Cyprus Minister of Finance Harris Georgiades said he is optimistic over Cyprus’ growth prospects, stressing however the need to safeguard the conditions for sustainable growth, consistency and discipline.
Speaking in event held in Limassol yesterday, Georgiades refereed to Cyprus’ recovery following the loss of confidence to the Cypriot economy, the financial meltdown of 2013 and the bailouts, noting that “if we want this positive outlook to continue, if we want to speak about long-term growth we need to learn from the mistakes of the past and assume a clear collective commitment that we will not repeat these mistakes.”
The past growth, he said, was no miracle, it was a bubble, a false situation that crumbled in a painful way, causing huge cost to many fellow citizens.
Georgiades said he is optimistic because today’s growth is not based on false factors, adding instead of operating on deficits, the state has surpluses.
He also said that it would be easy for the government and his Ministry to spend these surpluses satisfying needs that always exist, “but this would lead the country to the same difficult position of the past with no fiscal safety net.”
On the banking sector, Georgiades said the banks, despite difficulties, have been consolidated to a large extend, interest rates have been reduced and the banks can provide credit with more strict loan origination processes, focusing on the borrower’s capacity to repay its debts.
He also pointed out that incentives allowed the country’s productive forces, fostering growth, measures helped expansion of the tourist sector, while changes in legislation boosting Cyprus’ competitiveness helped the services sector to grow.
“We need to open up to new fields, investing in academic education and research and innovation”, he added, recalling that Cyprus secured EU funding for six centres of excellence and research and development.