It seems that the Republic will be inconsistent in terms of the implementation of some prerequisites of the Recovery Fund related to the green transition, through which the country could receive European funds amounting to €69 million.
So far, Cyprus has disbursed an amount of €23 million from the imposition of special water charges. However, there is a risk that the other two milestones that the country initially committed to, namely the imposition of a green tax, known as a carbon tax, and the imposition of a landfill tax, will not materialise. As a result, Cyprus will be at risk of losing around €30 million.
The Cypriot authorities committed to these three milestones in Brussels in 2021, but along the way the Government decided not to implement green taxation, due to the reactions. The approval, today, by the Plenary Session of the Parliament of the legislation for the introduction of a municipal waste landfill tax is also considered uncertain, due to the strong reactions of the local authorities, who cite the lack of relevant infrastructure.
New amendment
It should be noted that the Commission temporarily suspended funds of €46 million, which related to the two targets. In fact, the Cypriot authorities, in order to minimize the losses of European funds, proceeded to amend the Recovery Plan, increasing the prerequisites to five, as they also included two tax incentives that have been approved in the context of the tax reform.
That is, instead of the country receiving €23 million for each prerequisite, with the increase in milestones, it can receive approximately €14 million to €15 million for each one. Therefore, if the parties do not consent today (extraordinary plenary session) to the imposition of a waste landfill tax, combined with the non-implementation of green taxation, there is a risk that the country will lose the relevant funds.
The European authorities have not yet officially stated whether they agree with the amendment of the Recovery Plan by the Authorities of the Republic, something that is expected to be clarified in the near future.
It is recalled that the member states will have to implement all the commitments they have made to the European authorities by the end of August. In total, from the implementation of the Plan, Cyprus accounted for an amount of €1.02 billion. However, a total of €589 million has been disbursed so far, corresponding to six of the nine tranches.
Green in the "changed" KOAE
On the other hand, the disbursement of an amount of €50 million to €69 million from the European plan, which expires at the end of the year and concerns the establishment and operation of the Cyprus Business Development Agency (KOAE).
During today's plenary session of the Parliament, the bill is expected to be approved, after being enriched with a series of amendments by the parties. The members of the parliamentary Finance Committee changed the light on the original bill, as a result of which it was revised several times. In fact, until yesterday, party amendments were incorporated into the final text.
Among the amendments incorporated in the last one is that of the ALMA movement, according to which the dismissal of the president, the vice-president and the members of the board of directors of the KOAE will be made by the Council of Ministers by a reasoned decision or following a reasoned proposal by the Minister of Finance.
Also, the provision according to which the officers of the Internal Audit Unit and the Regulatory Compliance Unit will not be subject to personal civil liability for their acts or omissions was deleted.
Personal civil liability will be held by the president, the vice-president and the members of the board of directors of the KOAE. At the same time, a provision was added to the bill according to which the KOAE will be staffed through secondments not only from the public service, but also from permanent employees. In addition, it will be staffed through the appointment of employees, etc.
