Government to table a new budget before the Parliament in January
Government to table a new budget before the Parliament in January
18/12/2020 16:12

Finance Minister Constantinos Petrides said that the Government will table a new budget before the Parliament in January, after the rejection of state budget for 2021 on Thursday.

Despite the rejection, the MPs passed a decision for contingency expenditures, known as ‘twelfths’, for the month of January, so that the State can function. But the Minister of Finance said that these expenditures cannot exceed the spending of the corresponding month of the previous year.
 
In his statements, Petrides described the rejection of the budget as “a very negative development”, in relation to the huge effort of the Government to address the pandemic crisis, to support the incomes of the citizens and to strengthen the welfare state. It is, as he said, "a negative development for the effort we will make in 2021 to start a strong recovery."
 
As he explained, the rejection of the budget means a cut of € 2.91 billion in social benefits and of € 1.1 billion in health issues, which as he said, was the largest amount concerning the welfare state ever provided in a state budget in Cyprus.
 
Petrides expressed his satisfaction over the approval of the contingency expenditures, however, as he said that meant reduced expenses compared to what was provided for 2021, since the budget was increased by € 742 million compared to 2020.
 
He also said that voting against the budget also meant a vote against funds from the EU Recovery and Resilience Fund, as all funds earmarked for the year are through the state budget. He also explained that the state will not be able to sign contracts or start new major projects scheduled for January, noting at the same time that voting against in a very difficult period gives negative messages abroad and deepens financial uncertainty.
 
In January, he added, the government intends to submit a revised state budget, hoping that the Parliament will vote in favor and restore normalcy and constitutional legitimacy.
 
The Minister of Finance pointed out that the Government and the Ministry acted in a very consensual way from the beginning of the preparation of the budget for 2021. It was, as he explained, the first time that before the filing of the budget, bilateral contacts were made with all political parties, taking into account their positions, while the Ministry was never loud in the public debate on budget issues.
 
He also said that as some of the parties have stated, the vote against budget was not related to issues concerning the budget itself, but either to ideological issues that are respected, or to issues that are completely unrelated to the budget.
House Plenary on Thursday rejected the 2021 state budget, by 29 votes against to 24 in favour.

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