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MFA: The main goals of the economy for the 1st year of government were implemented

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Mr. Keravnos underlined that “the Cypriot economy is on a healthy course despite significant challenges and uncertainties”

ΥΠΟΙΚ: Οι κyριο&iota σοοοοο ;σδιβρησοποιθκν /></p> <p>The main and planned objectives of the economic policy for the first year of the administration of Nikos Christodoulidis have all been implemented or are in the stage of full implementation, stressed the Minister of Finance Makis Keraynos, underlining at the same time that “the Cypriot economy is on a healthy path despite the significant challenges and uncertainties”.</p> <p>Speaking in the context of a press conference on the assessment of the 1st year of the implementation of the governance program of the Ministry of Finance, Mr. Keravnos said that “the Ministry of Finance feels that it has achieved all the goals, we feel that they have been achievements within a very short period of time”.</p> <p>“We are continuing the efforts for an economic policy, which will aim at a fairer distribution of income and produced wealth”, he underlined.</p> <p>The Minister of Finance said that his “personal responsibility is to maintain healthy public finances and ensuring macroeconomic stability and financial stability through rational management of resources to improve the standard of living of every citizen”.</p> <p>He stated that “in the first year of government a very important project was produced in a very difficult economic environment”.< /p> </p> <p>“We continue to monitor the difficulties and challenges and any possible developments and to adopt the appropriate measures within the framework of always a human-centered economic policy, within the framework of our capabilities, and always focusing on fiscal discipline and financial stability because the memories are still fresh for what had happened when they exceeded these basic parameters”, he underlined.</p> <p>Vision, according to Mr. Keravnos, “is the continuous strengthening of the resilience of our economy, in conditions of fiscal and financial stability, utilizing the comparative advantages of our economy, as well as our valuable human resources, so that through a human-centered economic policy to improve the well-being of our society and protect vulnerable groups”.</p> <p>Referring to the current state of the economy, the Minister of Finance said that “Cyprus is listed as one of the best economies in the EU”, according to the European Commission and the IMF and added that the growth rate reached 2.5% in 2023 and is projected to rise to 2.9% in 2024, which is “one of the best growth rates in the EU”, when in the Union the growth rate rose to 0.4% in 2023.</p> <p>He also referred to the reduction of inflation to 3.9% in 2023 and 2.5% in 2024 as well as the estimate for a reduction in unemployment, from 6.1% in 2023 to 5.8% in 2024 and in the reduction of public debt to an estimated 70.6 % of GDP in 2024.</p> <p>“Based on the IMF estimate, it looks like we will reduce inflation and be close to 2% much sooner than we estimate,” he added.</p> <p>Also, Mr. Keravnos said that the current account balance transactions was in 2023 negative at 12.1% and will improve to 11.9% in 2024 and announced that for this matter a team has been set up with officials from the Ministry of Finance with the aim of “enriching our economic model in a way to deal with any possible problems exist in the current account”.</p> <p>The aim is to encourage our exports and export efforts”, he underlined.</p> <p>He also said that Cyprus is in 9th place among the countries with the highest minimum wage (€1,000) among the 27 EU countries, while the average monthly earnings of Cypriots are at €2,248 (2022) and the median earnings are at €1,838 (2022), which “compares favorably with the majority of European countries”.</p> <p>“This does not mean that it makes us rest, it does not mean that we have solved all our problems, on the contrary, we recognize the problems, the continuation of the precision, the great uncertainties created by the continuous wars in our region and the Ministry of Finance is working on continuous and permanent base to find ways to deal with all these difficulties, to strengthen mainly the middle class, our businesses, and to put a safety net for vulnerable groups”, he emphasized.</p> <p>“When we took over the government we had serious challenges and some weaknesses that we had to deal with and that were related to the consequences of the Russian-Ukrainian war that started in February 2022 with a lot of negative effects such as, among others, inflation, high interest rates and effects on the supply chain “, he underlined.</p> <p>He also referred to the sanctions imposed on Russia and Belarus, while in relation to the Recovery and Resilience Plan he said that there was then “a serious delay in the implementation of the 2nd and 3rd tranches, that we had to advance the proposals and milestones in a short period of time to let's not lose money from the EU”. that “it may have been drastically reduced on the banks' balance sheets, but it was carried over into the real economy with far too many negative effects”.</p> <p>He also said that there was also a threat from the EU in terms of the reduced VAT rate for the purchase of a 1st home that “we had to manage” but also in the implementation of the public service reform.</p> <p>The Minister of Finance also said that “it was found the need for a new enriched economic model, leading to the goals set by the Ministry of Finance”.</p> <p>Referring to the main objectives of the Ministry of Finance for the 1st year of government, Mr. Keravnos said that these were the preparation of the 1st State Budget, which would be characterized by fiscal responsibility and strengthening of the economy, dealing with the effects of the continuation of the Russian-Ukrainian war , improvement of the framework for the management of Non-Performing Grants (framework of sales) and creation of conditions of stability of the financial sector, improvement of the supervision and application of sanctions, reaching a mutually acceptable agreement with the European Commission for a new framework for the reduced rate of 5% VAT for the purchase or construction of a first home for the benefit of society and the economy, promotion of tax reform, as well as green taxation, promotion of measures to improve business access to financing, strengthening of the foreign investment framework and promotion of the necessary actions for the implementation of the Reform of Public Service.</p> <p>He also referred to the improvement of the management framework of Non-Serviced Grants (Foreclosures) and Protection Net for Vulnerable Groups, to the Installment Rent Scheme, and also to the tax reform, which was assigned to the Economic Research Center of the University of Cyprus to prepare proposals.</p > <p>“The new tax proposal must weigh the modern economic model of the economy and the evolutionary perspectives, e.g. key and new economic sectors, green economy/taxation, digitization,” he said, adding that the goals of the reform are to improve competitiveness within the framework of international and European standards, to reduce tax evasion and tax avoidance, for the new system to be transparent and simplified, without bureaucracy and encouraging to business and at the same time socially fair and to be a mechanism for improving equal distribution of income.</p> <p>He stated that the goals are also not to threaten social cohesion and to encourage investment activity and to be fiscally neutral and characterized by stability and added that the project is expected to be completed in the 1st half of 2025.</p> <p>Regarding with the green tax reform, Mr. Keravnos said that the national goal is to reduce emissions by 32% by 2030 and added that the acceleration of the green transition in businesses is being promoted and that taxes will be imposed on motor fuels, water, sewage , overnight stays and will be given “compensatory measures with the implementation of the green tax reform”.</p> <p>“Any collections from this levy/fee will go back to households, to businesses,” he stressed. transferred and no accusation that we are in a hurry or were rushed is legitimized,” he noted.</p> <p>He also referred to the improvement of business access to financing through the Establishment of an Equity Fund, the Establishment of a National Enterprise Development Organization and the Action Plan to Provide Incentives for the Promotion of Acquisitions and Mergers, as well as the further strengthening of foreign investment through the establishment of a framework for the control of foreign direct investments (Foreign Direct Investment – FDI) from third countries and in the regulation of the operation of the Cypriot Companies for the Administration of Collective Investment Organizations (OSE) and Related Matters (Fund Administrations).</p> <p >In relation to reforms carried out, in the context of the Recovery and Resilience Plan, Mr. Keravnos referred, among other things, to the establishment and operation of the Independent Anti-Corruption Authority, to the passing of legislation to facilitate Strategic Investments, to the unified Tax Management System (Tax for all ), completion of VAT services, digitization of RES project licensing procedures – One Stop Shop, strengthening of out-of-court protection for real estate buyers, completion of the construction of a dialysis unit in Paphos and installation of photovoltaic systems in 70+ schools in Larnaca (405 schools throughout Cyprus).</p> <p> < p>In relation to the ongoing objectives/actions of the Ministry of Finance, Mr. Keravnos said that, among other things, they concern the National Solidarity Fund, which concerns the compensation of the “haircut” and for which the electronic platform has been created, € 50 million per year in the Budget, instead of €25 million, electronic applications have been submitted by depositors and holders of securities affected by the consolidation of the two systemic banks (the deadline expires tomorrow and 4,000 applications have been submitted) and will be evaluated and determined of the beneficiaries in order to prepare a Partial Replenishment Plan.</p> <p>He also referred to the preparation of a Medium Term Fiscal Structural Plan, to the preparation of a 4-year Plan, in accordance with the new EU economic governance framework, until September 20, 2024, to dealing with the issue of Pension benefits of state officials and in the rationalization of the state payroll.</p> <p>Regarding the strengthening of the Sanctions Framework and Combating Money Laundering from Illegal Activities, Mr. Keravnos said that the recommendations of the experts for the establishment of the Single Sanctions Implementation Unit (EMEK) were presented at the beginning of 2024 and are evaluated by the Ministry of Finance and the Coordination Committee with the aim of establishing EMEK in the 4th quarter of 2024.</p> <p>Regarding the Ministry of Finance's contribution to European issues, the Ministry of Finance said that “we have actively supported efforts to reach a compromise on the European Commission's proposals for the revision of the economic governance framework”.</p> <p>Commenting on the fact that the issue of multiple pensions is being discussed at a time when the MPs do not contribute to social security, Mr. Keravnos said that “this should be answered by the MPs themselves and especially by those MPs who make a strict criticism, sometimes out of some framework”, while he also referred to “an effort made by the Ministry of Finance and I personally to submit a proposal, which is completely legally tested so that we do not get into counterproductive discussions and unconstitutional issues again and end once and for all”. </p> <p>Asked if there is an intention of the Government to regulate the issue like the issue of multiple pensions, Mr. Keravnos said that in the context of the consultations, which we hope will follow on this issue, I hope that all these issues will be touched upon”.</p> <p>When asked if we are heading for total tax reform, Mr. Keravnos answered in the negative, saying that we discussed the first deliverable in a public consultation and there are other deliverables that we will discuss in the next period and everything that can be integrated will be integrated” .</p> <p>Asked about countermeasures for green taxation, Mr Keravnos said they were now being processed after the public consultation was completed, adding that “we have time until the Autumn”.</p> <p >Asked to state what will be done with the measures to deal with the punctuality that expire next June, Mr. Keravnos said that the Ministry of Finance is monitoring the developments “and if there is a need to strengthen the middle class and vulnerable groups we will do it”, adding that fiscal surpluses are “also to implement social policy”.</p> <p>“Horizontal measures are something we want to end and avoid”, he concluded.</p> <p><noindex></p> <div class=Source: www.kathimerini.com.cy

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