p ortable
the “real estate bubble” but left the Cypriot middle class over-exposed to lending.
Don’t forget that the construction industry,
one of the pillars of the economy, had already collapsed long before the Eurogroup’s
decision and unemployment had already
hit a threatening 14%.
Gold: Taking the 25 March agreement as
a given, what is the optimal action plan
for the Cypriot government?
G.P.: In my view, the highest priority is the
restoration of trust in the banking system
and the smooth lifting of capital movement
restrictions. This is no easy task and the
Government will need the support of all
Cypriots – taxpayers, businessmen and, if
possible, of people across the entire political
spectrum.
Measures to support the most severely hit
must be taken swiftly. The Government’s
funds are limited, so if society wishes to sail
through the rough seas it must be understood that a transfer of funds among the
various segments of society must take place.
Subsidies must be directed to the unemployed and the really needy – and nobody
else! The healthcare and education systems
must be protected.
Gold: What about privatisation?
G.P.: The government must have a crystalclear policy on privatisation and defend it
at any cost. If privatisations do not proceed
as scheduled, more measures will be taken
with severe consequences on employment
and everyone’s income. The real challenge
for the government is the development of
a long-term plan for the restructuring of
the economy. Many jobs that have already
been lost (and quite a few of those that will
be lost in the next few months) will not be
there when Cypr