House approves 2020 budget with conditions

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Cyprus Finance Minister Constantinos Petrides welcomed parliament passing the €9.4 bln 2020 state budget for the government to continue on the path of economic stability, growth and shielding the economy from external risks.

The budget was approved by the majority of MPs with DISY, DIKO’s and the Solidarity Movement’s 29 votes.

AKEL, EDEK, the Citizens’ Alliance, the Greens and the Independent Movement voted against the budget.

Petrides said the decision was taken “In a spirit of prudence, creative consensus and determination, allowing the country to move forward”.

He said the budget’s vision is to follow credible, consistent, and sound fiscal policies, in order to maintain our high growth rates – among the highest in the EU in recent years.

“We want to be able to implement welfare policies to the benefit of society and to move forward with our reform plans.”

Following the three-day budget debate more than 60 amendments tabled by the parliamentary parties, were pushed through.

Ruling party DISY, at times, allied itself with the opposition in a number of amendments to enable parliamentary cross-checking of important funds before they are released.

DISY, in essence, undermined government plans to set up a single labour inspection service, which would act as an umbrella for 28 laws related to labour ministry checks.

Among amendments passed, was the complete removal of budgets allocated to review privatisation options for state-owned enterprises and semi-state organisations such as the Cyprus Telecommunications Authority (Cyta).

The €33 mln ESTIA scheme, aiming to bail out borrowers who have defaulted on their mortgages, saw 50% of its budget withheld for crosschecking.

MPs also decided to withhold the €40 mln budget intended to cover expenditure related to the implementation of the necessary infrastructure for LNG in Cyprus.

Presenting the budget earlier in October, then Finance Minister Harris Georgiades described the budget as balanced, without any deficits.

“Not only is our budget balanced but it also foresees surpluses, which is key to the sustainable development of Cyprus,” said Georgiades.

The budget provides for general government revenue amounting to €10 bln and expenditure of €9.4 bln with the budget surplus estimated at 2.7% of GDP and the primary surplus (excluding debt servicing expenditure) at 5.1% of GDP.