The European Commission called for a continuation of coordinated fiscal policies to reduce inflation to 2%, a high level of public investment, temporary and targeted support to vulnerable households and companies, measures to protect purchasing power and the improvement of labour policies, in the context of its 2023 European Semester cycle of economic policy coordination.
The European Semester package includes the Commission’s opinions on the Draft Budgetary Plans of euro area Member States, the findings of the 2023 Alert Mechanism Report, a proposal for a Joint Employment Report for 2023, as well as the post-programme surveillance reports for Cyprus, Greece, Ireland, Spain and Portugal.
Particularly on Cyprus, the Alert Mechanism Report suggests in-depth reviews for 17 member states, including Cyprus, to assess whether excessive imbalances are aggravating, under correction, or corrected, with the view to updating existing assessments and assessing possible remaining policy needs.
Cyprus, along with France, Germany, Greece, Italy, the Netherlands, Portugal, Romania, Spain and Sweden had been the subject of in-depth reviews for the 2021 – 2022 cycle. Meanwhile, Estonia, Hungary, Latvia, Lithuania, Luxembourg, Slovakia and Czechia are added in the list this year.
The Alert Mechanism Report shows, regarding Cyprus, that in 2021, the current account balances, based on 3-year averages, of four Member States stood below the lower scoreboard threshold of -4% of GDP: Cyprus, Greece, Ireland, and Romania. As for the NIIP readings, for ten Member States they were below the scoreboard threshold of -35% of GDP: Croatia, Cyprus, Greece, Hungary, Ireland, Poland, Portugal, Romania, Slovakia, and Spain.
Also the post-programme surveillances reports show that Cyprus, as the other countries under post-programme surveillance, all retain the capacity to repay their debt.
Source: Cyprus News Agency