NICOSIA – The framework for the 2014 budget will be presented to the Cabinet when it next convenes, Finance Minister Harris Georgiades has said.
Speaking to the press after an event organised by the Institute of Certified Public Accountants of Cyprus, in Nicosia, Wednesday, Georgiades also said that the government is not looking to further reducing the public payroll but rather to further reducing expenditure.
“There is a great room for savings”, he stressed, referring to the content of annual reports issued by the Auditor General of the Republic.
At the same time, replying to questions regarding ongoing processes in the Bank of Cyprus and capital restrictions in the country, he noted that it is urgent that any pending matters regarding the island’s largest bank, have to be resolved “urgently”, highlighting the fact that if the processes regarding the bank are not completed it will not be possible to lift the capital restrictions in place.
Georgiades clarified that the government believes that a continuous increase in taxation is not a structural measure and particularly in a period of recession only results in stifling economic activity.
The President of the Republic, he said, has made it clear that we will ensure on the one hand the stability of taxation, which is necessary in order to help restore a more positive investor climate whilst at the same time proceeding with further fiscal measures.
Replying to another question, Georgiades said the ministry will be ready to present a budget framework for the next year and the next three years at the next Cabinet meeting.
He explained that the framework will define the level of expenditure for the government as a whole and for each ministry separately. It is up to each ministry, he said, to evaluate its expenditure and to ensure that every euro spent will be put to good use.
Asked to elaborate further on the government’s position for restarting the economy, the Finance Minister said that despite the difficult decisions imposed Cyprus’ banking system has behaved in an unexpected manner for some people.
The government believes that this very positive outcome needs to be taken advantage off by concluding as soon as possible the processes concerning the Bank of Cyprus.
The aim is for the bank to come out of the resolution status it currently finds itself in order for our banking system to become once more stable and to function under normal circumstances. This, he added, is necessary for the stabilization of our economy as a whole.
Cyprus has agreed with international lenders on €10 billion rescue package, under which, it must close down the Popular Bank, and impose painful losses on deposits of more than €100,000 held at Bank of Cyprus. Both institutions were heavily exposed to the Greek debt.