It is with great pleasure that I attend today the annual General Assembly of the Federation of Employers and Industrialists. To the CBI, which over time, as the main representative of the country's productive forces, has been a reliable and valuable partner for the Government. A Federation which contributes both to economic progress, but much more - and we have taken your positions from the first day we took office - and to the promotion of innovative proposals concerning entrepreneurship. And this is something I know all too well, as I have had the opportunity, in my previous capacities, to work closely and constructively on many occasions with the leadership and members of the OEB and to achieve common goals.
I want to assure you, as the new Government of the country, that we are here to work closely together and find effective solutions to the challenges facing our country, for example those arising from Russia's ongoing invasion of Ukraine: increased production costs, disruptions in supply chains, energy costs, but also labour market challenges which, no doubt, among many other impacts, are significant obstacles to your business activities, and we are aware of these challenges.
To the challenges that I have just mentioned - I come here from a meeting that we had at the President's Office with the relevant ministers and with the supervisory authorities - our country has to deal with an additional one, which for me personally is a gamble and a top priority and I refer to the need to preserve the name of Cyprus as a reliable business and financial centre, especially after the recent sanctions imposed by the United States and the United Kingdom on Cypriot businessmen. I want to assure you in the strongest possible terms from this platform that we are taking all necessary actions from the very first moment as a Government, always in cooperation with the supervisory bodies and the American and British authorities, to fully safeguard the name of our country. All of us must approach this issue with absolute seriousness and see it as an opportunity to avoid any shadow or doubt about doing business in our country. This is the clear intention of the Government and I am sure you share the same view. Cyprus cannot afford not to rise to the occasion and suffer another blow to its image.
As the new administration of the country, we look forward to your contribution and cooperation in our efforts to effectively address the challenges and create a resilient economy. I have been and remain a strong advocate, a believer in sustained collaboration between the public and private sectors, as it has been proven over time that through collective effort, when many views are heard freely and when all available experience and expertise is utilized, synergies are created that lead to the best results.
I want you to feel free, whenever you feel that we need to be informed of your views and approaches, to know that we are at your disposal. In many areas that we have to manage you clearly know better, and in this context I look forward to our continued, daily cooperation, and in this context I look forward, whenever you deem it necessary, to the appropriate criticism and our appropriate response. If the country moves forward, if we achieve our own goals, I am sure it will also be your success. I am sure that there will be progress in your activities and that will be our success as well.
So, today, addressing the General Assembly of the OEB for the first time in my new institutional role, I want to assure you that as the new governance of the country we will work on the basis of this new approach. The approach of continuous cooperation. I do not hide from you that the burden I feel is great and the responsibility enormous, which is why the work will have to be collective and through united cooperation, and certainly beneficial for our people and our country, bold breakthroughs and reforms to achieve our common goals and lead our country together into the new era.
We live in an ever-changing world, with the geopolitical environment constantly changing, facing, among other things, the challenges of digitisation, emerging technologies, climate change and an ageing population. Challenges that inevitably affect business activities. Particularly with regard to the ever accelerating developments in the dual transition, digital and green, we need to ensure that both the State and Cypriot businesses transform and respond successfully to these new realities.
Our governance programme, our Contract with the Cypriot people, which we intend to follow faithfully, through new methods of coordination and monitoring of its implementation, aims precisely at enhancing the competitiveness of the Cypriot economy, based on a broader vision for a new and modern economic growth model. In this context, we also aim to create the necessary conditions for the growth and expansion of Cypriot businesses, to increase trade and employment and to attract more quality investments that will create high-paying jobs for the New Generation of our country that is facing serious challenges.
The new vision for the economy and society will be implemented through the Long-Term Strategy for the Sustainable Development of Cyprus "Vision 2035".
The new vision for the economy and society will be implemented through the Long-Term Strategy for the Sustainable Development of Cyprus "Vision 2035". The aim is to broaden the productive base of the economy by transitioning existing sectors to more dynamic forms of development and promoting new productive sectors, such as technology, research, which will create new and quality jobs. A strategy which is fully in line with the National Recovery and Resilience Plan, which is of a medium-term nature and is expected to be completed in 2026. A plan from which I look forward, with the cooperation of Parliament, to not a single euro being lost. In this direction, we will work to implement important reforms decided by the previous Government, such as the Civil Service, the judiciary and local government, aiming, among other things, to improve the business environment. Within our comprehensive plan, and with European subsidies where available, we will support businesses for digital and green investments, significant investments in e-government and boost subsidies for research and innovation. One of the important reforms we will also promote is the establishment of the National Development Agency, so that Cypriot businesses can, like businesses in other countries, enjoy alternative financing and opportunities to use a range of financial instruments.
Our aim is to expand the sources of finance for robust and/or start-up, high-growth businesses by creating this Agency, which will provide seed capital, state guarantees and other forms of financing. A particularly timely measure, given the current economic environment of high interest rates.
In particular, with regard to justice reform, we will press ahead with its implementation. It is urgent to put it into practice, so that the legal world, but above all citizens and businesses, gradually become aware of the substantial change, especially in the time it takes to hear new cases. This is a national gamble that will strengthen the rule of law, the prevention of offences and the application of justice. The long period of adjudication of cases and the long time needed to deliver justice, in addition to the disproportionate cost to the state, is in fact a denial of justice.
Through the policies we will promote, we also aim to create a complete Digital State that will offer quality services to citizens, as well as to businesses, for all their activities.
Through the policies we will promote, we also aim to create a complete Digital State that will offer quality services to citizens, as well as to businesses, for all their activities. At the same time, a cultural change in the public sector is a prerequisite, which will act as a catalyst for the digital transformation of our entire economy and, by extension, facilitate the development of innovative digital platforms and services.
It is now accepted by all productive forces in the country that our tax system needs modernization and simplification.
It is now accepted by all productive forces in the country that our tax system needs modernization and simplification. One of the first decisions we have taken is the modernization of the tax system with the input of experts, having as main pillars to increase the competitiveness of Cyprus' tax model, reduce the administrative burden for taxpaying citizens and businesses and, at the same time, provide a fairer redistribution of the tax burden while maintaining fiscal neutrality. At the same time, the aim is to align our tax policies with the objectives of the European Green Deal, in the context of the promoted green tax reform.
And I am sure you understand that I could not fail to mention the green transition, and the need to implement the targets set by the EU to reduce greenhouse gas emissions and achieve climate neutrality by 2050. But always with support for our businesses, so that this transition is as smooth as possible, while creating opportunities for growth.
Another important priority is to strengthen the extroversion of our country, attracting foreign companies and promoting our interconnection with foreign ecosystems, taking advantage of the dynamics of the digital economy. In this way we will encourage extroversion and partnerships and synergies to achieve economies of scale. Recognizing the importance of promotional activities in the success of our products in foreign markets, we aim to increase the visibility of Cypriot products and enhance the image of our country through public diplomacy, utilizing the Strategic Economic Diplomacy and the diplomatic missions of the Republic of Cyprus abroad. I am well aware that this is an issue of particular concern to you and one of our first actions is to provide incentives and subsidies, through well-designed programmes, to upgrade the skills of human resources.
The Governance Programme has a five-year horizon and we have concrete programming that will lead to improving the quality of life for all citizens and businesses.
I want to note that we have received a healthy economy, characterised by fiscal discipline, a stable financial system and a series of structural reforms. We will continue on the same path and build on what has already been achieved, avoiding parochialism and preserving fiscal discipline. Our aim is to improve social cohesion and growth. With a fiscal policy that is fully in line with that of the EU and especially the euro area, where strict fiscal rules apply. With a stable financial system, a necessary parameter for a healthy and strong economy that will allow, among other things, a meaningful and targeted social policy for our vulnerable compatriots in need of assistance.
I want to reiterate that a crucial tool for the economy is also the continuation of structural reforms and the full absorption of European funds for the green and digital transition.
The effective implementation of what I have mentioned above will lead to the strengthening of the competitiveness and extroversion of Cypriot businesses and will create an even more attractive environment for domestic and foreign investment, enhancing the growth potential of our country by creating quality jobs for the New Generation of our country.
Of course, in the context of the current, ever-changing political and economic environment, we are ready, should such a need arise, to adjust our economic policies in order to ensure the growth prospects of the economy.
And we must be ready in any case to make adjustments. We should also look at the important reforms that have taken place in our country, we should constantly evaluate them without questioning the philosophies, whether it concerns the GESY or the EEE, but we should constantly evaluate them in order to take corrective measures where necessary, without touching their philosophy.
I conclude by saying that an important parameter, apart from the development of a healthy economy, is to enhance the welfare of citizens and to support, where necessary always in a targeted and not horizontal way, the incomes of workers and pensioners. In this context, in view of the rising levels of inflation we are witnessing, our aim is to provide targeted financial support to vulnerable groups, while maintaining fiscal discipline. Only recently we decided to extend certain horizontal measures, such as subsidies for electricity consumption and reduced rates of excise duty on motor and heating fuels, for a limited period of time. This measure is horizontal in this particular case because it affects the entire population of Cyprus. Measures that will allow the mitigation of the consequences of increased energy costs, both for businesses and citizens.
An important parameter for the development of our country and our number one priority is the resolution of the Cyprus problem, the liberation and reunification of our country, always on the basis of the agreed framework. From the first day in office we have been working towards a more active role on the part of the EU because we believe that the EU can offer all the parties involved, all those involved in the Cyprus problem, those incentives, those benefits, thus leading, through the resolution of the Cyprus problem, to a mutually acceptable state of affairs.
I know very well the difficulties, I know very well the positions of the other side, but for us in no way can the present state of affairs be the solution to the Cyprus problem, it cannot be the future of Cyprus and despite the difficulties, despite the problems, we are moving on the basis of a specific plan, and we hope that immediately after the elections in Turkey there will be such developments, data that will allow us to resume the dialogue from where it was interrupted in Crans-Montana, so that we can achieve a solution that will in practice reunite our people, our institutions and the economy in our country.
I am confident that with your given positive attitude and cooperation, but also with the will of all the political forces of our country, which I approach as partners in this effort, we will succeed in implementing our ambitious but feasible governance programme, for the benefit of all.
After all, our success is your success, and your positive course is a positive development for our country as well.
In conclusion, I would like to congratulate you once again for the important work you are doing and for all that you offer to our country and I look forward to the cooperation that has always distinguished the relations between the CBI and the respective Governments.
Good luck in the work of your General Assembly.
(RM/NG/SX)
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