Cyprus faces huge task of multiannual financial framework 2014-2020
By Ophélie Spanneut | Monday 02 July 2012
The adoption of the multiannual financial framework for 2014-2020 will be the first and most difficult task on the agenda for the new Cyprus Presidency of the European Union. Speaking to the press, on 2 July, Cypriot European Affairs Minister Andreas Mavroyiannis said he wants to work towards a “more relevant union which makes sense to citizens,” and sent out the message that “tomorrow will be better”. Current discussions emphasise the need for social solidarity and inclusive growth, and call for a return to “the basics of Europe”.
The budget is the preferred instrument for making this goal a reality. Mavroyiannis showed optimism in the face of such a huge task, and even gave a schedule: the General Affairs Council, on 24 July, will be followed by an informal Council meeting with Parliament and Commission at the end of August to try to align the different positions. In September, the Presidency expects to propose trial figures before reaching political agreement at the European Council in October. However, the task will be all the more difficult considering the debate called for by Parliament on revenues and appropriate resources. Mavroyiannis also said that discussions with MEPs on the financial transaction tax (FTT) and value-added tax (VAT) will be very difficult - the member states concerned are anxious to defend their rebates. Further complications will arise from the fact that the 2013 budget has not yet been agreed.
Regarding jobs and growth, the Cyprus Presidency says it will aim to implement the new course agreed by the European Council, on 28-29 June. However, the Cypriot minister of European affairs said that he “has no revolutionary ideas” to propose regarding employment - he will do “what is possible in the wake of the Danish Presidency”.
For a small country, taking on the rotating Presidency of the EU is “a challenge”. However, Cyprus said that neither its geographical distance from Brussels nor its “lack of experience” will curb its “newcomer’s enthusiasm”. It is not just the incongruity between the size of the tasks faced by this Presidency and the size of Cyprus which poses a challenge: it is also the peculiar situation whereby a small island, which recently asked the Union to bail out its banks, is now presiding over the EU. The minister reassured the press that the “economic indicators are not catastrophic” - but added that Cypriot banks carry the risks of some €23 billion in private-sector Greek debt.
Those who hope for greater fiscal integration will also have to wait. The standard rate of Cyprus corporate tax for 2012 is 10% - the lowest in the EU - and Nicosia intends to keep this in place. Mavroyiannus is determined, saying: “We will do all we can to avoid changing this”.
The Presidency’s programme is available at
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