Filenews 4 March 2021 - by Eleftheria Paizanou
Important reforms deemed necessary for Cyprus to raise almost one billion euros from the European Union Recovery Fund will have to pass. In Cyprus they account for €968m of the Recovery Fund, but the draft Cypriot proposals include projects and expenditure totalling €1.2 billion. (together with the State contribution). In order to raise some of these funds, the state will need to implement specific reforms, for which it will make commitments through the final national plan for the Recovery Fund.
In the first phase of the allocation, €764 million is allocated to Cyprus. (70% in 2021 and 2022) and in the second phase €204 million ( (30%, by 2023). According to the draft national Recovery Plan, revealed by yesterday's 'F', a total of 12 legislations will have to be put before the parliamentary body and approved in order for the country to get the cash. In fact, it seems that for the majority of the legislative measures to be tabled by the government, the new members of the House, who will be elected in the parliamentary elections on 30 May, will be called to take decisions.
The government, in an effort to avoid ex post disagreements with the opposition parties, informs them in full at this stage of all the actions it needs to take, which are essentially seen as prerequisites for using European funds. The legislative regulations to be adopted by the House concern the axes of strengthening the resilience of the economy, the green economy, the labour market, education and human capital, as well as the axis for the transition to the digital economy. Seven of the 12 legislative measures concern the strengthening of the economy and focus on reforms that had to be implemented since the period of the Memorandum of Fiscal Consolidation! The other three legislative measures concern the green economy and the other two axes. Today, the 'F' presents all the legislation for which the House should give the green light.
Public service reform
In detail, the bills to be prepared by the Ministry of Finance on the axis of strengthening the resilience of the economy, under which €509.5 million will be used, are as follows:
- Reforms to be promoted in parliament in the area of Business Support for Competitiveness (€137 million), focusing on facilitating strategic investments. A bill to modernise the Companies Act, as well as legislation to design and set up a National Promotion Agency, will also be prepared.
- Legislation to be taken in the field of modernisation of public service and local government, to improve the efficiency of justice and the fight against corruption (€82 million), relating to the modernisation of recruitment procedures and criteria and the system for assessing performance in the public service. It is the well-known legislative package on public service reform, which has been pending before the parliamentary Finance Committee since 2019. This is the government's second attempt in the same direction, after previous bills were rejected in 2016. With the public service reform bills, all civil servants will be assessed in half-yearly and annual reports for the purpose of permanentisation and promotion. From one to ten, the performance of civil servants will be assessed. The legislative package provides that employees will be able to object to their assessment, while department heads will be assessed anonymously by their subordinates. The differences between the government and the guilds and the coronavirus pandemic seem to have contributed to the delay in the promotion of the bills in plenary.
It is worth noting that three issues divide government and guilds for the reform of the Public Service. Disagreements concern interdepartmental promotion, evaluation of efficiency, productivity and mobility. Last year, the finance minister had called on the House to conclude the debate on the bills. Time is tight for the existing Parliament, which has only 47 days until it is self-dissolved. Therefore, public service reform will probably be given as a dowry to the new Parliament.
The other legislation concerns the new legal framework for local authorities and related support measures. These are the local government reform bills, which are being debated in the parliamentary Home Affairs Committee. The debate on the legislation is almost complete, but, following yesterday's decision by the Ministry to table in The House a proposal to hold a cyprus referendum on this reform, it is very likely that the passage of the new laws will be transferred for June or July 2020.
At the same time, a bill to set up an anti-corruption agency will be prepared.
- In the field of enhanced research and innovation (€64 million), legislation should be prepared and policies governing the transfer of knowledge decided.
- In the area of ensuring fiscal and financial stability (€41.5 million), legislation to deal with non-performing loans will be forwarded to parliament. Bills will also be prepared to strengthen collection measures in the Tax Department.
