The Anastasiadis government has turned the Cyprus Investment Program into an industry for the sale of passports and food and drink for billions, according to the head of the Office of Economic Studies of the CoE. AKEL and candidate for Nicosia MP in the upcoming parliamentary elections, Haris Polykarpou.
In an interview with “F”, he notes that the investment program worked for the benefit of the few, created a bubble in rental and real estate prices, especially in Limassol and Nicosia, aggravating the housing problem. Regarding the vote against the state budget, he said that AKEL is consistent, as it voted against all the budgets of the Anastasiadis government.
Regarding state guarantees, Mr. Polykarpou said that the government withdrew the bill because it feared control and transparency. He also noted that in case the bill returns, it should ensure that the increase of liquidity should be through transparent and fair procedures. Asked if the economic model of Cyprus needs to be changed, he said that in recent years the country did not have an economic model, “we were building towers and selling sun and sea, and this is not a development strategy.” At the same time, he accuses the government of failing to provide solutions to the issue of rents, evictions and boosting business liquidity.
– Do you think, Mr. Polykarpou, that the abolition of the Cyprus Investment Plan will affect the economy?
First and foremost, we must note that the Anastasiadis government, through abuse and opacity, has turned the investment program into a passport-selling industry, a destination for billions and scandals of international proportions, with huge consequences for the country and its . When the country is dragged internationally, of course the consequences affect the economy and society.
But we must not forget that the consequences were enormous from the way the government handled the program from the beginning. It worked for the benefit of the few, created a bubble in rent and property prices, especially in Limassol and Nicosia, aggravating the housing problem for thousands of families and leaving behind an unruly housing structure.
– As we have seen, naturalizations were also the reason for the vote against the state budget by DIKO. Do you think that the responsibility for the budget vote falls on the government or the opposition?
Corruption and entanglement issues are part of AKEL's broader budget analysis. Because, at a time when AKEL has a total disagreement as to how the government is governed in the economy, it could not have a different position on the state budget, which is the dominant expression of this policy. Let me remind you that AKEL did this in all the previous budgets of the Anastasiadis – DISY government. Therefore, we are consistent. But even in these circumstances, we have sought to raise a number of issues with the government. Instead of responding, the government sought to reaffirm its existing policies by asking for a blank check under the guise of a pandemic. Even after the vote, instead of consensus, he chose to draw the argument of fear, in order to blackmail both the political parties and the society.
– About a year ago the government had submitted to the Parliament the bill on state guarantees, which, however, withdrew it due to disagreements with the opposition. The Minister of Finance asked for the positions of the parties in order to return the bill, what did AKEL suggest?
The government withdrew the bill because it feared control and transparency. If it decides to return, it must ensure that liquidity is enhanced through transparent and fair procedures. At the same time, there should be a specific breakdown of the amount of government guarantees by category of business, based on size, to ensure that even the smallest businesses have equal access to lending. And of course, even if state guarantees are a complementary tool to support SME liquidity, the state's obligation to directly support them should not be undermined.
The Government to assume its responsibilities
– Do you think that government measures to support workers and businesses affected by the coronavirus pandemic are satisfactory?
The direct support of workers and businesses was necessary and despite the fact that at the beginning of the pandemic the government had a very different philosophy, insisting on austerity policies, under the pressure of both the opposition and society was forced to take a different approach. Many of the support measures were adopted under pressure, but also with the cooperation of the opposition, as well as the social partners, with the government. In the process, however, the government's economic policy is characterized by regressions, indecision and mishandling. Even today, it has failed to address a number of issues, such as rents, evictions and the liquidity of small and medium-sized enterprises.
Many businesses are on the brink of disaster and many workers are at risk of unemployment. What measures should be taken to boost business liquidity?
Unfortunately, one-off business support schemes cover a small part of operating costs and do not actually cover rents, which are one of the main costs, leaving many businesses with liquidity problems. The government must realize the problem and assume its responsibilities, providing substantial support for the rent subsidy. The tax incentives he gave to reduce rents as a result have been deemed insufficient. The plans to raise liquidity from loans from European funds, which followed the government's fiasco over the issue of state guarantees to banks, were also insufficient. At the same time, the facility for payments of debts and obligations to the State should be extended, in order to facilitate the reactivation of those companies that were forced to suspend their operations.
– The economy has been greatly affected by COVID-19, what measures must be taken to return the country to growth rates?
First of all, it should be noted that it is not enough to have positive growth rates but at the same time the functioning of the economy and the wealth produced to be for the benefit of society and workers as a whole and not just for the benefit of a small privileged group. Because even before the pandemic we had positive growth rates but at the same time we had an increase in income inequality, the collapse of the infrastructure of the welfare state and the destruction of the natural environment. After all, the limits of the development model had been seen before the pandemic, with an economy that had no compass and relied on predators and temporary profit. These must be a thing of the past. Either we design the economic model on a solid basis with a focus on digital transformation and research, with fairer tax burden sharing, with respect for the environment, with basic principles of transparency and accountability, or we will be trapped in the past, having an economy without design where the few will spare the efforts of the many.
The protection of public wealth is non-negotiable
– AKEL is criticized because its economic policy differs from that implemented by other parties of the wider left in Europe. How do you respond to these criticisms?
I would not say that this is one of the main criticisms we receive, but if we look at the European economy for example, what is happening is that we have a common framework of capitalist mode of production, with freedom of movement of capital, people, goods, applied in countries with different economic characteristics and different conditions at national level. Therefore, it makes sense for each party to shape its action according to these conditions and particularities. We have spoken many times clearly about the nature and philosophy of economic policies in the European Union and internationally and we are just as clear in how we understand the needs of the Cypriot economy and in the proposals we submit.
– In recent months, there has been intense rumors about future cooperation with DIKO in the presidential elections, will AKEL change its philosophy to bring the two parties together?
AKEL has always been running in the presidential elections based on positions of authority. Therefore, we seek cooperation with those political forces with which we converge in these positions. Others are characterized by opportunism, aiming to rise to power. I remind you that it is Nikos Anastasiadis who a few days before the 2013 presidential election sent a letter to the employees of the semi-governmental organizations against which he opposed the privatization of the profitable semi-governmental organizations, a position which he changed as soon as he came to power. For AKEL, issues of principle, such as the protection of public wealth, are non-negotiable.
We built towers and sold sun and sea
– Tourism is the main blood donor of the Cypriot economy, however, due to the situation, both last summer and this year, it does not seem that many tourists will visit our country. Do you think, Mr. Polykarpou, that the economic model should be changed and other sectors of the economy should be given a boost?
In recent years we have not had an economic model, we have been building towers and selling sun and sea, and this is not a development strategy. After all, long before the pandemic we had talked about the need to redesign our development model, when the government and the Democratic Alarm told us that AKEL does not understand economy and must remain silent. Today, after the violent collapse, I wonder if there is anyone who continues to argue that we can continue in the same philosophy that we have followed for the last eight years.
– In relation to the sales, we see that the majority of the opposition's efforts end in a vacuum, due to the government's refusal. Why does AKEL insist on changing the legal framework for the sales, when it knows that the banking system may be affected, such as capital needs, etc.?
AKEL insists on the need for sustainable restructuring, so that households and small and medium-sized enterprises can manage the enormous burden of loans they face and at the same time protect society from massive divestitures. To achieve this, it is crucial that borrowers feel confident that the balance owed on the loan is the actual balance. No abusive clauses, illegal charges and a series of bad practices implemented by banks in the past.
This is what AKEL says, this is what the European Regulations say, this is what the European Commission says in official positions, this is confirmed by the recent court decision regarding the abusive clauses, the first after 2013. Everyone understands this, except the government. So if anyone is going to jeopardize financial stability, it is the government and its obsession to serve exclusively the interests of the banks to the detriment of society and borrowers.
