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- Ελληνικά
The Cyprus Economy and Competitiveness Council (CECC), within the framework of the responsibilities assigned to it by the Council of Ministers, has during its term of office made a series of policy recommendations, with specific measures and proposals to the Cypriot government to address issues related to the competitiveness of the Cypriot economy. The Council, realising the importance of some of the issues, held a Press Conference today to present specific Policy Recommendations it has made, as well as to present the survey to identify potential risks to the Cyprus economy.
I. Council Recommendations to improve the competitiveness of the agricultural sector
In October 2020, the Council proceeded to identify the main weaknesses of the agricultural sector and make recommendations to improve its competitiveness. In particular, the Council's recommendations addressed four priority areas as follows:
- Exploiting knowledge and technology
- Study and adopt good practices of other countries in the sector.
- Use of new technology in the production and marketing of products to reduce operating costs (mainly production costs) and the impact of climate change on production efficiency.
- Investing in R&D to optimise productivity and improve the competitiveness of the sector.
- Promote the involvement of academic institutions and research centres to exploit the expertise of scientific staff as well as existing know-how from all stakeholders in the sector.
- Focus on niche products, such as organic and local products, while improving their quality.
- Registering more local products as PDO and PGI (Protected Geographical Indication).
- The collective effort of the public and private sectors to promote and advertise them on international markets and to local tourism businesses (branding) is extremely important. [AT THE SAME TIME, RAISING THE AWARENESS OF LOCAL CONSUMERS TO BUY CYPRIOT FOOD, TAKING INTO ACCOUNT THE CHAIN OF POSITIVE EFFECTS.
- Development and operation of an electronic platform for handling the purchase and sale of agricultural products through a simplified form of price negotiation or auction.
- For the operation of the system it is very important to establish a system of standardisation, categorisation and certification of products on the basis of characteristics and quality.
- Operation of warehouses with appropriate storage and distribution procedures.
- Allowing the use of unused arable land through electronic auctions or other leasing and incentive mechanisms. This information should be recorded, archived and systematically updated for more effective management, possibly with the contribution of local authorities.
- Incentives for unemployed people to work in the agricultural sector, together with the promotion of measures to attract and settle young people in mountainous and other agricultural areas.
- Design and promote appropriate policy measures for the gradual transfer of farms from older to young professional producers.
- Irrigation with surplus treated water from sewage treatment plants.
- Cooperation between producer groups for joint purchase and use of machinery.
II. Council recommendations for green transition
Green growth is one of the most important objectives of modern societies. The benefits resulting from the green transition are not limited to the environment, but extend to both the economic and social spheres. The Council has made eight specific recommendations, which it considers crucial to Cyprus' long-term objectives and commitments in relation to the green transition, as well as supporting policies for a holistic approach, which will, inter alia, contribute to reducing energy costs in the long term.
- Establishment of a State Ministry for Climate, Environment and Green Sustainability
- Establishment of a State Ministry responsible for green growth policy.
- Rapid decision-making and implementation of decisions on restructuring and transfer of existing ministerial responsibilities for green development issues.
- Drawing up a comprehensive long-term energy strategy up to 2050.
- Upgrading the electricity transmission network and transforming it into a smart and flexible grid.
- Rapid completion of electricity market liberalisation.
- Promote the installation of photovoltaic systems through information campaigns and implement regulatory provisions concerning new buildings and their energy efficiency.
- Adoption of the harmonizing bill for the transposition of the European Renewable Energy Directive into national law, incorporating provisions for the simplification and acceleration of the licensing procedures for renewable energy projects and energy storage systems and their interconnection networks.
- Providing incentives for households and businesses to improve their energy efficiency.
- Creation of a digital One Stop Shop for immediate examination and licensing of applications for RES and energy renovation of buildings
- Design of auctions for renewable energy production.
- Electricity Interconnection with neighbouring countries
- Interconnection of the electricity grid with neighbouring countries through a scheme that meets the necessary requirements.
- Exploitation of Cyprus' natural gas resources
- Promotion of the exploitation of Cyprus' natural gas fields.
- Ensure support from the European Union (EU) for the implementation of the EastMed gas pipeline.
- Supporting policies
- Ensure the smooth implementation of the digital transformation.
- Promote working from home/teleworking.
III. Council recommendations for improving business competitiveness through mergers and acquisitions
The Council's position is that further emphasis should be placed on encouraging mergers and acquisitions, thus aiming to create larger firms that can exploit economies of scale and become more productive and competitive, attract skilled staff and become more outward-looking, but also more resilient. In this context, the Council had submitted a proposal in January 2023 with the following recommendations:
- Create an Integrated Support Framework and Culture Change regarding the promotion of mergers and acquisitions by setting up an Office to provide information and guidance to companies wishing to consider a merger or acquisition, as well as organising information events to provide information and showcase successful examples.
- Modernisation of the legal framework for reorganisations, mergers and acquisitions of companies, as well as the procedures that will be relevant to the modernised framework.
- Tax reductions and elimination of burdens.
- Application of tax incentives also in the agricultural sector and subsidies for agricultural equipment and machinery.
- Provision of advisory services for companies intending to merge.
- Facilitating access to finance.
IV. Council recommendations for strengthening pension income in Cyprus
Ensuring a decent living for citizens and protecting pensioners from poverty are priority issues for any modern state. For this reason, the issue of retirement is an important part of the long-term socio-economic policy of all states, since it is related to the decent living of the citizens of the society as a whole. Having considered this issue, the Council recommends that the Government take the necessary measures and actions to strengthen the second (Occupational Pension Funds) and third pillar (Private Pension Schemes) of the pension system, which in combination with the first pillar (Social Security Fund) will be able to offer higher pensions and thus a decent living during the pensionable period to all citizens.
- Second Pillar - Occupational Pension Funds (OPFs):
- Automatic enrolment of all private sector workers in a multi-employer Occupational Pension Fund or an employer-provided Occupational Pension Fund.
- Small contribution by the employer to the Occupational Pension Fund.
- Contribution by the State in cases where the amount of the employee's income is not taxed (low-paid workers).
- Right to transfer employees' pension benefits from one occupational pension fund to another (transferability).
- Withdrawal of money upon reaching the retirement age and reduction of the borrowing rate from the Occupational Pension Funds.
- Method of collecting the amount from the Occupational Pension Funds: collection of the amount at regular intervals or collection of part of the amount at retirement and the remaining amount at a later stage.
- Consideration to provide the same financial incentives/tax deductions offered to occupational pension funds/life insurance.
- Strengthen supervisory authorities: Proper, effective and rigorous supervision of stakeholders is an integral part of the effort to improve our country's pension system, as under no circumstances should any mismanagement that would jeopardize citizens' pensions and savings be allowed.
- Financial education: Financial education equips people with the knowledge and skills to make rational decisions on how best to manage money and assets. Financial illiteracy is a real problem in Cyprus and special emphasis should be placed on efforts to enhance financial literacy.
V. Council Recommendations on tackling under-fertility
The phenomenon of under-fertility and the ageing of the population are critical issues that Europe and Cyprus should address today, as they have serious economic and social implications. The Council's position is that the government should proceed with a comprehensive plan to improve the quality of life of families with children by adopting measures focusing on "Family Policy".
- Family-friendly policies
- Implement policies that support families, such as paid (or subsidised) parental leave, flexible working hours, affordable childcare and tax credits or subsidies for families with children.
- Offer financial incentives for having children, such as 'bonuses' with direct funding to households, tax relief or reduced interest rates in the form of subsidised loans for families with children.
- Parents should be able to receive a monthly allowance per child for education costs, while low-income families should be able to receive additional subsidies.
- Invest in public housing and infrastructure, such as schools and playgrounds, to create a family-friendly environment.
- Improve access to health care and reproductive health services.
- Addressing issues that may discourage couples from having children, such as high housing costs, job insecurity and lack of affordable childcare.
- Offering policies such as affordable childcare and parental leave, and supporting their career advancement through training programmes.
- Tax incentives for employers
- Providing tax incentives to employers who offer family-friendly policies.
- Extend paid parental leave to new parents so that they can take time off work to care for their newborn children.
- Childcare services
- Parents can receive a more favourable rate for childcare services based on their income, with the highest subsidy rate covering up to 50% of the cost.
VI. Council Recommendations on Affordable Housing
Affordable housing is one of the most serious socio-economic issues facing Cypriot society today, and the problem is growing. Despite all the measures that have been taken in recent years, EPAAC believes that further measures are needed to support citizens, especially young people and young couples. In this context, the Cyprus Economy and Competitiveness Council lists the best practices of other countries that could be implemented in our country, as well as measures that have been proposed/announced by other bodies and/or the government and which it believes will help to address the problem.
- Creation of a single body for housing policy
- Immediate establishment of a single body for the formulation of housing policy.
- Better service and information for citizens.
- Proper management and allocation of the budget.
- Cooperation between the private sector and the State for the utilisation of State land in order to provide affordable housing.
- Increasing the capitalisation of the Cyprus Land Development Organisation.
- Cooperation between COAG and ETEK for low cost and reliable quality projects.
- Contribution to the Housing Authority fund.
- Creation of buildings.
- Provision of tax incentives.
- Mortgage interest rate subsidies.
- Need for regional planning.
- Provide incentives for buying/renting housing in areas where residents have different socio-economic backgrounds.
- Improvement of the road network and public transport.
- Promote work from home/work from home.
VII. Conducting a Council survey on potential risks to the Cyprus economy
The Council, realising the importance of early identification and assessment of risks to the economy and wishing to contribute to the Government's efforts in this area, proceeded to develop its own tool for monitoring and assessing potential risks/risks to the Cyprus economy.
The aim of the survey is to identify and prioritise the most important risks through the completion of a questionnaire by selected members of the private and wider public sector from various sectors of the economy, as well as the academic community. Through the questionnaire, an assessment of economic risks is made based on the likelihood of their occurrence, the severity of their consequences should they occur and the time period over which they are expected to occur. The tool is adapted to the specificities of Cyprus and results in risk indices (combined probability and severity of consequences) with values that will be comparable on a continuous basis.
According to the results of the survey conducted in 2023, the highest risk index (combined probability and severity of consequences - risk index) is the risk "Cyber attacks with problems in the operation of critical infrastructure" with the index reaching 85%. This is followed by "Mass influx of migrants" with a risk index of 82% and the risk "Deterioration of climatic conditions" with a risk index of 82%.
Detailed results of the survey can be found on the website of the Cyprus Council of Economy and Competitiveness.
For the presentation of the Council of Economy and Competitiveness click here.
(GG/NYAN)
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