Cyprus one of the best performing economies in Europe, says Klaus Regling

Cyprus one of the best performing economies in Europe, says Klaus Regling

Cypriot Finance Minister, Haris Georgiades, had a meeting with the Head of European Stability Mechanism (ESM) Klaus Regling.

Speaking after the meeting to the representatives of the media, Minister Haris Georgiades, outlining the meeting as very useful, said he had the opportunity to resume the commitment of the Cypriot government “to the continuation of this effort that allowed us to complete the memorandum, to exit the recession and enter for good a path of recovery and growth”. The minister explained in figures that despite the fact that the Presidential Elections are close, the prudent management of public finances remains unaffected.

He added that 2017, as was with 2016, will close with a surplus budget balance (surplus budget), and that the 2018 state budget, which has already been tabled in the House of Representatives, will also have a positive sign.

In this way, Georgiades stressed, “through the stability of public finances and through policies that offer incentives and encouragement to our productive sectors, we will further support growth. We have reached a satisfactory level in terms of growth rates, reducing unemployment and generating economic activity. The bet for the coming period is to consolidate this growth perspective to go even further”.

The finance minister also informed the ESM Chief of Planning and Management in relation to public debt that the fact that public debt will be below the symbolic limit of 100% before the end of the year.

Finally, he mentioned with that Regling he had the opportunity to discuss issues concerning the future role of ESM in the context of European economic governance. As the minister said, “our experience and cooperation with ESM has been and is excellent. It is a European institution we know and trust, and we have no reservation as a Member State and as a member of the ESM to support any extended role and responsibilities of the ESM”.

For his part, Regling said that every year when he comes to Nicosia, the situation is better than the year before. “And it is always much better, there have been positive surprises. It is obvious that growth is much stronger than anybody expected, the budget surplus is very reliable, and unemployment is declining rapidly”, he said.

“With this good data, with this good performance, Cyprus is now one of the best performing economies in Europe”, he said, adding that this is a very positive step, expressing the belief that it is confirmed that the approach followed 2013, at the beginning of the crisis, was the right one.

“It was not easy. It was not easy for the citizens of Cyprus, but it was fruitful. When I see the forecasts, they really look very positive”, he added.

As he said, however, every economy has some challenges, and challenges still remain in Cyprus. “The banking sector, where the level of non-performing loans is relatively high, has a low profitability. So I think banks must continue to work on it and the government should see how it can support this process through the reform of the legal system, by ensuring that the solvency law works well”, he said, encouraging the continuation of the reforms with privatisations in the wider public sector.

He expressed satisfaction that the finance minister reiterated that the prudent fiscal policy of recent years will continue in the future. “I find it very encouraging and it’s something we support a lot in the ESM”, he said.

Finally, he expressed gratitude to the Georgiades for his support to the debates taking place in the Eurogroup and the Eurozone in general, on the deepening of the European Monetary Union and on a potentially more powerful role for the ESM./IBNA