President Nikos Christodoulides met bank heads on Monday for a “useful and constructive exchange” on his proposals for interest rate changes to help vulnerable groups.
Government spokesman Konstantinos Leymbiotis said at the same time it was accepted that banks “must be kept alive and substantial”.
He said the president’s proposals on interest rates are aimed at reliable borrowers and “population groups on which the state can place in its focus.”
The proposed measures will be brought before the finance minister on Wednesday, after their evaluation by the bankers, Letymbiotis said.
Some moves had already been made” towards securing better borrowing and loan conditions for vulnerable groups, including young couples, Letymbiotis said.
“Over €700 million in support packages towards households,” has already been committed to, not counting state subsidies for housing, renewable energy installations, construction incentives, and wage regulation policies enacted over the past 20 months, Letymbiotis said.
The meeting followed the recent upgrades of Cyprus by rating agencies, most recently Standard and Poor’s on Saturday.
“The upgrading of Cyprus’ credit rating by international agencies to a grade A constitutes proof of the correctness of the state’s economic policies,” Letymbiotis said.
“It is a tangible vote of confidence and certainly the result of the collective efforts of the government and the Cypriot populace,” he added.
Stability in the banking sector had been achieved through responsible policies, he said, and any developments would be subject to unfolding contexts.
The steady upward trend of the Cypriot economy, recognised by the credit agencies, would benefit households and citizens both “directly and indirectly” Letymbiotis said.
The government spokesman called for “patience” pending the outcome of Wednesday’s meeting and said the state and the banks had embarked on a “collective course” of constructive, ongoing dialogue.
He said “lessons of the recent past” had been learned over the past ten years and the government was set to avoid pitfalls resulting from a lack of constructive dialogue vis-a-vis banks as private institutions, as well as the irresponsible implementation of measures without a “conscious political compass.”
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