The government’s subtle neutrality in the face of bank huge profits

Statement by AKEL Political Bureau member and Head of Economic Policy Charis Polycarpou

5 March 2024, AKEL C.C. Press Office, Nicosia

Banks continue to get richer at the expense of society, but the government and the Central Bank continue to remain squeamishly neutral.

After the profit spree that banks in Cyprus recorded in 2023 – approaching €1.5 billion – the course they are following in 2024 not only does not lead to a de-escalation, but on the contrary increases profits and with it the burden on households and businesses. According to figures released by the ECB, in January 2024 the interest rate on mortgages increased while the deposit rate decreased, resulting in a widening of the gap between the two and consequently an increase in banks’ profits.

In the face of such enormous provocation, the N. Christodoulides government remains scandalously indifferent. If giving away millions of euros again to a handful of big businessmen was rendered possible, then finding a way to promote support measures to help the majority of society from the increased cost of borrowing is imperative by giving the state more possibilities to provide support measures through the taxation of the banks’ huge profits.

The question, however, for the government remains stark: does it have the political will to do so or will it continue to put the interests of the banks above the interests of society?

05.03.2024