The implementation of the European Council’s decisions to improve economic governance and the management of issues concerning the financial sector that have arisen mainly as a result of the global economic crisis, will be among the priorities of the Cypriot EU presidency, Minister of Finance Kikis Kazamias said on Tuesday, speaking at a press briefing for the preparations for the Cyprus EU Presidency in the second half of 2012.
“The Eurozone is going through a very critical period, which is likely to determine its very survival,'' he said, adding that Cyprus will be called, during its Presidency of the EU Council, to contribute to the successful management of the economic crisis and the implementation of EU decisions to create a tighter frame of fiscal policy.
Kazamias stressed that the increased pressure from Brussels for a tight fiscal policy will be in the interests of Cyprus, since it is expected to improve the county’s level of organisation and discipline.
''All these changes on a European level have resulted in a much tighter frame of fiscal policy, especially for the member states of the Eurozone and, therefore, the Republic of Cyprus should shape its financial policy, taking into account this new framework,'' he added.
He also said it was necessary for the new framework of economic governance to be understood by the political system, social partners and citizens, since the existence of social consensus and understanding of the new environment are essential elements to avoid problems in the future.
Kazamias added that the Ministry of Finance and the Government had a constructive contribution to the debate on strengthening economic governance, acknowledging that to overcome the crisis the EU should strengthen budgetary discipline rules. However, he said, the Cypriot Government supported that the policies concerning social issues and direct taxation should remain under national competence.
The Minister explained that these changes on an EU level were necessary, since the global financial crisis has highlighted the inadequacy of the existing institutional framework, as reflected in the failure of the preventive and corrective arm of the Stability and Growth Pact, to prevent a surge in fiscal deficit and debt.
