AKEL on economy and 2014 state budget

STATEMENT OF AKEL C.C. PLENARY SESSION

  

The Plenum of the Central Committee of AKEL convened today on Wednesday, 11th December 2013 which discussed the state of the Cyprus economy in 2013, the prospects for 2014 and the 2014 State Budget.

 

A fruitful dialogue was conducted and opinions and proposals were submitted.

 

Based on the discussion that took place, the Central Committee of AKEL reached the following conclusions and assessments:

 

1. The Cyprus economy is in the midst of a deep economic recession which is a product of the global economic crisis; a crisis that has deepened further following the Anastasiades – Eurogroup agreement and the decisions for the haircut on deposits, the forcible contraction of the country’s banking sector and all the rest of the onerous terms the Memorandum imposed on Cyprus.

 

2. The subsequent credit crunch and lack of liquidity in the economy led to the closure of thousands of small businesses and soaring unemployment rising from 12% to 17.2% with 76,000 unemployed.

 

3. One of the most onerous terms of the Memorandum is the Anastasiades’ government’s commitment for privatizations and the selling-off of the profitable Semi-state organisations to the private sector.

 

4. The 2014 state budget is the first budget under the Memorandum and simultaneously the first budget of the Anastasiades government. Unfortunately, the budget follows the dead-end path of the Memorandum, both in terms of its philosophy and construction.

 

5. We conclude that the policy and philosophy of the haircut on deposits has also affected the state budget which includes spending cuts amounting to € 626 million.

 

6. On its part, the government appears to be displaying an excessive zeal, given that the Memoranda financial obligations referred to cuts amounting to €270 million. The developmental funds have been reduced by 20%, while significant cuts amounting to €126 million have also been made to social policy expenditure, to expenditure on health, education and culture.

 

7. The 2014 state budget is the most conservative tight budget ever. It is the tool for implementing a destructive neoliberal policy which is leading the economy into the mechanisms of a vicious cycle of austerity and recession.

 

8. The 2014 state budget has been formulated within the framework of the Memorandum of Understanding with which we disagree. It is a budget characterised by severe austerity, with massive cuts in development. Significant cuts are also made in social welfare, health, education, culture and sports. It is an anti-development and anti-growth budget, recessional and socially harsh.

 

9. As a result of the Memoranda policies the Anastasiades government is implementing with fervent zeal, which are also reflected in the State Budget, social contradictions, unemployment, poverty and destitution are increasing and the crisis and recession is deepening even further.

 

Based on the above conclusions and assessments, the C.C. of AKEL has decided to propose to the Parliamentary Group of the AKEL -Left – New Forces to vote against the 2014 budget in its entirety. Secondary proposals for amendments to the budget will be tabled during the relevant debate in the House of Representatives.