It is a fact that the Cyprus Economy continues its negative course due to the long standing structural budget problems, the international financial crisis and the crisis affecting the Greek economy and the euro area in general. We would like to mention two recent issues which affect the economy and concern all Cypriot citizens.
The first concerns the decision to support the Laiki Popular Bank during the recapitalization phase of the bank and the second is the recent debate initiated by the Minister of Finance on the Cost of Living Adjustment (COLA) mechanism. Generally, we believe that the state has an obligation to take necessary measures to ensure the sound functioning of our banking system which relied on and supported our businesses and helped the development and prosperity of Cyprus for decades. Supporting banks in this very critical period will give the opportunity for Cyprus companies to borrow at reasonable rates, to drive Cyprus back into investment, to meet their financial obligations and contribute to help reduce unemployment and so forth. Support of Laiki Bank is a must and therefore with great attention should be taken by the new Board to affect all necessary measures and actions for fast restructuring and implementing growth potential.
Regarding the debate on the ATA, we have always advocated that this is an antiquated institution, counterproductive and harmful to Cyprus economy and in the long run for the workers themselves. The COLA increases the wage costs without being in direct relationship with the financial capabilities of companies, organizations and productivity, which causes significant long-term damage to the economy. OEB through a dialogue initiated by the government will put all the arguments and will seek to convince their correctness. OEB said they invite all those involved in the dialogue to cooperate constructively with the Minister of Finance, to understand the criticality of time and not impinge on the time because basically eating away the foundations of our economy. We are ready for constructive dialogue. OEB already warned that there is no time for endless debates. The recovery of the international credibility of our economy depends on the responsibility with which we will handle the matter under discussion. The question is not whether to diversify or not the ATA. The question is whether we will change it in a dominant and positive about the place or whether it will change for us when others will be too late now.