Directorate on Economic Policy and European Affairs
The Directorate is divided in three Units
Head: Dionysis Dionysiou, Senior Economic Officer
Head: Aliki Sergi, Senior Planning Officer
Head: Nayia Symeonidou, Senior VAT Officer
1. Macroeconomic/Fiscal Policy Area
(a) Systematic monitoring of the developments of the Cypriot economy and analysis of its prospects.
(b) Monitoring the macroeconomic situation and processing recommendations for safeguarding macroeconomic stability.
(c) Formulation/updating fiscal policy.
(d) Devising of proposals and recommendations on issues concerning economic and social policy.
(e) Economic Impact Studies
(f) Elaboration on issues related to the Social Security Fund and its long-term sustainability.
(g) Briefing international organizations inter alia the European Commission, the International Monetary Fund, the European Central Bank and Credit Rating Agencies on the developments and prospects of the Cyprus economy.
(h) Policy for wages.
2. European Union Sector
(a) Support and co-ordination of the participation of the Ministry of Finance to the ECOFIN Council.
(b) Participation in European Union Committees and Working Groups.
(c) Participation of the Ministry of Finance in Economic and Financial Committee of the EU (EFC).
(d) Preparing the Draft Budgetary Plan and submitting it to the European Commission.
(e) Preparing the Stability Program and submitting it to the European Commission.
3. Green Economy
In Cyprus, by the decision of the Council of Ministers in November 2020, the new National Development Strategy Governance System was approved in relation to the European Green Agreement. The new structure operates under the guidance of a six-member Ministerial Committee in which the Ministry of Finance participates. The structure is completed with the corresponding Committee of General Directors and 13 Technical Committees which examine the individual initiatives / themes of the PA at a technical level.
The Directorate on Economic Policy and European Affairs is responsible for the general monitoring of issues related to the European Green Deal and in particular the financing of the implementation of the climate goals set with the relevant Fit-for-55 Legislative Package, while it also participates in a number of Technical Committees.
In the above context, the Directorate on Economic Policy and European Affairs chairs a Working Group on the Green Economy in the administration of the Ministry of Finance, as well as representing the Ministry of Finance in the global Coalition of Finance Ministers for Climate Action.
4. Foreign Investment Policy
(a) EU Bilateral Investment Agreements with third countries.
(b) Bilateral Investment Agreements of the Republic of Cyprus with third countries.
(c) Strategy for attracting businesses and talent.
Competent department for representing the Ministry of Finance in the National and European committees and working groups for matters of bilateral investment agreements.
5. Access to financing
(a) Financial Instruments
(b) Promotion of financial technology
Competent directorate for the development of financial tools, with the aim of strengthening Cypriot businesses' access to finance.
More specifically, it manages the development of the Cyprus Equity Fund (CEF) and the Cyprus Entrepreneurship Fund (CYPEF), in collaboration with the European Investment Fund (EIF). It also participates in the relevant governing bodies of the InvestEU Fund, which is an important European tool for supporting sustainable investment, innovation and job creation.
At the same time, it is responsible for creating a national development organization, under which all the financial tools that are currently under the management of several government agencies, will be gathered with the aim of supporting state development policies, through bridging financial gaps and dealing with potential market failures.
Additionally, it promotes policies and projects for the development of financial technology (FinTech) in the Cypriot economy.
6. Reform actions, among others:
(a) Court matters
Reforming the Judicial Service to improve efficiency and reduce the backlog of cases pending before the courts is a priority for the government as it is assessed to have a direct impact on economic and social development.
Important actions/reforms promoted include the establishment of the Court of Appeal, the Commercial Court and the Maritime Court, the digitalization of the courts with the adoption of e-justice and the electronic record-keeping system, the introduction of new Civil Procedure Institutions, the project to clear the backlog of cases and strengthening the administrative capacity of the Judicial Service.
The successful implementation of the above reforms will have an impact on the improvement of the administration of justice in Cyprus, mainly through the reduction of the duration of cases’ trials, contributing to the strengthening of the competitiveness of the economy and further enhancing the image of Cyprus making it an international business center.
The Ministry of Finance participates in the promotion and monitoring of the implementation of the above projects through its participation in the Reform Commission established at the Supreme Court.
Actions of the above reform initiative are included in the Recovery and Resilience Plan.
(b) Legal Service matters
The purpose of the reform is to upgrade the administrative capacity of the Legal Service, by strengthening its organizational structure, taking into account the recommendations of the GRECO committee, its technological upgrade and digitalization. The Ministry of Finance, recognizing the importance of this project, actively participates in its preparation and implementation.
(c) the Companies Law
The aim of the reform initiative is to improve business and the competitiveness of the economy, through the modernization of the Company Law, taking into account international best practices in the field of company law. To this end, the Ministry of Finance is launching an open tender for the hire of legal services around mid-March 2023. The project has been included in the Recovery and Resilience Plan for funding.
7. Recovery and Resilience Fund
The Recovery and Resilience Plan (RRP) of Cyprus reflects the comprehensive planning of the Republic of Cyprus for the utilization of resources amounting to €1.2 billion that will be allocated to Cyprus for the period 2021-2026, from the Recovery and Resilience Facility of the EU.
The Directorate of Economic Policy and European Affairs participates in the Preparation of the RRP, in cooperation with the competent coordinating authority (Directorate General Growth). It also coordinates the work of the Technical Committee on the RRP Grant Schemes, which form a significant part of the RRP's overall budget.
In addition, it supervises the implementation of the reforms and investments of the directorates and departments of the Ministry of Finance, included in the RRP.
8. New Growth Model
The Ministry of Finance is in the process of implementing the Long-term Sustainable Development Policy (Vision 2035) which will be based on a New Development Model for the Cypriot economy. Vision 2035 has been drawn up by the Cyprus Economy and Competitiveness Council and contains the required directions to "make Cyprus one of the best places in the world to live, work and be active" by 2035. To achieve this, Cyprus must become a model state with a thriving, resilient economy and a fair, inclusive society. All aspects of the Strategy support the promotion of digitalization and environmental sustainability. The main objective is the formation of a new, modern economic model that will lead to the achievement of sustainable long-term development and the strengthening of the international competitiveness of the Cypriot economy, with the ultimate goal of the well-being of the citizens of Cyprus.
The Directorate of Economic Policy and European Affairs participates in the Monitoring Committee that has been created for the implementation of the New Development Model based on a relevant decision of the Council of Ministers which approved the Governance Mechanism for the implementation, updating and restructuring of Vision 2035.
In this context, the Directorate of Economic Policy and European Affairs has the main supervision of the formulation of a final Action Plan for the implementation of Vision 2035, in cooperation with the relevant Ministries, Deputy Ministries, Departments and other independent bodies.
9. Tax Policy
The Tax Policy Unit mainly deals with the formulation of tax policy on the basis of European and international developments. It collaborates with the Tax Department and the Customs Department mainly on administrative matters, jointly promoting bills or policies and related matters, and examining requests from organizations and citizens.
(a) Requests for tax debts write downs: consider requests of write down of due taxes or concession gratia grant for payment of tax due.
(b) Green Tax Reform.
(c) Promotion of tax measures that result either from the formulation of national policy or from European directives.
(d) Monitoring European Directives.
(e) Coordination of negotiation process and processing DTAs.
(f) Coordination and processing of other tax agreements that regulate the tax relationships of the Republic with third countries and Organizations (i.e. for the exchange of information for tax purposes and for tax transparency).
Maria Matsi, Economic Officer A'
(Also MoF webpage administartor)