• The Minister of Finance requested via a circular the restriction of state expenditures due to the ongoing geopolitical uncertainty in the Middle East.

• The government will maintain its restrictive fiscal policy to secure surpluses, reduce debt, and ensure positive evaluations.

• The issue of the Cyprus-Greece electricity interconnection was not discussed at the level of EU Finance Ministers, despite broader concern regarding energy costs.

• Mr. Keravnos supports the citizens' initiative for the reconstitution of Co-operative banking, underlining the need for strict safeguards to avoid past mistakes.

• The new Cyprus Enterprise Development Board will exclusively finance viable businesses, so as not to turn into a pool of non-performing loans.

The Minister of Finance is tightening the belt and sends a message that there should be no complacency whatsoever, from the moment global economic uncertainty is intensifying due to the prolonged crisis in the Middle East.

Makis Keravnos confirmed, during yesterday's press conference on the Cyprus Presidency, that all Ministries have been called upon via his circular to limit expenditures and re-prioritize their goals.

Asked by INK to confirm whether a circular has been sent to all Ministries to restrict spending, the Minister of Finance replied in the affirmative:

"I must note that this specific time period does not lend itself to complacency," he stressed.

"Geopolitical developments," he noted, "are continuous, unpredictable and, unfortunately, negative."

He added that the fiscal policy implemented by the state and any problems causing a fiscal cost are being managed effectively.

"The guards are vigilant," noted the Minister of Finance.

Reacting to INK's observation that his brief comment "the guards are vigilant" points to an even stricter fiscal policy, Mr. Keravnos commented:

"For the last three years, the government has been effectively implementing a preventative and restrictive fiscal policy. This policy will continue because it is the one that generates our surpluses, gives us the ability to reduce debt, and maintains the positive perception held for the Cypriot economy by rating agencies and EU institutions."

Electricity interconnection left off the Presidency agenda

No discussion took place within the framework of the Cyprus Presidency of the EU regarding the Cyprus-Greece electricity interconnection, stated Makis Keravnos.

Asked by INK whether, during the Cyprus Presidency, the controversial issue of the Cyprus-Greece electricity interconnection was discussed, given that the project in question is considered European, and if any reference was made to the geopolitical risk posed by Turkey, Mr. Keravnos said:

"Such a discussion at the level of Finance Ministers of EU member states has not taken place."

However, the Minister of Finance mentioned, responding to another question, that discussions were held specifically on the energy sector, in light of the uncertainty caused by the military conflict in the Middle East.

He noted that the Cyprus Presidency also invited energy experts to express their views regarding the energy crisis, as, he emphasized, it has affected the entire economic spectrum of EU member states.

"The concern," he said, "is intense regarding what needs to be done."

He noted that while 25 out of the 27 EU countries are interconnected and additionally possess wind energy, they nonetheless face a serious problem with energy costs, and the discussion, he said, has opened up toward clean energy, storage, and RES solutions.

Finance Minister positive on the reconstitution of Co-operative banking

The Minister of Finance expressed his support, once again, for the reconstitution of Co-operative banking, clarifying that this venture does not originate from the government but, as he said, from a citizens' initiative.

He expressed the view that it could potentially provide another financing option for citizens who face difficulties utilizing the commercial banking system.

Responding to INK's observation that the public is being called upon to participate in the share capital of a bank that has not even cleared the hurdles of the supervisory authorities, and what would happen if it does not receive a banking license, consequently causing initial shareholders to lose their investment, the Minister of Finance said he holds no supervisory authority.

He expressed certainty, however, that the necessary safeguards will be put in place so that a co-operative institution corresponding to those operating in other European countries can be created, without repeating the mistakes that led to its collapse.

The Minister of Finance pointed out that no space or loopholes should be left for various opportunists to penetrate, who in the past led it to collapse.

Minister of Finance reiterates stance on the CEDB

The Minister of Finance reiterated his position regarding the establishment of the Cyprus Enterprise Development Board (CEDB), exactly as he formulated it in his interview with INK, meaning that this organization will not become a "pool of red loans."

"It will cover," he said, "financing gaps that the banking system cannot service."

He clarified that this Board will not finance unviable borrowers.

He repeated that safeguards will be implemented so that non-performing loans are not generated.

His statements were made a few hours before the scheduled debate and vote in the Plenary Session of Parliament on the bill submitted by the Ministry of Finance for the creation of the CEDB.

"This Board will not grant loans to those who cannot pay," he stressed.

"It would be paranoid to create an organization that gives loans to people who cannot repay them," he observed.

In his interview with INK, the Minister of Finance referred to the structure this Board will have, which, fundamentally, as he said, will support startups and young entrepreneurs.

Source: ink.com