposed on, and for this reason there must be a thorough study of the effects in advance,” Petrides said.

He also characterised as very important the participation of all countries in this effort, otherwise countries applying the sanctions will be victimised, making special reference to the effects on shipping.