Finance Minister says public debt burden due to CCB necessary to address banking sector’s uncertainty

Finance Minister Harris Georgiades assured on Thursday that the governments political commitment to avoid any new taxation remains firm and has not changed, in spite of the significant but non-recurrent burden of the public debt to facilitate the liquidation of Cyprus Cooperative Bank (CCB).

The Government made a Euros 2.5 billion deposit in CCB in April, to acquire assets of approximately Euros 8.3 billion, and will also pay Euros 1 billion to acquire property worth Euros 600 million and non-performing loans of Euros 500 million, following an agreement with Hellenic Bank.

He added that the burden of the public debt for CCB was necessary in order to permanently address the uncertainty in the banking system and in order to have banks free of the problems and the mistakes of the past.

Addressing on behalf of the President of the Republic the 57th Annual General Assembly of The Institute of Certified Public Accountants of Cyprus, the Minister pointed out that the transfer to the state of an extremely large loan, real estate and equity portfolio guarantees a new important source of public revenue.

He said that, as the European Commission has pointed out, the necessary conditions were that the state should not be involved in the management of these assets, the legislative framework must be improved and the effectiveness of the judicial system must be enhanced. He added that the government was already promoting measures towards that direction.

Georgiades assured that the Government would continue to promote policies to ensure macroeconomic stability and confidence in the economy.

He also said that the tax framework should remain simple, attractive and predictable and expressed the need to further improve the reputation of Cyprus as an international business center.

“Maintaining the positive prospects of the services sector and expanding it into new areas, such as investment fund management, requires full compliance with strict international and European standards,” he added, noting that geopolitical developments are creating additional challenges and opportunities.

According to the Minister of Finance, Cyprus should demonstrate in practice that it is a model country in the area of regulatory compliance and called for further efforts and cooperation between the public and the private sector.

Source: Cyprus News Agency