The government can’t go on hiding in the face of the increase in interest rates

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

 

The first increase in interest rates by the European Central Bank in eleven years puts an end to the period of negative interest rates in the Eurozone. It also puts an end to the illusions of all those forces and circles who, all through the previous period, were claiming adamantly that inflation and price increases in Cyprus and Europe are of a transient nature.

The biggest problem, however, is that – as in the past so today too – the consequences will not be the same for everyone.

On the one hand, society will bear the burden of decisions. With increases in the amount of loan instalments. With increased costs for public finances from the increase in the cost of servicing public debt.

On the other hand, the banks will increase their profits by increasing the income from loans and reducing the cost of deposits.

Instead of hiding, the DISY government is at long last called upon to take a stand.

To state whether it has a plan to provide support to working people and businesses. If it has the will to address the deficit. Or whether it will in the end continue to pretend that nothing is happening, serving the banks’ profits.