Extracts from the speech of Andros Kyprianou, Secretary General of the C.C. of AKEL, at the presentation of the candidates for the European elections in Famagusta district

  

17th March 2014, Community Council Hall, Frenaros

 

“…One year after the unprecedented decision taken by the Anastasiades Government and the other Eurozone Finance Ministers for a haircut on deposits in Cypriot banks, it has been proved beyond any shadow of a doubt that that decision, besides unjust, also created an unprecedented negative economic situation in Cyprus.

The impact of these decisions are regretfully visible from the very first few months – stagnation in economic growth, the closing of small businesses, a sharp rise in unemployment, the intensification of social inequality and growth of poverty. The danger of the expropriation of properties and homes, as well as the selling off of public wealth/property, completes the puzzle. This is unfortunately the real situation in Cypriot society, no matter how much praise our lenders may shower us with, no matter how many congratulations we receive from the rating agencies.

What concerns us most is the position adopted by the Government in the negotiation with the Troika. We see the Government every time using the implementation of the Memorandum as an excuse to push through the most reactionary economic policies. We see it rushing before each review conducted to promote another part of its long-standing neoliberal policies.

One cannot explain otherwise the introduction of prohibitions for the regulation of rents and protection of the primary residence when the members of the Troika have stated that they themselves do not view such approaches as negative. One cannot explain otherwise the ease with which the Government has accepted linking the instalment with the approval of the Bill tabled in Parliament on privatizations. They recognized the social reaction and were aware of the unfounded arguments they were using to persuade public opinion and this is why they knew that all the blackmailing of the People about a bankruptcy if the Bill wasn’t approved was the only option they had to carry out their long-standing demand for privatizations.

Of course they haven’t shown the same zeal for the implementation of a National Health Scheme, since they have taken care in the updated Memorandum to transfer the timetable for its completion for the future. They also did the same concerning the financial commissioner and its ability to manage loan restructuring cases since they have included additional delay in the new updated Memorandum until a relevant study is conducted. The postponement on the Financial Commissioner is another pre-election pledge that has not been met, and despite what Mr Anastasiades invokes in his letter of reply he sent me on 21 November 2013. He noted in this letter that this “a Commissioner has been approved and appointed to whom any complaints of borrowers can be submitted in connection with the restructuring of their loans.”

The Finance Minister’s statement that there will not be any other measures implemented in 2014 is another pledge that has been broken. The Government has rushed to change once more the framework on immovable property in the updated Memorandum, putting even more burdens on vulnerable groups of the population. The supposed pledge for the reduction in interest rates as a consequence of the reduction in deposit rates has also been broken. Unfortunately Cyprus continues to maintain the highest interest rates in the Eurozone.

It seems that the Government has chosen to implement only those commitments clashing with the interests of the People.

Last year’s course, besides the effects on the economy completely refutes another myth persistently cultivated by the governing Democratic Rally party and President Anastasiades, namely that the primary responsibility for the current state of the Cyprus economy are public finances. The Government cannot constantly boast that it has stabilized public finances and indeed received the Troika’s praise but the 2013 budget and fiscal deficit is bigger than the 2012 budget deficit. It cannot be that in each of the reviews and evaluations it has conducted, the Troika reiterates that the biggest problem facing the Cyprus economy remains the instability in the banking sector, whilst the President and Democratic Rally party continue to blame the previous Government and AKEL for the economy’s problems.

For the sake of documentation, it is worth noting that the recent figures from “Eurostat” for the period 2008 – 2012 show that public expenditure in Cyprus as a percentage of GDP was below the average of both the Eurozone and the EU. The Government must finally tell the truth to the people of Cyprus and stop invoking witticisms as an excuse for their hitherto political decisions.

The Government must also give an answer to the Cypriot people why at the same time when public expenditures have fallen this has not resulted in growth as it was assuring the people day and night before the elections.

The results of the recent review illustrate that the biggest challenge for the Cyprus economy remains the banking sector. Despite the supposed bail-out and haircut on bank deposits, despite the restructuring of the banks, the banking sector has been shaken to its roots and cannot finance the economy. The non-performing loans are increasing because of the recession, whilst restrictions on the movement of money abroad are still being enforced.

The situation in the banking sector demands a collective tackling and for sure actions that undermine institutions and the independence of the Central Bank are not helpful. It cannot go unnoticed that the Governor of the Central Bank came under an unprecedented war, blackmail and threats from the Anastasiades government which aimed to force him to resign. These phenomena concern us, not only due to the impacts they will have on the economy, but because they create a very dangerous precedent for political institutions. I repeat the question that we as AKEL have put to the Government: if an independent institution such as the Central Bank which is protected by the Constitution, European institutions and the European institutional framework, is treated in such a way to what extent can they protect ordinary citizens or other more fragile institutions from the unprecedented authoritarianism of the Anastasiades government?

If in the end we have a government that is not at all interested in consensus, but only interested in how to impose its own preferences and ideological positions, using even the Troika as a pretext, what else can we expect from it? “