Our view: Refreshing to see a president meeting problems head on

MONDAY’S Eurogroup meeting might not have produced all the desired results but it had one positive outcome - it set an end of the month deadline for the signing of the memorandum of understanding. Our EU partners stopped talking vaguely about the signing of an agreement at some point this year and set a time-frame, indicating that they all wanted to see the matter closed as soon as possible.
A couple of days later the troika team arrived in Cyprus to resume talks for finalising the agreement. As was expected, the team did not receive a very warm welcome, with most of the media on Thursday – the day the troika was due to meet President Anastasiades - running reports about ‘strong pressure’ being applied on the government, ‘Negotiations at breaking point’ and ‘Battles on all fronts’.
The familiar confrontational terms were back in the news, presenting the bailout negotiations as a showdown between the government defending the national interests and the troika intent on imposing unfair measures. While this was inevitable, the truth is that reactions to the arrival of the troika and the negotiations with the government have been muted compared to the hostility sparked by last year’s visits.
Now there is no election to look forward to and the bulk of the austerity measures, which unions and political parties were opposing last year, have already been implemented. This week’s discussions have focused on finding ways to make the public debt sustainable – not an easy task as it is further complicated by disagreements over the capital needs of the banks – with the troika raising the issue of corporate tax and the taxation of financial transactions as a way of increasing state revenue.
The only issue on which there might be some reaction would be the privatisation of semi-governmental organisations, which the government, despite President Anastasiades’ electoral promises, is set to accept having decided, quite rightly, this was not an issue worth fighting over. Unions and AKEL will undoubtedly make a fuss about it but are unlikely to win much public support as few people buy the tale that CyTA and the EAC are national assets that should not be sold off. And when it comes to the crunch, only a complete fool would argue that keeping CyTA in state hands is more important than saving the economy.
We should also give credit to the new government for keeping things calm and civilised. We no longer have a demagogue president who stirs public opposition to the neo-liberal troika through his spokesmen and party associates or condones union protests. On the contrary, Anastasiades has been putting all his effort in finding solutions for the many problems the country faces rather than engaging in rabble-rousing and political spinning.
He recognised that the talk of a deposits haircut was causing big harm to the beleaguered banking sector and although the finance minister failed to persuade the Eurogroup to rule it out last Monday, Anastasiades managed to establish during last week’s talks that the European Commission was opposed to it and made this information public to restore some calm and stability. The president will be in Athens tomorrow for a meeting with PM Antonis Samaras to discuss the possibility of the Cypriots banks’ operations in Greece being taken over by local banks and thus reducing the Cyprus re-capitalisation needs.
Not all initiatives would be successful but it is reassuring to see the president exploring ways of reducing the bailout amount and making the public debt sustainable. It is also reassuring that with the exception of the deposits haircut the government has avoided the mindless practice of setting red lines. It could discuss a small increase in the corporate tax, according to reports, if this would help achieve a deal and leave other incentives for attracting foreign businesses untouched.
This flexibility and pro-activeness were not evident in the past, the previous government adopting a fatalistic approach and having no plan other than manipulating public opinion. At least Anastasiades is not shirking his responsibilities, taking every problem head-on and looking for a solution. He might not achieve everything he sets out to do and he might be forced to accept some new, unpopular measures but at least now we have a government prepared to take tough decisions. People recognise this, which may explain why there has been no hostile reaction to the troika. But we should not forget that the odds are stacked against Cyprus and no matter how hard the government tries the agreement will be painful for us.