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It is with great pleasure that I participate for the first time in the capacity of President of the Republic of Cyprus in the annual General Assembly of the Cyprus Chamber of Commerce and Industry (CCCI). A Chamber that counts 96 years of active and substantial presence in the business events of our country, contributing decisively to the development and progress of our country and the internationalization of Cypriot business through a rich and multi-level activity abroad. A Chamber of which we have the right to be proud for its practical contribution to the promotion of a sustainable economic model for our country, always through a constructive dialogue and cooperation with the Government of the day. Allow me, before any other reference, to address my friend Christodoulos Agastiniotis, who is stepping down as President of the KEBE.
Dear Christodoulos, your contribution to the business world and our country is pivotal and you have every reason to feel proud of your course and your work. I had the honour of working with you in my previous capacity in the context of economic diplomacy, and not only, where we developed joint initiatives and actions for the promotion of Cypriot business. Our cooperation has continued until today and I can confirm from my personal experience that your dedication and your always practical and sincere approach have contributed greatly to strengthening the business climate in Cyprus.
Apart from being a successful businessman, you are a man - and those who know you well I am sure agree with me - with a strong personality. I have always appreciated your forthrightness and your ability to stand up for your convictions with passion and sincerity. Both personally and on behalf of the Cypriot state, I thank you warmly and wish you every success in your next steps. I am sure that our cooperation will continue.
In recent years we have experienced a series of subversive, I would say, developments that have established themselves as the new reality. Geopolitical stability is no longer taken for granted. We are watching with great concern a new war unfolding in our neighbouring region while the situation in Ukraine after the illegal Russian invasion continues to be tense. Humanity is facing difficult times, while the consequences of the pandemic are still being felt in the global economy.
Against this backdrop of ongoing multi-level challenges, we are called upon to keep the economy on a sustainable growth path with the ultimate goal of the well-being of citizens and by promoting in practice a people-centred model of development.
It is an undeniable fact that our economy has demonstrated flexibility, adaptability and resilience to adverse external conditions. In the third quarter of 2023 a growth rate of 2.2% was recorded, much higher than the European Union (EU) average, while according to the European Commission's autumn forecasts Cyprus will be among the top five Eurozone countries in terms of GDP growth for the period 2023-2025.
Public debt continues its downward trend with a medium-term target to be below 60% by the end of 2026. Unemployment remains low and is on a downward trend and the overall performance of the economy, largely due to your actions, is reflected in Moody's recent upgrade to investment grade for the first time in 12 years.
Despite the good performance of the economy, we are by no means complacent. We are well aware of the significant dependence of our economy on exogenous factors as well as the difficulties and challenges faced by households and businesses. It was against this background that in October - despite the pressures we have been under since the first day in office but we waited until October to be sure of some measures - we announced a targeted package of anti-austerity measures to support households and businesses of €196 million, with a particular focus on tackling energy prices, housing interest rates, but also a comprehensive affordable housing policy with a focus on our young people. The number one problem facing our young people is housing.
The new housing policy, which foresees the use of a total amount of €77 million for the construction of new housing, will be implemented by the European Commission. over a five-year time horizon, consists of targeted measures which will increase the production of the housing stock and ensure, in addition to the increase in numbers, the placing on the market of houses and apartments which will be rented and/or sold at affordable prices which are not prohibitive for the younger generation and the middle class.
The decisions we take and any targeted government support are always weighed against fiscal responsibility, ensuring a prudent path for public finances.
Given our unwavering commitment to ensuring conditions for economic growth, I would like once again, on the occasion of my presence here today, to reiterate the triptych of our approach to governance: fiscal seriousness and responsibility, a stable and sound financial sector and sustained and bold reforms. This triptych guides all the decisions we are called upon to take.
Next week, the first budget submitted under our governance will be debated and brought to the plenary for a vote in the House of Representatives. A budget that sets the tone for our political priorities and translates the key principles of our governance programme into costed and deliverable projects and reforms, with people at the heart of all policies. A budget surplus of 2.2%, which apart from our commitment to fiscal stability, also reflects our commitment to continuous reforms.
All Ministries and Deputy Ministries, in the context of the coordination of the Government's work, have drawn up Action Plans for the period until the end of 2024, which include specific and costed interventions as well as the flagship actions they will implement during this period. Through this process, our goal is to implement the Government's work more effectively and to enhance transparency and accountability.
By setting the tone of our governance in line with the long-term strategy "Vision 2035", because the economy should not be influenced by electoral cycles, we focus on: First, on the immediate and effective resolution of chronic issues of concern to citizens; second, on ensuring a strong and resilient economy; third, on modernizing the State; fourth, on green and digital transition; and fifth, on laying the foundations for a better tomorrow by focusing on education and health. That said, let me give an indication of some of the flagship actions to be taken forward in 2024.
One of our key priorities is tax reform. The last one was in 2002. We are proceeding with a holistic modernisation of the tax system with the cooperation of experts, aiming at enhancing the competitiveness of Cyprus' tax model, reducing the administrative burden for taxpaying citizens and businesses as well as the fair redistribution of the tax burden.
In the energy sector, we aim in the medium term to remove Cyprus' energy isolation through the arrival of natural gas. Natural gas is not a solution but it can be used as a bridge solution to achieve our electricity generation goals as well as our electricity interconnection with neighbouring countries. In the short term measures within 2024, the implementation of the "Photovoltaics for All" Plan will be promoted as well as the implementation of a support plan for the installation of Renewable Energy Sources (RES) systems with storage. At the same time, and in order to enhance the competitiveness of our businesses, we will proceed with special Sponsorship Plans for the energy upgrading of companies and the promotion of the circular economy, while to increase trade we will proceed with the implementation of a relevant strategy for the promotion of Cypriot products and services abroad.
To speed up the administration of justice, a chronic distortion with several negative consequences, the integrated e-Justice e-Justice system will be implemented in early 2024. In addition, we are promoting the implementation of alternative and more cost-effective methods of dispute resolution, such as, for example, mediation to enhance the efficiency of the justice system and decongest the Courts. This option not only provides a quick and efficient solution but also contributes to saving time and financial resources.
In the context of reducing bureaucracy, we are proceeding with the simplification of land development licensing procedures, as well as with the extension of the "IUPODAMOS" system of the Department of Urban Planning for electronic submission of applications. Regarding the digital transition, an area where we clearly need to run faster, we are lagging behind - I see that there are weaknesses internally and that is why we are proceeding with the import of expertise from Greece, which was agreed during the recent 1st Transnational Conference held in Athens. At the same time, electronic interaction of citizens and companies with the state will be implemented through Electronic Identity and Electronic Signature.
2024 is also the year of full implementation of both the reform of local government and the Civil Service, two major reforms that will improve efficiency and substantially transform the public sector and local government. We must move forward with this implementation immediately. We also look forward to the adoption, as soon as possible, of the bill for the Deputy Ministry of Immigration and Asylum and its full operation, which will reinforce the important actions we have undertaken to address migration. It is not only the social problems but also the economic dimension of migration management.
I should also mention that, in 2024, our preparations for the EU Council Presidency in the first half of 2026 will be intensified, with the appointment of a soon-to-be Deputy Minister for European Affairs.
In the key area of Education, in 2024 we will move forward with improving and upgrading technical education and better linking programmes to the labour market, a grand objective that we cannot afford to fail. We need labour from third countries, but that will not solve our problem in the long term. What we need to do is to link our economy with our education.
In the health sector and with the adoption of the GESY, one of the most important social reforms, we undoubtedly need to make a breakthrough to improve the services offered and the sustainability of the system before it is too late. We have to dare and I am sure that, in cooperation with the Parliament, we will move forward before it is too late.
In shipping we have already moved forward with the operation of the "One-Stop Shipping Centre" at the Ministry of State to serve shipping companies and we are completing and implementing maritime spatial planning.
Finally, we are in the era of climate change - just the day before yesterday I returned from COP28 in Dubai where once again the critical juncture at which the health of the planet is at was discussed and how collective effort is the only way to address the challenges. Weather events are becoming increasingly severe and the need for prevention and response is now urgent. No country alone can deal with the effects of climate change, it takes a collective effort. We see weather phenomena everywhere becoming much more intense and the need for prevention and response is now imperative.
Through coordinated actions by the Ministries involved, we are promoting the strengthening of Civil Defence and its transformation into civil protection, as well as the effective operation of the Management Centre, 112.
To what I mentioned very telegraphically, I would like to add the issue of the country's competitiveness, the reputation and image of Cyprus abroad.
A lot has been done in this area, but I have stated, I will repeat, we should clearly do more and the strengthening of the legislative framework is a matter of utmost importance. I understand that there are different views and approaches, there are disagreements. But there is no other choice and as a Government we will move forward on this issue. Our political commitment to show zero tolerance for practices that expose Cyprus internationally is real and in this direction we are working to implement concrete actions that will restore Cyprus' standing as a reliable business and financial centre.
In the context of our decision to address such negative developments for our country, but also zero tolerance, was my request to the US authorities, and I thank them for their immediate response to assist in our whole effort with a team that came to Cyprus and has already started work.
The Government has also already taken concrete steps to effectively communicate both the progress that Cyprus has made in recent years, particularly since 2013, in the fight against money laundering and our competitive advantages, through a comprehensive campaign to rebrand our country.
To all that I have mentioned in relation to our goals for 2024, we should of course add our efforts to end the occupation, to reunite our homeland, to end the current unacceptable status quo in relation to the Cyprus problem. I am aware of the problems, the challenges, the concerns, the frustrations. Nevertheless, the choice for us is one. To strengthen our efforts, our initiatives for the reunification of our homeland through a viable and workable solution always on the basis of the agreed framework, the bizonal, bicommunal federation with political equality as provided for in the relevant resolutions, and the principles and values of the EU. For us there is no other choice, the present state of affairs cannot be the future of our country, and I truly believe that through the resolution of the Cyprus problem we can lead to a mutually beneficial situation for all parties involved in the Cyprus problem.
In conclusion, I would like to assure you that the Government, with a strategic approach, collectivity and methodology, is working towards establishing a favourable environment for business and promoting conditions for sustainable development.
I am particularly pleased that in this effort we have the Cyprus Chamber of Commerce and Industry as an ally and companion. I am sure that through this excellent cooperation that you have always had with all Governments, as we had with our friend Christodoulos, we will continue with the new President in order to achieve our common goal, which is none other than the prosperity and progress of our country. I am absolutely convinced that only through strong cooperation can we create synergies and harness innovative ideas, technology and special knowledge for each sector.
For me, and the Government as a whole, cooperation between the public and private sectors is a prerequisite and can lead to the most effective, most efficient policies, adapted to the needs of today's ever-changing international environment.
I am confident that with your given positive attitude and cooperation, but also the We will succeed in implementing our ambitious but achievable programme of governance for the benefit of all.
I firmly believe that our success is your success, and your positive course is positive development for our country as well.
(PM/MS/GC)
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