Stability programme and public debt management before Cabinet

Finance Minister Harris Georgiades is set to present his fellow ministers on Monday at a cabinet meeting with two important economic documents on fiscal policy and public debt management seeking the cabinets approval.

Sources from the Finance Ministry have told CNA the Stability Programme for 2017 � 2020 will reiterate the governments commitment for continuing the reform effort and maintaining fiscal policy as it has been defined so far.

The document will refer to the ongoing reforms or those which will be promoted in the context of the reform effort of the economic adjustment programme.

Fiscally, the lengthy document will stipulate a continuation of the policy followed with essentially the same goals and in particular maintaining a balanced budget during the period in question which will provide, as in 2016, for a high primary surplus so that the public debt can follow a downward trend.

It should be noted that as with the last years programme, this years document abides fully with EU fiscal rules.

Once the programme is approved by the Cabinet it will then be submitted to the European Commission, which will review it and issue special recommendations for each country.

The same official told CNA that the Public Debt Management Strategy which will also be presented at the Cabinet on Monday, does not include significant changes compared to last year.

Among others, the strategy determines the strategic guidelines for government funding, the framework of quantitative and qualitative targets, as well as the use of analytical tools which facilitate strategic decision making.

According to the same source, the overall strategy on Cyprus borrowing from international markets would include a bond issue, if the conditions call for it. However with available liquidity close to Euros 2 billion which more than covers the debt maturing in 2017, there is no need to seek funds on that account.

Since there is not need to raise funds for liquidity purposes a bond issue might not be necessary. At the same time however an increase in the depth of Cypriot bonds in the markets might constitute a reason favourable to going ahead with a bond issuance as well as the further normalisation of the maturity profiles through repurchasing or exchanging short term bonds with longer term bonds.

If a (bond) issue takes place it will be small, but the scenario of not having one given that it will not be necessary is also still on the cards, the official said.

Source: Cyprus News Agency