Press conference of the President of the Republic, Mr Nicos Anastasiades, on the first four months of his administration
The President of the Republic, Mr Nicos Anastasiades, gave today, at the Presidential Palace, a Press conference on the first four months of his administration.
In his initial statement President Anastasiades stressed the importance of this first Press conference and added that as of this day such Press conferences will be held on a regular basis, something which will serve both the purpose of briefing and rendering account on his part and of exercising control and criticism on the part of the Press.
The President of the Republic said: “Today’s account concerns the first few months since the assumption of office of the new Government. I feel the need to remind you that the first 45 days of our administration were fully spent on obviating the disorderly bankruptcy not only of the banking system but of the state itself”.
He also reminded that after the painful decision of 16 March banks remained closed between 15 and 28 March, as a result of the European Central Bank instructions, until an agreement was reached which would lead to the support programme for the Cypriot economy. The choices we had before us were either the collapse of the banking sector, which would entail the disorderly bankruptcy of the state, or the unwelcome decision of 25 March that averted this possibility, he added.
The President also said that, in his view, the second Eurogroup decision, compared to the first one, was much more painful.
What is important is that firstly we averted total collapse and secondly we avoided the suspension of payments, improving and completing the loan agreement, Mr Anastasiades said. “I’m not claiming that dangers have ceased to exist or that we have overcome the painful consequences. On the contrary, if we want to avoid the worst, we must consistently implement what has been agreed in order to succeed in our additional claims from our European partners”, he added.
On 19 April, only a few days after reaching an agreement on the loan agreement, we announced the first set of measures on the economy, the President said. “The first announcement concerned those of our fellow compatriots who were facing problems in meeting their loan obligations, a measure which is being implemented. A grace period of 60 days was granted during which those facing problems in meeting their loan obligations had the right to contact to banking institutions in order to make the necessary restructuring, without additional expenses.
For the same purpose the establishment of a Financial Ombudsman has been approved to whom debtors will submit complaints pertaining to their debt restructuring. The institution is expected to be established in September after the relevant bill will be voted by the House of Representatives.
As regards the reduction of interest rates, following consecutive consultations of the Government with the banks, a reduction of interest rates on deposits has been achieved which will lead to a progressive reduction of interest rates on loans as well.
The fourth relevant measure pertains to the protection of primary residence owners from the deprivation of their roof in case of forced sale. The said measure ‘Rent instead of attachment’ provides the possibility to Government bodies to purchase the residence at the value of the loan which will then be let to the debtor – low-income households – giving them the possibility of full repossession at the end of the agreed period.
It should be noted that in primary residence forced sale cases, we have achieved an amendment in the loan agreement by extending its realization until the end of 2016.
Another announcement was the establishment of a Court of Arbitration with a view to awarding compensations in an expeditious manner to the holders of capital securities or bank bonds. The relevant bill has been drafted and forwarded to the Law Service for technical processing.
I have to admit that the delay in the implementation of the measure is due to problems of legal nature and other problems which have been addressed, and I expect that the Court will be established by the end of September,” the President said.
As regards the measures on unemployment, President Anastasiades said: “Through the actions we have promoted, we have ensured: - The reappointment of hourly paid employees. - The reappointment of contract teachers. - The employment of the graduates from military academies.
Beyond this, we have redesigned and we implement co-financed programmes amounting to EUR 31 million.
- The institution of the stage is introduced for the first time in Cyprus for the purpose of unemployed university graduates to acquire work experience and specialized training. 2500 new scientists will be appointed in positions at the beginning of August. - The Plan for subsidizing employment with flexible arrangement is already being implemented. Up to this moment the employment of 465 unemployed is under way, and their number is expected to rise following the decision on the extended working hours of shops. - It should be noted that the through the Plan for the provision of incentives for employment in the tourism industry another 1257 have been employed.
The simplification of procedures and the speeding-up of the evaluation of applications for programmes implemented by the Ministry of Commerce as regards Youth Entrepreneurship and Small and Medium Enterprises aim towards this direction. Approximately 1000 young people will benefit from the Plan, which is expected to be completed by the beginning of September.
Another relevant measure is the agreement between the Government and the public universities to increase this year’s number of newcomers’ positions by 111 and, at the same time, offer another 237 positions for the transfer of students from other universities abroad.
Recently, the Council of Ministers has approved the implementation of the Plan concerning the allocation of state and forest land to unemployed who wish to practice farming as their occupation. The allocation of land will start on October, while intensive training is already in place.
At the same time, in order to preserve jobs in the vital field of livestock farming, subsidies amounting to EUR 3 million have already been paid.
Along the same lines is the Government’s decision for the VAT reduction from 18% to 15% on farming oil used for farming purposes as well as its use for transportation purposes.
With a view to encouraging employment we have provided an incentive for a tax deduction from taxable income of up to 25%”.
The President stressed that these measures contribute to the mitigation of the problem of unemployment; however unemployment can be effectively addressed only through the restarting of the economy and through growth.
A series of measures has been announced towards the direction of growth, he added, which are being implemented such as the reduction of the time needed to issue a Planning Permission which will not exceed one month for small-scale projects and three months for large-scale development projects, the increase of the building coefficients, especially for large-scale development projects, the immediate improvement and speeding-up of the procedures for issuing a Planning Permission, the review of the criteria with regard to the procedure of granting immigration permits to third country residents investing in Cyprus, the speeding-up of the procedures for advancing large-scale development projects, the granting of 100% tax deduction until 2016 for expenses incurred by the purchase of fixed assets relating to innovation, research, informatics and renewable energy sources and the extension until 2016 of increased tax deduction by 20% minimum for the purchase of other fixed assets.
Mr Anastasiades also referred to measures taken and incentives provided for boosting the tourism industry, such as the licensing of casino operation, granting of permits to joint tourism developments, such as condo hotels, through the amendment of relevant legislation, the provision of significant incentives for the encouragement of the construction of golf courses and other tourism infrastructure, the implementation of the open sky policy which renders Cyprus easily and cheaply accessible and agreements with airlines for connections with new destinations.
He also said that the establishment of the State Property Management Authority has been decided with a view to utilizing idle state property, the registration of which has already been completed.
At the same time, he noted, a bill on public-private sector partnerships has been drafted.
A relevant bill has been also drafted, the President said, which provides for a system of clearing for all outstanding debts between natural persons or legal entities and the state.
Regarding our claims from the European Union, the President of the Republic said that through his letter sent on 6 July as well as through the discussion that followed as a result, the Government has ensured EU’s increased contribution by 10% to co-financed projects, an increase from 50% to 85% in the percentage of EU funding of Rural Development Programmes for 2013 and the inclusion of a decision on Cyprus in the recent European Council Conclusion which calls upon the European Commission and the Parliament to increase funds allocated to Cyprus as well as the percentage of EU participation in co-financed programmes. Along the same lines, he added, is the agreement we have reached with the European Investment Bank for the financing of new development projects, while at the same time we continue consultations with the Bank for the creation of a guaranteeing mechanism for small and medium size enterprises as well as for the provision of technical assistance for the preparation of infrastructure projects.
With regard to the problems of the banking sector, Mr Anastasiades said his contacts with the European Central Bank will continue with the aim of addressing the practical difficulties in the banking sector. We are determined to continue claiming the maximum possible assistance from our European partners, he stressed.
On the Government’s fiscal consolidation goals, the President of the Republic said that these were better targeted and that the Government tried to save on resources with the minimum social cost. He mentioned, inter alia, the reduction of the President’s pay by 25%, and of the pay of Ministers and other high-ranking officials appointed by 20%, the reevaluation of Public Service allowances ensuring annual savings amounting to EUR 31 million and savings exceeding EUR 1.5 million of Ministries from renting building facilities.
Referring to the state’s broader benefits policy, he said that this is being reviewed with the aim of benefits to be granted to those really in need and added that the new system will be implemented during the first months of 2014. Within this framework the right for unemployment or social allowance to those who reject twice the offer by the Public Employment Service for work that fits their qualifications has been terminated, and the Government has gone ahead with a modification of the benefits granted to asylum seekers, so that Cyprus will stop being an immigration haven. We have also discontinued, he said, any subsidy for foreigners in case of rejecting an employment offer in sectors and periods that employment is allowed, and we have reviewed the criteria for the provision of free medical care.
He also said that in the four months since he assumed office, the Government has managed to make significant steps in reducing the cost of electricity. In order to reduce the cost of electricity even further, Mr Anastasiades said that a decision was taken to subsidize up to 50% of the cost for the installation of photovoltaic systems in residential units, based on economic and social criteria. For 2013, it is estimated that 2,000-3,000 households will be benefited, he said.
He also said that emphasis has been placed on green growth, in the framework of the Government’s energy policy, which will contribute to the enhancement of competitiveness and further development of business activities.
In this respect, President Anastasiades said that a Plan is being implemented aiming at the production of electricity with the use of photovoltaic systems in commercial and industrial units. He added that the procedures for the immediate implementation of the projects for the installation of photovoltaic parks were accelerated. Also, an incentive for a 5% increase of the set building coefficient is being provided in case overall energy needs are being covered by renewable energy sources, he said, adding that, within the framework of the Environmental Management System, the Government goes ahead with the gradual conversion of military facilities to “green military camps”.
The President stressed that through the implementation of these Plans, on the one hand the Government fulfills the commitments it has undertaken towards the EU, and on the other hand, hundreds of jobs are being created and, with the conclusion of the programme in four years, EUR 40 million will be saved.
Referring to the National Policy for the Management of Cyprus’ natural wealth, President Anastasiades stressed that this will be crucial to the efforts for dealing with the economic crisis. He pointed out that in this respect the Government has already moved forward with important decisions and steps, which include: · The preparation of the road map for the exploitation of the country’s hydrocarbon reserves, including all the important stages of exploration, development, production and commercial exploitation. · The decision for the construction of the Cyprus Liquefied Natural Gas (LNG) Plant, for which a Memorandum of Understanding has been signed with Noble Energy and Delek. In addition, interest for participation in the infrastructure has also been demonstrated by Total, ENI/Kogas and other important investors from third countries. · The expedition, through talks with the licensees for exploration and production in Cyprus’ Exclusive Economic Zone, of the appraisal drilling by Noble and the exploration programmes of Total and ENI/Kogas. · The establishment of a Council for Energy Strategy for purposes of monitoring and preparation of recommendations, to ensure a well-structured energy policy. · Reaching of the final stage in the process of deciding for the interim solution for the import of natural gas to be used by the Cyprus Electricity Authority.
Furthermore, President Anastasiades said that the recent decision by Israel to export 40% of the country’s natural gas reserves is expected to increase even further the interest for investments in Cyprus’ infrastructure. Through the Government’s policy to strengthen relations with Israel, he stressed, Cyprus will hopefully be able to meet Europe’s expectations of becoming the region’s energy hub.
The President said that in the coming days the Government work concerning the modernization and restructuring of the State and its institutions, combating corruption and securing meritocracy and good administration will be presented.
“I have never claimed that we could overcome the current economic crisis in a few months. There are no magic solutions and for this reason time is absolutely necessary”, Mr Anastasiades said, adding that his Government is determined, though hard work to deal with the current tragic economic crisis. “I wish to assure you that, despite the difficulties, we will continue to work hard with the same pace, with sincerity and determination, we will do everything possible to ensure the stability of the banking sector, something which will secure the necessary liquidity for the market thus encouraging private initiative and investments”, the President said. In this way we will achieve recovery of the economy through growth, he added.
Finally he said that in the next few days a mission from the Troika will arrive to Cyprus to evaluate the implementation of the programme. “I wish to express my optimism that we will achieve our goals. This optimism is based on our tireless efforts as well as the responsibility of the social partners, the political forces and the Parliament. At the same time it is based on the perseverance and the good sense shown by society at large, especially those who have suffered the most painful consequences of the economic crisis,” he concluded.