News Column

State overspending watchdog nears completion

June 2, 2014



By Elias Hazou

THE FINANCE ministry is putting the finishing touches to regulations governing the operation of the fiscal council so that they can be approved at the next plenary session this Thursday.

The establishment of the body this month is a key condition for the release of the fifth bailout tranche.

The independent fiscal council will have three members with the power to impose fines and jail time for offenders. The council will be responsible for overseeing the implementation of fiscal rules, analysing fiscal policy developments, and evaluating the macro-economic and fiscal forecasts prepared by the government.

The council is part of an omnibus bill, the Fiscal Responsibility and Budget System Law (FRBSL). It provides for sanctions for overspending or other violations. For example, any official convicted of assuming any commitments without a reasonable excuse faces a fine of up to 20,000 or up to a year in jail or both penalties. The same applies to anyone authorising any spending that exceeds the approved amount or providing false information.

Last month the cabinet named the three council members. They are Demetris Georgiades, Marios Zachariades and Alkis Loizides.

The chairman of the council will be employed full-time for a six year term, the other two members serving on a part-time basis for four and five years, respectively.

Although the House finance committee was consulted on the selection, it has no final say or veto power over the appointments.

At a session of the same committee yesterday, MPs from the various parties gave their final remarks on the regulations for the fiscal council, which the finance ministry will look at before writing the final draft and sending it back to parliament for a vote.

Main opposition party AKEL meanwhile is unhappy with the inclusion of Georgiades, financial news editor and a columnist with Politis newspaper.

In his editorials, Georgiades, a free-market and small-government advocate, frequently slams MPs.

He has taken to referring to deputies as 'voleftes' a corruption of the Greek word for MPs denoting a placeman. The term has long entered slang usage.

AKEL deems the language objectionable. MP Yiannos Lamaris said yesterday that it is not so much Georgiades' views per se that they find vexing, but rather the columnist's irreverent "tone and ethos".

In a jibe at Georgiades, Lamaris hinted that the journalist himself has now landed a cushy job, and wondered how well Georgiades would be able to work with parliament on monitoring budgetary spending.

The AKEL MP suggested the government ought to have selected someone "with less liberal opinions, thus allowing a different point of view to come across (the fiscal council)."

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Source: Cyprus Mail


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