The uncertainty that characterizes the forecasts on which the state budget for 2022 is based due to a possible new outbreak of the pandemic, is the main feature highlighted in the report of the Parliamentary Committee on Finance for the 2022 state budget.
At the same time, the uncertain but positive medium-term prospects of the economy are noted, as well as the need for sustainable economic development and proper implementation of the Recovery and Sustainability Plan. largely from the course of the disease COVID-19. It is the wish of all parties to normalize the effects of the health crisis on the Cypriot economy as soon as possible and to return it to a sustainable course of development.
It is also noted that the sustainable development of the economy, the reduction of public debt to sustainable levels, the achievement of a budget surplus, the protection of consumers 'living standards from possible inflationary pressures, and the general assurance of citizens' prosperity should be included in the main priorities. of the goverment.
The promotion of the green economy, digital transformation, research and innovation, the rational and effective management of MEXs, the implementation of structural reforms on a sound basis, as well as the implementation of important development projects, he added, will contribute to economic recovery and development. It is also mentioned that the rational and optimal implementation of the national Recovery and Sustainability Plan, the utilization of the European tools included in the Cohesion Policy Program 2021-2027 and the financial instruments of the European Investment Fund, in order to promote projects and character, will contribute to the support of employment, to the strengthening of entrepreneurship, and consequently to the development of the economy. COVID-19, as well as the impact it has had on public finances and the real economy. They also acknowledge the uncertainty on the basis of the forecasts on which the state budget for 2022 is based due to a possible new outbreak of the pandemic. others in the management of NPLs, in the protection of the main residence and small business housing, in the high rate of public debt and budget deficit, in social inequality, as well as in the effects that increases in prices of basic goods and products may have on consumers.
Some members of the committee acknowledge the fact that the loss caused to GDP by the pandemic in 2020 has been offset this year and are pleased with the economic returns for 2020 and 2021, which are above the eurozone average. . They also recognize the prospect of the Cypriot economy returning to positive growth rates from 2021, as well as the fiscal improvement observed. Furthermore, some members emphasize the resilience of the Cypriot economy, the rational use of budget margins and access to international markets to meet the financial needs to address the pandemic in 2020 and 2021, the improvement of social indicators, the improvement of of the Cypriot economy and the rational management of public debt. Members of the Committee are particularly concerned about unemployment levels, in particular long-term Government measures to support the economy to tackle the disease pandemic COVID-19 and the lifting of fiscal easing allowed by the European Union.
They also expressed reservations about the position of the Minister of Finance to achieve full-time employment soon. strength of consumers, taking into account the uncertainty caused by the ongoing outbreak of the disease COVID-19The members of the committee express reservations regarding the levels of the social indicators, noting in particular the high percentage of the population that is close to or below the poverty line.
Furthermore, members of the committee stress, among other things, the need to adopt a sustainable development model, on the basis of which all productive sectors of the economy will contribute to GDP growth, implementation of targeted social policy, including housing measures, support for the vulnerable population and mitigation of income inequality, in order to ensure decent living conditions, adjustment of social benefits due to rising commodity prices, increase in the rate of economy, which preceded the pandemic.
In relation to the budget for 2022, differing views are expressed by the members of the committee. In particular, some of them express the view that it lacks vision and perspective and other members note that the structural problems of the Cypriot economy are not addressed correctly and holistically through the proposed budget. In contrast, other members of the committee express the view that the proposed budget serves the development perspective of the Cypriot economy.
The positions of the parties
Ο Democratical Alarm states that it will vote in favor of the proposed state budget and unreservedly supports both the economic policy pursued by the Government and the ambitious reform effort under the Recovery and Sustainability Plan. According to the party, the proposed state budget for 2022, with primary expenditures of € 8 billion, maintains its developmental and social character. Through the budget and without any need for new taxes or other charges, the implementation of the ambitious development program continues, among other things, the possibility of exercising an effective social policy is maintained, the implementation of the GESS is supported and a significant armament upgrade program of the National Guard is implemented. . The launch of the implementation, through the budget, of the National Plan for Recovery and Sustainability is also considered extremely important.
According to him, taking into account the funds of the Plan and the Cohesion Policy Fund, as well as the additional private investments that will result from the implementation of the supported projects, the financial impact of the Plan is over € 4 billion. As a result of the implementation of the Plan, in addition to the projected increase in Gross Domestic Product, an additional percentage of 7% will be added, while the implementation of the Plan's funds will create more than 11 thousand new, well-paid jobs.
The AKEL states that the Government's budget for 2022 is more a rehearsal of a 2023 election campaign than a plan for the future of the country. As he comments, the Anastasiadis-Alarm Government "immersed in corruption, arrogance and disputes neither wants nor can give a vision for Cyprus and its people." He adds that the major problems that concern the majority of Cypriot society - inequalities, inaccuracy, deregulation of labor relations, the continuation of sales - are not resolved and are not even concerns of the Government. "In fact, behind the big words lies the reality that is none other than the low level of implementation of the development budgets of previous years. "One in three projects that the government promises in the budget, is never implemented and remains on paper", he states.
The party notes that despite the improvement of economic indicators and the inclusion of increased expenditures in the state budget for 2022, the Government continues to pursue an economic policy aimed at the detriment of the majority of society. He pursues, he adds, economic policy without comprehensive planning, serving selfish interests and failing to deal effectively with the existing problems of society, thus increasing economic and social inequalities.
As mentioned, the AKEL will vote against the budget of the Anastasiadis-Alarm Government because the place needs another course, a real change in the policies, in the priorities, in the style and ethos of governance.
The DIKO states that the situation in the economy remains vulnerable both at the budgetary level and in the real economy. He notes that current international developments, which are boosting global demand combined with the temporary inability to adequately supply goods and energy, are leading to rising inflation which has a direct impact on households and small and medium-sized enterprises. European Commission decisions promote relaxation to the Member States of the European Union in order to curb accuracy and absorb shocks to the real economy, the Government is reluctant to promote measures that will offset the consequences of accuracy.
Cyprus, it is reported, as a country that is completely dependent on imports of fossil fuels due to the lack of strategy for their replacement by RES, becomes much more vulnerable to imported inflation, which is now found in all aspects of the economy. also that the proper utilization of the EU Recovery and Resilience Fund is an important opportunity to promote reforms that will correct distortions over time and strengthen the local economy.
The DIKO points out the risks of possible non-transparent management of the resources to be raised from the Recovery Fund. He believes that control and transparency are the elements that can ensure that the resulting resources will be properly utilized to be channeled for the benefit of the real economy. Recommends the establishment of an Ad Hoc Parliamentary Committee, which will monitor the processes of utilization of the Recovery Fund with the main focus on the exercise of parliamentary control, in order to enhance transparency in the channeling of funds. loans, closure of banking institutions, increase in public debt that we had in recent years, came to add the health crisis further aggravating the situation.
Even today, it is reported, businesses remain closed since the outbreak of COVID-19, while others struggle to stay open. The State's contribution to employees was substantial, he adds COME M, but failed to fully fill the gaps created. He also states that stagnation and instability are the main characteristics of the Cypriot economy today. ELAM states that its own economic vision is based on the creation of new jobs through government initiatives and encouragement of investments by entrepreneurs. It would automatically reduce state benefits to welfare benefits and increase citizens' contributions to the state. in their industry, will support the vulnerable groups of the population, will stand by the side of retirees, the lowly retirees, will strengthen the combat and deterrent capability of the National Guard and will stop wasting hundreds of millions of euros on accommodation, food, hospitality from illegal immigrants taxpayers' money.
Η EDEK states that for another year the budget presents the same or approximately the same characteristics of previous years. What was unfortunately not realized in both the crises of 2000-2004 and 2012-2013, as well as the recent pandemic, it is reported, is that the crises not only have consequences, they also offer opportunities for substantial changes and new developments. The coronavirus crisis , it is reported, confirmed that in the last two years the indicators of the Cypriot economy may have improved, but they were not to the extent that they create a climate of confidence and security. The enthusiasm that was observed was not much more justified, it is reported.
It is also noted that for another year the budget is basically managerial. He notes that no one is questioning the infrastructure, but we must not dwell on it alone. As it is mentioned, the development projects of a reciprocal character have their own value, they provide the state with incomes with which new projects can be financed in the future. It is unjustified for five years not to include such projects in the budgets. It is also noted, among other things, that there is no comprehensive social policy program that can effectively support groups of the population who are in a difficult economic situation or face serious social problems.
The Democratic Party states that it is a positive development that the 2022 Budget provides for a significant fiscal correction as it seems that the big losses of 2020 are being covered. The economy, it is reported, is slowly returning to positive growth rates, both this year and next, leaving behind the negative growth rate of 2020, as well as much of the negative effects of the pandemic. The State Budget of 2022 has been prepared based on some specific data, some assumptions, some scenarios and some assumptions, which, at the end of the day, can be refuted. Expresses the position that the close and regular monitoring of the objectives and forecasts and the timely intervention of the state services, where there is a discrepancy, is imperative.
There is also concern that there are additional factors besides the pandemic that add to the climate of uncertainty and indicate that they are not sure to what extent they have been taken into account in the preparation of the Budget.
Finally, the DIPA Supports the Recovery and Sustainability Plan which reflects the integrated planning of the Republic of Cyprus in order to utilize the resources of 1,2 billion euros that will be allocated to Cyprus for the period 2021-2026 by the European Union Recovery and Sustainability Mechanism.