Cabinet appoints economic advisory body (after letting predecessor die)


By Stelios Orphanides

The cabinet decided on Wednesday to establish an “Economy and Competitiveness Council” (ECC) and appointed economists, a former politician and businesspeople as members, surprising Nobel laureate Christopher Pissarides who chaired its predecessor.

“The council will be flexible and effective and will comprise a chairman and eight members with a three-year term,” the finance ministry said in a statement. “The recommendation provides among others, that councils must operate without depending on any other public authority.”

The body tasked with proposing “concrete policy measures” succeeds the defunct national economy council set up by President Nicos Anastasiades five years ago after Cyprus signed a bailout MoU with international creditors.

The new body will be chaired by Takis Clerides, who served under late former president Glafkos Clerides, as minister of finance.

The other members are Elena Andreou, the head of the University of Cyprus’ Economic Research Centre, Hellenic Bank’s chief economist Andreas Assiotis, Pavlos Photiades, managing director of Photos Photiades Group, which produces Carlsberg beer in Cyprus, economist and hotel director Giorgos Kitazos, economist and political scientist Andreas Psaras, founder of Makkas Winery, former PwC accountant Tasos Anastasiou, senior finance ministry official Giorgos Panteli, and former Akel lawmaker and anti-austerity academic Bambos Papageorgiou.

The national economy council was chaired by Pissarides, who shared the Nobel prize for economics in 2010. A year after the council was founded and amid speculation in the press that his departure was related to the government’s reluctance to listen to the advice of the advisors it appointed, Pissarides decided to relocate to the UK, which he did in 2015.

“Our council died a natural death when we got out of the MoU,” Pissarides said in an email, adding that the establishment of the new body was news to him. “I have not communicated with the government – or vice versa – for years. You would think there would be a ‘thank you and good bye’ but not to my knowledge.”

Pissarides said the national economy council had positive feedback from auditors of the International Monetary Fund, the European Commission, and the European Central Bank – the troika – who supervised Cyprus’s bailout. Cyprus agreed to a bailout in March 2013 and completed it three years later.

“The troika members said that they were the most useful meetings that they had in Cyprus because we took a non-political approach to reforms and were completely independent of any party,” Pissarides said. “But after the troika’s departure meetings with officials ceased and –coincidently – I moved the family base to London, which would not have stopped us meeting as I do come frequently to Cyprus but it may have contributed,” he said.

“After the MoU it became very difficult to have any useful input in government economic policy and especially long-term reforms, which I think are desperately needed in Cyprus but virtually none took place in the first Anastasiades term.”

The economist, who currently teaches at the London School of Economics and in 2013 had officially backed Anastasiades’ candidacy, said that the island’s economy needs “an awful lot” of reforms to ensure the sustainability of public finances despite the “excellent job” done by Finance Minister Harris Georgiades on budget and short-term policy.

He advised action to reform the public sector – which he described as a “difficult” task with the government unprepared to take the necessary decisions – and the implementation of a policy to protect Cyprus’ attractiveness as a tourist destination.

“Our tourist business model needs updating too before our beaches become unattractive even to us locals,” he said. “We cannot continue being the bottom country in Europe in just about every statistic on performance that is published internationally. It’s embarrassing and unsustainable.”

The government proposed a bundle of reform bills to overhaul the public sector three years ago, which the parliament ultimately rejected. The proposals were welcomed as a step in the right direction by economists but were not seen as ambitious enough. Two years ago, the government presented its master plan for the tourism industry, which is still the subject of a debate by stakeholders.

In its attempt to encourage economic activity, the government introduced a Golden Visa scheme, which allows investors acquire the Cypriot citizenship or a permanent residence permit.

As investor interest is concentrated mainly on real estate, construction companies erect high rises and luxury villas, raising fears for the environment. Tourism accounts for about a quarter of Cyprus’ economy, directly or indirectly.

“I wish the new council all the best,” Pissarides concluded. “If they manage to get the government to pass 10 per cent of the reforms needed in this country they will have succeeded.”

The economy, which exited a prolonged recession in 2015, expanded 3.9 per cent last year aided by a 5 per cent increase in consumption. Growth in turn helped the government produce a fiscal surplus of 1.8 per cent of economic output and unemployment fell below 9 per cent.

While these ultimately helped Anastasiades win a second term in February, the island’s banks, plagued by a 45 per cent non-performing loans ratio, are still under pressure and the government was compelled to pump another €2.4bn in taxpayers’ money into the Cyprus Cooperative Bank to stem a bank-run.


About Author

Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • flange

    hahaha, every time they f…. up the economy they set up another economic council
    this time they have appointed some real gems! a hotel manager, a winemaker, a beermaker and booze importer, an academic who has no real life experience, a moron from the ministry who advised Christofias plus an akel economist….. hahaha we are really doomed!

  • almostbroke

    More ‘film flam ‘ 3 card trick ‘ ‘smoke and mirrors ‘ deployed rather than ‘ grasp the nettle ‘ . hello Nik ! You have 3 ‘economists ‘ MPs in Parliament , ask them , of course they would do ‘populism ‘ and ignore the basics , it’s fiscal insanity , committing the same mistakes over and over and expecting a different outcome !!!

    • Copernicus

      Maybe they will do better than the academics who have o experience of the real world. At least these guys have invested in their businesses and have contact with businesses overseas. The academics have only their theoretical models. The AKEL advisor is to keep them on board and he would be in the minority as the guy appointed to the Central Bank Board who has no clue about banking and he is getting 30k a year for doing nothing.

  • SuzieQ

    What a headline! I thought the cabinet had let someone, not something, die! SuzieQ is so easily confused these days!

    • Neroli

      Me too!

  • costaskarseras

    You cannot be serious, Mr President, Takis Clerides was the Minster of Finance when the stock exchange scandal happened. I was most surprised when I saw Mr Clerides on the television during the scandal appealing to the banks to continue lending money to innocent people who knew nothing about investing in the stock market in order to stop the fall in share prices. As finance minister he should have been aware of the elementary principle, never invest money in stocks and shares that you can’t afford to lose. Some of these NPL could have occurred because of the stock exchange scandal.

    The solution cannot be found through the toothless Economy and Competitiveness Council” (ECC) which adheres to the neoliberal dogma and policies which caused this worldwide misery, even in highly industrialized and affluent countries.

    Iceland acted more responsibly, she put the essential needs of her people first and above the interests of the bankers and declared that the vulture funds were not welcome.

    • Copernicus

      It seems the President needs an alternative view since he has lost confidence in his Minister of Finance who got the praise for the fiscal discipline for a bit and then his boss threw it out of the window. The President may soon accept the resignation of the Minister of Finance as he bungled the Co Op and cost the government billions when his buddy as Chairman and then CEO only provided assurances without any results. There is mote than meets the eye in this new EEC and time will show. TK was badly advised in 2000 and is not solely to blame.

      • costaskarseras

        As the policies are dictated by Brussels, it makes no difference who is the Finance Minister.

        • Neroli

          We don’t do policies from Brussels here

        • Copernicus

          If the policies were really dictated by Brussels the economy would not be in the state it is with a distorted property market linked to VISA sales. We would have at least privatisation and a more inclusive economy. Now it is the developers and some hoteliers who benefit. Is Brussels to blame foe this? You seem to have a totally mistaken notion of what Brussels does and it is the convenient excuse.

          • costaskarseras

            I wish that the economic crisis was only affecting Cyprus and not also Greece, Ireland, Spain, Portugal, UK and even the US. Poverty is widespread in these countries. What you call VISA sales is the huge private debt bubble encouraged to keep the economy going across the world and this time bomb is waiting to explode.

          • Copernicus

            Brussels is not blame for the ills of Cyprus. It was the policies of the former government, the present government and the banks. We must not seek to blame others for the bad practices and corruption of Cyprus with ill gotten oligarch money. The other countries share one thing with Cyprus. They joined the euro and did not take the responsibility of prudent fiscal policies and all went on a borrowing binge because of the low interest rates. Brussels was wrong to accept these countries in the euro and the rest is their fault. You seem to have a view that these countries are all victims. No sir they are to blame for not taking seriously their responsibilities of being members of the currency union. Remember what BoC used to say to borrowers: Skepso to kai ginete (think of buying and it will happen). In other words borrow and spend!

          • costaskarseras

            Since gaining freedom from colonial rule, in a very short time, the Cypriots built up their country’s economy. This progress came to a stop temporarily because of the NATO-Greek junta coup and the NATO-Turkish invasion.The catastrophic effects of the neoliberal policies on Cyprus, can be seen by comparing the damage caused by the Turkish invasion of 1974 and the neoliberal economic crisis. Cyprus had to rehouse 200 000 refugees, the national debt was not so high, and not a single depositor suffered a “hair cut” on his savings.

          • Copernicus

            Completely irrelevant to what the issue is today and it is like replaying a tape. You prefer to live in a rose tinted world of yesterday and do so. You have not live in Cyprus to witness what is happening. The fault line is within the country not external and blame game is no good anymore to solve the problems. This is all I have to say.

          • costaskarseras

            The point of order you raise is rejected as the contents of my comment is referring to undeniable facts. Cyprus made enormous economic progress since her independence and again after the Turkish invasion when she lost her most productive resources and had to deal with the huge refugees tragedy when 200 000 people lost their homes. Cyprus would have achieved a quicker recovery after the worldwide economic crisis without the straight jacket of the neoliberal policies imposed by Brussels.

          • Copernicus

            Without Brussels Cyprus would have been bankrupt or gone to the Lira and out of the EU. All these passport sales would not have happened. We should count our lucky starts that the corrupt politicians and bankers who brought Cyprus to the brink had the EU to bail the country out.

          • Alexander

            “I wish that the economic crisis was only affecting Cyprus and not also Greece, Ireland, Spain, Portugal, UK and even the US. Poverty is widespread in these countries.”

          • costaskarseras

            “You might think that the kind of extreme poverty that would concern a global organization like the United Nations has long vanished in this country. Yet the special rapporteur on extreme poverty and human rights, Philip Alston, recently made and reported on an investigative tour of the United States.

            Surely no one in the United States today is as poor as a poor person in Ethiopia or Nepal? As it happens, making such comparisons has recently become much easier. The World Bank decided in October to include high-income countries in its global estimates of people living in poverty. We can now make direct comparisons between the United States and poor countries.” For further reading see The New York Times Jan. 24, 2018

          • Alexander

            So there’s poverty in a few Western countries, including the U.S… I don’t need to read an article in the NY Times to know that. But you wrote that poverty is “widespread” there and yet failed to provide evidence to support your argument.

  • Wanderer

    A central-planning committee and to add insult to injury failing banks’ execs are on it? Just what we need.
    Just cut taxes and red tape, stupid. Freeing the market is the only way to prosperity. Any kind of central planning “masterplans” only make things worse 🙁
    Trump managed to pass a mild tax cut through a hostile Senate in the US (and repealed lots of Obama’s regulations) just a few months ago and small business is already flourishing, unemployment is hitting historic lows, consumer confidence went sharply up etc.

  • Wanderer

    Did not know that an “anti-austerity academic” is a thing. He gets paid for this? LOL

    • Didier Ouzaid

      probably by the most bulletproof source of capital in times of austerity that any holier than thou can tap into: taxpayers money.

  • clergham

    Nowhere near enough bankers or property developers on the committee

  • Frustrated

    The one person they should be listening to and acting upon his advice, as per his utterances in this piece, is Nobel Laureate Pissarides who’s been unceremoniously sidestepped aka dumped. Instead we’re left with the usual crew whose respective pedigrees might look good on paper but the track records of some are somewhat suspect.

    I suppose Anastasiades wants yes-men who will toe the usual populist, do nothing line.

  • comments-on-mail

    They used Pissarides in order to add credibility to the candidacy of Nick and then they threw him away. It didn’t take them long to show their true colors. There is now one of the “best of the best” in every key position in the country. Professor Pissarides should have known better though.