2 weeks Ago
I watched on Wednesday the speech of President Nikos Christodoulides about the government’s action plan for 2025. It was a masterful performance outlining the myriad targets that his government is pursuing during the year. At times, I had to pinch myself to return to reality and away from the Cyprus paradise that was being painted in front of me.
Like the impressionist paintings of Monet or Cezanne, it was a picture beautiful to look at, but hazy in the detail . Unlike in art, however, real politics are indeed in the details. And so, behind the alluring facade that Christodoulides presented lay a few indications that not all is well in our island, and that instead of relaxing on the sofa in front of the fire, glass in hand, we need to remain vigilant and alert to what is going on around us.
To start with, this was billed as an exercise in transparency and openness on behalf of the government about its programme. In reality, it was a campaign speech laying the foundations for the next presidential election in 2028. This was evident from the fact that no questions were taken after the speech which would have added some degree of accountability for the government.
Unfortunately, this could mess up the picture being presented. That was not the objective. The speech began with touting our economic success, making it seem that it was all due to the government’s actions.
It gave emphasis to economic growth, comparing Cyprus to other countries in Europe (referring also to a mystery large country which is under a EU monitoring programme – I could not figure out which one it is) and the positive scores Cyprus was given by the credit rating agencies. It reminded me of the phrase, often used to describe how politicians use statistics to bolster their arguments; “there are lies, damned lies, and then there are statistics.” And statistics, if only basic ones, kept on coming one after the other.
How much the government would spend on this road, how much on that etc, etc. Now, I have already written on the shortcomings of the government budget and the fixation with the rating agencies in the Sunday Mail on January 5 . I will not repeat them here.
I will only add that, comparing the success of the Cyprus economy’s growth, which is heavily depended on the tourism and maritime sectors – which are booming worldwide – to other European countries, which are dependent on a declining industrial sector is unfortunate and misleading at best. The president went on to lay the groundwork for the expected tax revision proposals for March. Unfortunately, here too, the emphasis was on creating a positive impression rather than seizing the opportunity for meaningful change.
He talked about how the proposals would lead to an increase in the disposable income of households, particularly the middle class. No doubt this is music to most people’s ears. Yet, it seems, there will not be any plan for fundamental reform of the tax system to address the growing inequality that afflicts most western societies.
A rethink of the capital gains and inheritance tax structures would be something that I would be looking for. Perhaps it is a detail that will surprise us in March when the report of the experts, under the supervision of the University of Cyprus, comes out. On housing, the same motif continued with an emphasis on how various schemes would give money to certain groups that, according to the government, think they are more deserving than others.
This is a “holistic” approach according to Christodoulides. Unfortunately, it is nothing of the sort. Nothing was said about tackling the real problem of high housing costs.
This is the inadequate supply of affordable housing, which requires innovative incentives to boost building of new dwellings as opposed to luxury villas. One other area that the president lightly touched, but gave me concern, was the reference to the expected reform of the role of the attorney-general. He said that the political will on his part was there for constitutional changes to be made, alluding to the required positive stance of the political parties in parliament.
My concern, and one that I have expressed in the Sunday Mail before, was the apparent nonchalant link of the reform of the attorney-general’s role to the reform of the auditor-general. There are no similarities to the required changes of the two institutions. There is no clear argument for any changes to the role of auditor-general other than to ease the function of the executive.
I am waiting for the report of the committee of experts which was due to deliver its report by the end of 2024 before making any final conclusions. A striking example of the chasm between reality and the paradise that was on display during the speech was the often-repeated success of the Amalthea project, which according to Christodoulides, showed how Cyprus was punching above its weight in world affairs. How Amalthea was a total disaster of a project has been documented by various commentators but more prominently by the Economist and the Financial Times.
Yet, the president seems unaware of these criticisms or chooses to ignore them as they do not fit with the image he wants to project. The piece de resistance for me, however, that dissolved any illusions about the campaign nature of the speech came at the end. Christodoulides concluded that he was working hard for making Cyprus better “for the many and not the few”.
It is a line right out of the Akel playbook of campaign speeches. It is ironic that Stephanos Stephanou in his drive to modernise Akel chose to abandon that phrase in a recent address to the Economic forum that Akel was organising. He instead chose to refer that the economy should be working for all Cypriots.
A small detail you might say. But then again, the devil is in the detail. Loukis Skaliotis is an economist.
