What people need is state support, not loans
Statement by AKEL C.C. Spokesperson Stefanos Stefanou
AKEL C.C. Press Office, 12th April 2020, Nicosia
What working people, households and businesses need immediately during the period of the suspension or big reduction in the operation of businesses is the provision of state support and not loans from banks.
What the government is proposing – which has been rejected by the political parties apart from ruling DISY party – is that businesses and households proceed to loans from the banks. In reality this wouldn’t be effective in the phase we are going through. Without adequate incomes, businesses and households will not be able to make use of loans. Even more so given that Cyprus has one of the highest private debt percentages in the world.
Furthermore, the government’s bill to provide state guarantees to banks suffers from a lack of transparency and extensive control over the banks, as well as from a dangerous over-concentration of powers in the hands of the Finance Minister. This is also pointed out by the Auditor General in his Report.
The government is called upon to make use of the proposals submitted by the parties and amend its proposal. Its dogmatic persistence on its proposal will lead to deadlocks. State support can be funded by a combination of sources, mainly by extracting resources from the government issuing a bond. The state must control funding, which must be targeted.
The granting of state guarantees to the banks may operate complementary, but with substantive scrutiny and transparency so that there won’t by corruption and waste of resources.
AKEL has submitted a comprehensive proposal and, as always, is ready for a creative and responsible discussion of the issue.
