Minister warns House over crucial EU money

Cypriot Finance Minister Constantinos Petrides is calling on Parliament to approve structural reforms that come as a condition to the disbursement of over €1 billion from the EU’s Recovery and Resilience Fund.

The National Recovery and Resilience Plan, the blueprint aiming to absorb over €1 billion from the EU’s Recovery and Resilience Fund (Next Generation EU), will be submitted to the Cabinet next week for approval, Petrides said on Thursday following a meeting at ruling conservative party DISY.

After meeting with DISY deputy president and former finance minister Harris Georgiades, Petrides described the National Recovery and Resilience Plan as “the main weapon for the economic counteroffensive for the next five to six years, shaping the economy’s growth model.”

Asked on the conditions for successful fund disbursements, Petrides said the EU has set out two provisions, the approval of the National Plan and compliance with the structural reforms included in the European Commission’s country-specific recommendations.

On the first condition, Petrides said so far comments made by the European Commission on Cyprus’ national plan “are more than positive concerning the ambitious and holistic plan that complies with the Commission’s requirements over a new growth model that concerns the next generation, as (the EU fund) title implies.”

On the second condition, the structural reforms, Petrides said the implementation of these reforms that accompany the Fund as conditions “is up to us.”

“Money and funds alone cannot create a new growth model,” the minister said, noting that a new economic model is primarily created by structural reforms and that is why the EU Commission insisted that all should be done as a package.

Bills still pending, elections end of May

Petrides noted that the government has promoted the majority of the required structural reforms, with still pending in the House regarding local government, the civil service, performance evaluations, as well as critical Justice reform.

“How can we speak of a new growth model in a country where contract enforcement takes years and years, due to the lack of justice reform,” Petrides wondered.

The minister also stressed “if we really care for the future of the country, these reforms, which have no particular political and ideological color, should at last be approved with consensus.”

Parliament is currently in recess ahead of parliamentary elections set for May 30, with political pundits pointing to a number of issues including campaign fatigue, failure to pass bills quickly, and economic challenges due to pandemic restrictions and lockdowns.

Petrides said the government will table the new parliament a bill for the deferral of VAT payments for March, June and July 2021, in a bit to further boost the liquidity of businesses that face challenges due to the continuing COVID pandemic and the restrictions imposed by the government.