Finance Minister Constantinos Petrides on Tuesday charged Akel-backed independent presidential candidate Andreas Mavroyiannis with taking a populist stance on the economy, criticising his proposed policies and saying it was Akel that brought on the 2013 financial crisis with similar policies.

In statements earlier in the day, Mavroyiannis said that since the Co-op bank was closed, a huge gap has emerged with high interest rates causing problems for middle class people, and others in Cyprus.

Rebutting that, Petrides said Mavroyiannis’ proposals are catastrophic and are those that brought about the crisis.

He criticised him for relentlessly promising to increase benefits, subsidies and reduce taxes, noting that there is no cost estimation and no explanation of where the resources will come from, the impact on public finances, or the impact on the country’s ratings.

“With the inevitable result being the creation of fiscal deficits, the increase in public debt, and the degradation the Cypriot economy, bringing back memories of the events of 2011 and the memorandum periods,” he said.

Regarding the abolition of the 12 per cent pension reduction for those who retire prematurely, Petrides said that it is a measure promoted and instituted by the Akel government through former Labour Minister Sotiroulla Charalambous, which will essentially reduce the retirement age to 63 from the age of 65, creating a huge hole in the Social Insurance Fund, jeopardising the biggest social conquest since 1960, ignoring that the pensions of vulnerable fellow citizens will be at risk.

He added: “Logistically, we will automatically be led to an increase in contributions burdening the workers for the benefit of pensioners, burdening the economy since it will increase the cost of employment resulting in a reduction of jobs and an increase in unemployment.”

Petrides said that the government proposes a holistic restructuring of the pension system in a logical, sustainable manner and institutionalisation of the second pillar in the private sector as well.

Regarding the promise by Mavroyiannis to reinstate the Co-op Bank, the minster said that the candidate did not mention where the billions needed for funds or the operating plan will be found, “unless he means that the state, the tax-paying citizen, will cover them, in order to allow strategic defaulters to borrow uncontrollably at the expense of the state and the tax-paying citizen with a consequent increase in public debt and the budget deficit.”

According to Petrides, Mavroyiannis’ justification for the need to re-establish the bank is based on the logic of ‘easy loans’ and he criticised him for ignoring European data, modern strict supervisory requirements, and referred to the decades of uncontrolled lending and insufficient supervision that cost the taxpayer several billions in losses, leading to an increase in public debt.

For the abolition of double taxation on fuel, the minister stated that such a proposal contradicts European legislation and is not a feasible proposal that Germany also demanded from the European Commission, but was rejected.

“He claims to have the magic wand to deal with the consequences of rising interest rates and is possibly the only politician in Europe willing and able to reverse the policies of the European Monetary Authorities and ignores the economic reasons behind this policy such as reducing of inflation and price containment,” he said.

Petrides added that it is obvious that both Mavroyiannis and Akel “have not realised that the economic policies they followed during the five-year period 2008-2012 were wrong and led the country to economic disaster and they want to repeat them.”

He said that Mavroyiannis and Akel “are either toying with us, or they have not learned anything in terms of economic policy, remaining anchored in outdated and failed ideological doctrines, which in the rest of the European Union constitute a black past.”