We need to prevent ‘a lost generation’

We need to prevent ‘a lost generation’

Nicosia, May 21, 2015/ Independent Balkan News Agency

By Kyriacos Kyriacou

Cyprus House of Representatives President Yiannakis Omirou called for the adoption of growth-generating policies in Cyprus with a view to addressing the high unemployment hampering the Cypriot economy.

Addressing the 5th Nicosia Economic Congress, Omirou said two years after the unprecedented decisions associated with the €10 bililon bailout, the economy is stabilising, but noted that a lot need to be done towards reducing high unemployment, non-performing loans and putting the economy back on a sustainable growth track.

“Taking stock of the situation, there is a lot to be done – a shift towards growth-generating policies is crucial, in order to address the high levels of unemployment, that are recorded in Cyprus, especially youth unemployment,” he said, adding “there is a need to at least try to prevent the “loss of a generation”, by taking concrete measures and adopting policies that do not focus on austerity, but rather on growth.”

Omirou pointed out that this shift is also evident on a European level, through the recent implementation of the European Central Bank’s policy of quantitative easing, the implementation of which has started in March 2015 and, potentially following the positive completion of the current Troika evaluation, Cyprus will be eligible for participation.

The House President noted that to enhance the efficiency of this policy and restore the European economy to growth, the ECB quantitative easing programme “should be combined with a plan to strengthen public and government spending and the application of important growth policies contained in the Juncker package.”

Omirou added that liquidity needs to be restored in the Cyprus economy, but, in order to achieve this, the challenge of the non-performing loans needs to be effectively addressed, adding “the high level of private debt and the need of the businesses to deleverage, make financing of new initiatives and creation of employment opportunities difficult.”

“That is why it is very important to improve the business environment in Cyprus, so as to attract investment capital”, he added.

Omirou stressed that the implementation of the foreclosures law and the insolvency framework, a crucial element of Cyprus` programme implementation, “shall be closely monitored to avoid social unrest and mass foreclosures that will also undermine the stability of the financial sector.”

Referring to structural reforms underway in Cyprus, such as the restructuring of the public and health sectors and privatisations of state-owned organisations, Omirou said restructuring and reorganising such organisations is necessary in this continuously evolving international business environment.

“Private sector involvement will help in this direction, but we need to safeguard national security and the rights of the employees and to avoid the creation of private monopolies. That is the reason why, providing just a minority interest of the share capital of these organisations to the private sector, may be a more proper solution for Cyprus,” he went on to say.