Given the government’s lack of action, AKEL submits a proposal to provide support to borrowers

Statement by the General Secretary of AKEL Stefanos Stefanou after the session of the Parliamentary Finance Committee

1 July 2024, AKEL C.C. Press Office, Nicosia

Given the government’s lack of action and unwillingness – which is confined to issuing appeals for the banks to curb their arbitrariness – AKEL has submitted a proposal for a bill proposal to create a Social Solidarity Fund to support borrowers. The main source of revenue for this fund is the adoption of a one-off 5% levy – for 2024 and 2025 – on the increased revenues of the banks due to the increased interest rates.

Based on the banks’ increased revenues, they are estimated to be around €50m per year. For two years we will have a revenue of about €100m with which the government can pursue a targeted policy. Above all, to support specific groups of borrowers, to promote a housing policy, to implement the programme – which the government has announced and has not yet implemented – for interest rate subsidies and a number of other policies.

It is a proposal which is based on the Spanish model. According to studies made, a number of five EU member states have proceeded to implement programmes to tax the increased incomes or windfall profits of the banks. So we do have a precedent of banking experience.

When proposals are logical, as ours are, neither the financial system, nor its stability is at risk.

I note that our proposal is open and that several constructive proposals have been heard from technocrats. We want this proposal to move forward for the benefit of society and it can move forward if the government demonstrates the necessary political will, which we very much doubt exists.

The absence of the Minister of Finance today, despite the fact that there was an understanding, shows that the government does not want to take a political stand. So we are also waiting for the government’s reaction, but we will proceed with our proposal.

1.07.2024