The first tranche of 85 million will be disbursed on Friday. EUR[/B] from the EU's Recovery and Resilience Mechanism for Cyprus, European Commission technocrats in Cyprus for the first annual event on the Recovery and Resilience Plan announced to the Parliamentary Committee on Economic Affairs, as announced by European Commission technocrats in Cyprus for the first annual event on the Recovery and Resilience Plan.
A delegation from the European Commission's Directorate General for Economic Affairs (DG ECFIN) met with the Parliamentary Committee on Finance on Thursday and sent the message of the need for timely implementation of the legislation related to the Plan.
The discussion was dominated by the problem of non-performing loans (NPLs) and high energy prices, with Commission technocrats noting the need for further progress on NPLs, but also for meeting the Plan's milestones, while MPs noted the specificities of Cyprus after the 2013 financial crisis and called for more to be done to protect vulnerable groups.
The Director of the Recovery and Resilience Unit at the European Commission Maria Teresa Fabregas said that it is very important that Member States comply with the legal elements of the Plan and stressed the great role of Parliaments in adopting the relevant agreements so that the Member State can present a request for payment. He noted the important reforms that have been passed by the Cypriot Parliament in the areas of justice, energy, dealing with NPLs, while noting that there are other laws that need to be adopted regarding the labour market, education and tax planning
Need for further progress on NPAs
Director for Member States' Economies in DG ECFIN Luc Tholoniat said that it was confirmed that Cyprus will be put under an in-depth review in terms of macroeconomic balances. He also referred to the Commission's recommendation that the repeated suspensions of divestments create problems in terms of achieving the objective of further reducing NPLs. Referring to the huge progress that has been made on the issue of NPLs, he noted that despite their transfer to private companies, NPLs remain in the economy, affecting many companies and that they do not want there to be a new crisis.
Regarding the Rent versus Rent Plan presented by the Government to address NPLs, he said that this is being studied in its entirety At the same time, he sent the message of the need for timely implementation of the relevant legislation. Already, he added, the Commission is examining Cyprus' second payment request.
Adjustment of the Cyprus Plan to cover the losses
At the same time, the European technocrat said that there should be some revision of the Cyprus Plan, since due to Cyprus' very good economic performance, which was not expected, the country will lose about €90 million compared to the original plan. He added, however, that Cyprus would benefit with €50 million extra for energy sector actions from the REPower EU plan and could benefit from the use of loans under the programme.
Regarding support in the energy sector, he said the EU is trying to provide support and that is why the Stability and Growth Pact rules have been suspended to give countries time to take the necessary measures. She noted that measures taken by member states for the energy sector should be tight, temporary, encourage savings and take into account fiscal costs.
The need for measures to support society was stressed by MPs
For her part, the Chairperson of the Finance Committee, DIKO MP Christiana Erotokritou noted that the Finance Committee has recently passed legislation concerning the takeover of NEDs by management companies. However, she noted that although Cyprus is on the right track in terms of dealing with NPLs, the specificity of the Cypriot economy and the consequences of the 2013 haircut must be taken into account. She noted the need to have plans and mechanisms in place to protect small owners and avoid other problems in the future.
She also noted that ways should be found to support communities with the cost of energy bills and to keep businesses alive.
Referring to the divestment law that the President announced, she said that the aim was to protect small home and business owners for a limited period of time. Perhaps, she added, Parliament was a little generous with regard to businesses, but she said this was done in an effort to keep economic activity alive.
"We want to work with our partners to find other ways to support society," she said. On long-term strategic development, he said that "we want to do more in terms of vulnerable households and small businesses."
Chairman of the Interior Committee, AKEL MP Aristos Damianou said that the bill on strategic investments has been sent back to the Interior Ministry with comments from the committee so that it will come back to Parliament around the beginning of March.
DISY MP Savvia Orphanidou said that the ruling party supports all timeframes for the promotion of the draft legislation to bring about big changes in the country. At the same time, he appealed to the European Commission to approve the Rent for Rent Plan, which will also solve the problem of divestment.
EDEK MP Elias Mirianthous stressed the need for legislation that will help protect homeowners and small business owners, as at the moment there is not any protection shield.
Stavros Papadouris, MP of the Ecologists' Movement - Citizens' Co-operation, recalled the peculiarities of the Cypriot economy after 2013 and said that Cyprus is now in the stage of slow recovery. He stressed that a large proportion of NPLs have been transferred to the private sector, from the banks but are still in the economy and a new legal framework is expected as well as the one tranche rental programme to address NPLs.
Source: CNA
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