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12° Nicosia,
04 February, 2023
 

Petrides: 'We will not impose new fuel taxes'

According to the Minister of Finance, the green transition should be revised in order to mitigate the consequences and to look at things realistically

Panayiotis Rougalas

Finance Minister Constantinos Petrides stated that no new fuel taxes will be imposed, an obligation that should be met by the end of the year.

The Finance Minister stated at the 18th annual Economist Conference, which was sponsored by Kathimerini, that the strict implementation of the green transition should be partially revised in order to mitigate the economic consequences. "We have to be realistic; this is not the time for new fuel taxes, and we will not impose them," he said.

"During an election season, it would be very easy for the government to give subsidies that would result in a 3-4 percent deficit, a threshold that is already allowed" -Petrides

Petridis explained at the Economist conference that four factors have contributed to inflationary trends. The first factor, he claims, is the result of years of expansionary monetary policy with zero and negative interest rates. The second is the Covid -19 pandemic, because all countries, including Cyprus, were called upon to avert its consequences and had to "pour" money into the market to keep the economy open.  The third factor, according to the MoF, is the consequences of Russia's war in Ukraine, and the fourth is the green transition. "I don't believe inflation will persist, but energy prices will remain high due to the two-thirds price of energy," the MPOIK said. Petridis went on to say that, in the context of the pandemic, Cyprus has spent 3 billion euros to support the economy, and that the state has already spent 360-370 million euros to address the energy and fuel shortages in 2022. "We will have to make a lot of investments to wean ourselves off of fossil fuels; we have already moved to invest 150 million euros for this purpose, up from 7 million euros previously," he said.

Doling out subsidies is an easy solution

Petrides went on to say that the economy is tough, which is why states should not act piecemeal, and that spending should always be sustainable. "During an election season, it would be very easy for the government to give subsidies that would result in a 3-4 percent deficit, a threshold that is already allowed, and we would have no problem from the institutions; we support where it is needed, and we hope that the new government will manage public finances wisely."

[This article was translated from its Greek original]

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Cyprus  |  economy  |  economist

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