Executive Capacity
#40Key Findings
With numerous gaps in its central planning and strategic capabilities, Cyprus falls into the bottom ranks internationally (rank 40) with regard to executive capacity. However, its score in this area has improved by 1.0 point since 2014.
Implementation of strategic planning has been slow. Line ministers are fully responsible for their ministries, with a Secretariat of the Council of Ministers reviewing proposals on technical grounds. The cabinet and minister of finance have greater control over policies with budgetary implications. Informal coordination is not a regular practice, but was more common during the pandemic.
Most policies with broad impact are not subject to RIA. Ex post assessment is not a part of government practice. Public consultation is limited to a small spectrum of powerful actors. Government communication during the pandemic was routinely contradictory, though the government’s policy response was largely effective.
A municipal reform effort entailing mergers and reorganizations is underway. However, to bypass a requirement for local approval via referendums, the government canceled municipal elections in 2021. Regulatory enforcement is undermined by corruption and political expediency. Support for hydrocarbon exploration has fanned tensions in the region.
Implementation of strategic planning has been slow. Line ministers are fully responsible for their ministries, with a Secretariat of the Council of Ministers reviewing proposals on technical grounds. The cabinet and minister of finance have greater control over policies with budgetary implications. Informal coordination is not a regular practice, but was more common during the pandemic.
Most policies with broad impact are not subject to RIA. Ex post assessment is not a part of government practice. Public consultation is limited to a small spectrum of powerful actors. Government communication during the pandemic was routinely contradictory, though the government’s policy response was largely effective.
A municipal reform effort entailing mergers and reorganizations is underway. However, to bypass a requirement for local approval via referendums, the government canceled municipal elections in 2021. Regulatory enforcement is undermined by corruption and political expediency. Support for hydrocarbon exploration has fanned tensions in the region.
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How much influence do strategic planning units and bodies have on government decision-making?
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9
Strategic planning units and bodies take a long-term view of policy challenges and viable solutions, and they exercise strong influence on government decision-making.
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7
6
Strategic planning units and bodies take a long-term view of policy challenges and viable solutions. Their influence on government decision-making is systematic but limited in issue scope or depth of impact.
5
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3
4
3
Strategic planning units and bodies take a long-term view of policy challenges and viable solutions. Occasionally, they exert some influence on government decision-making.
2
1
1
In practice, there are no units and bodies taking a long-term view of policy challenges and viable solutions.
The foundations of integrating strategic planning into administrative practices were mainly laid out in 2014 reforms. The Directorate General for European Programs, Coordination and Development (DGEPCD) was assigned competences for planning, coordination, monitoring and the evaluation of implementation. The DGEPCD was renamed the Directorate General of Coordination (DGC) and placed under the Ministry of Finance (December 2021). This seems to clarify and strengthen the DGC’s role as the general coordinator for the above tasks.
In line with the 2014 law on fiscal responsibility, planning and coordination of development by the DGC, headed by the secretary of the Council of Ministers and under the finance minister, may be more coherent.
Implementation of strategic planning has been slow, because of the lack of services needed to acquire capacity and planning skills. A three-year strategic plan is now found on the websites of all ministries, an indication of the progress made. The Recovery and Resilience Plan supplements the overall goals of planning.
However, implementation seems problematic. Since 2016, only 67% of development projects have been completed. Meanwhile, the extent to which ad hoc policies compromise the coherence of planning is an open issue.
Citations:
1. Ministry of Finance, 2020, Strategic Framework for Fiscal Policy (in Greek), http://mof.gov.cy/en/publications/strategic-framework-for-fiscal-policy
2. Many in the budget, little executed (in Greek), Philenews, 9 January 2022, https://www.philenews.com/oikonomia/kypros/article/1371523/proypologzoyn-polla-ekteloyn-lig
In line with the 2014 law on fiscal responsibility, planning and coordination of development by the DGC, headed by the secretary of the Council of Ministers and under the finance minister, may be more coherent.
Implementation of strategic planning has been slow, because of the lack of services needed to acquire capacity and planning skills. A three-year strategic plan is now found on the websites of all ministries, an indication of the progress made. The Recovery and Resilience Plan supplements the overall goals of planning.
However, implementation seems problematic. Since 2016, only 67% of development projects have been completed. Meanwhile, the extent to which ad hoc policies compromise the coherence of planning is an open issue.
Citations:
1. Ministry of Finance, 2020, Strategic Framework for Fiscal Policy (in Greek), http://mof.gov.cy/en/publications/strategic-framework-for-fiscal-policy
2. Many in the budget, little executed (in Greek), Philenews, 9 January 2022, https://www.philenews.com/oikonomia/kypros/article/1371523/proypologzoyn-polla-ekteloyn-lig
Does the government regularly take into account advice from non-governmental experts during decision-making?
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9
9
In almost all cases, the government transparently consults with non-governmental experts in the early stages of government decision-making.
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6
For major political projects, the government transparently consults with non-governmental experts in the early stages of government decision-making.
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3
In some cases, the government transparently consults with non-governmental experts in the early stages of government decision-making.
2
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1
The government does not consult with non-governmental experts, or existing consultations lack transparency entirely and/or are exclusively pro forma.
Appointments to the managing councils of public law entities include scholars. With regard to expert participation in consultative bodies created in the past, little is known about their work or fate.
Advisory bodies have long existed, although with limited tasks and scope of work, and limited to providing non-binding advice. Their voluntary work was supplementary to that of the administration.
Institutions in which experts participate, such as the Fiscal Council, the Economic Council and the Scientific Council for Research have seen their work and advice largely ignored. The new Deputy Ministry for Research and Digital Development (2020), a chief scientist and the Scientific Council for Research, appointed in 2018, are working together on research.
While the state rarely seeks experts’ advice, it has been working closely with experts on COVID-19 issues since early 2020.
Advisory bodies have long existed, although with limited tasks and scope of work, and limited to providing non-binding advice. Their voluntary work was supplementary to that of the administration.
Institutions in which experts participate, such as the Fiscal Council, the Economic Council and the Scientific Council for Research have seen their work and advice largely ignored. The new Deputy Ministry for Research and Digital Development (2020), a chief scientist and the Scientific Council for Research, appointed in 2018, are working together on research.
While the state rarely seeks experts’ advice, it has been working closely with experts on COVID-19 issues since early 2020.
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Does the government office / prime minister’s office (GO / PMO) have the expertise to evaluate ministerial draft bills according to the government’s priorities?
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9
The GO / PMO provides regular, independent evaluations of draft bills for the cabinet / prime minister. These assessments are guided exclusively by the government’s priorities.
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The GO / PMO evaluates most draft bills according to the government’s priorities.
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3
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3
The GO / PMO can rely on some sectoral policy expertise but does not evaluate draft bills.
2
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1
The GO / PMO does not have any sectoral policy expertise. Its role is limited to collecting, registering and circulating documents submitted for cabinet meetings.
Under the constitution, a line minister is fully responsible for his/her ministry. Each ministry drafts bills and forwards them to the Secretariat of the Council of Ministers, which ensures that the Law Office has checked them for legal soundness and conformity to established formats. The Secretariat offers administrative support to the cabinet’s work, forwards decisions to the competent offices and monitors implementation. According to the constitution, “the general direction and control of the government and the direction of general policy” lies with the Council of Ministers. However, the council does not possess the necessary administrative depth or mechanisms to evaluate proposals and collectively chart policy.
Some GO control lies with the minister of finance and the cabinet, under the law on fiscal responsibility. This is, however, limited to mostly budgetary issues.
Some GO control lies with the minister of finance and the cabinet, under the law on fiscal responsibility. This is, however, limited to mostly budgetary issues.
To what extent do line ministries involve the government office/prime minister’s office in the preparation of policy proposals?
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9
9
There are inter-related capacities for coordination between GO/PMO and line ministries.
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The GO/PMO is regularly briefed on new developments affecting the preparation of policy proposals.
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3
Consultation is rather formal and focuses on technical and drafting issues.
2
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1
Consultation occurs only after proposals are fully drafted as laws.
The only permanent service directly linked with the presidential palace is the Secretariat of the Council of Ministers. All other services are established ad hoc by the president in office. The tasks of the secretariat are limited to providing administrative support and checking the format of proposals. The Attorney General’s Office checks the legality of draft legislation. Ministries draft laws with reference to established policies or general frameworks decided by the cabinet. Draft laws are presented to the Council of Ministers and are only discussed during the deliberation process.
The law on fiscal responsibility assigns to the finance minister (ultimately to the Council of Ministers) control over policy proposals connected to general budgetary plans and policies. It is hard to see how under the constitution a central coordinating body with effective and comprehensive oversight powers can exist.
The law on fiscal responsibility assigns to the finance minister (ultimately to the Council of Ministers) control over policy proposals connected to general budgetary plans and policies. It is hard to see how under the constitution a central coordinating body with effective and comprehensive oversight powers can exist.
How effectively do ministerial or cabinet committees coordinate cabinet proposals?
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The vast majority of cabinet proposals are reviewed and coordinated first by committees.
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Most cabinet proposals are reviewed and coordinated by committees, in particular proposals of political or strategic importance.
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There is little review or coordination of cabinet proposals by committees.
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There is no review or coordination of cabinet proposals by committees. Or: There is no ministerial or cabinet committee.
Forming ad hoc and ministerial committees is a regular practice, which derives from the need to coordination between ministries on policies with overlapping competences. The constitutional limit of ministries (11) creates multiple overlapping areas. Existing committees deal with sector-specific matters that are within the powers of many ministries. The formulation of policy frameworks is also within their purview. Departments or technical committees mainly from within the ministries support their work; in some cases, they may seek contributions from external experts. The scope of work and degree of efficiency in committee coordination are not easy to assess, given that no activity reports are published.
Citations:
1. Cabinet decides to set up committee to aid Lebanese people, Cyprus Mail, 21 August 2021, https://cyprus-mail.com/2020/08/21/cabinet-decides-to-set-up-committee-to-aid-lebanese-people/
Citations:
1. Cabinet decides to set up committee to aid Lebanese people, Cyprus Mail, 21 August 2021, https://cyprus-mail.com/2020/08/21/cabinet-decides-to-set-up-committee-to-aid-lebanese-people/
How effectively do ministry officials/civil servants coordinate policy proposals?
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Most policy proposals are effectively coordinated by ministry officials/civil servants.
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Many policy proposals are effectively coordinated by ministry officials/civil servants.
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There is some coordination of policy proposals by ministry officials/civil servants.
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1
There is no or hardly any coordination of policy proposals by ministry officials/civil servants.
The broad area that each of the 11 ministries is responsible for has been extended to new fields since EU membership. Ministry officials and civil servants participate in ad hoc bodies or seek coordination with other ministries and formulate policy proposals. Final decisions rest with the ministers themselves, who sometimes apply political criteria. While ministers have exclusive powers within their ministry, bureaucrats have an increasingly significant role in formulating policies and proposals.
The new Directorate General of Coordination (DGC) under the Ministry of Finance may turn it into a centralized coordination body, increasing consultation and coordination between line ministries.
Citations:
1. More coordination needed to help unaccompanied minors, Cyprus Mail, 22 November 2021, https://cyprus-mail.com/2021/11/22/more-coordination-needed-to-help-unaccompanied-minors/
The new Directorate General of Coordination (DGC) under the Ministry of Finance may turn it into a centralized coordination body, increasing consultation and coordination between line ministries.
Citations:
1. More coordination needed to help unaccompanied minors, Cyprus Mail, 22 November 2021, https://cyprus-mail.com/2021/11/22/more-coordination-needed-to-help-unaccompanied-minors/
How effectively do informal coordination mechanisms complement formal mechanisms of interministerial coordination?
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Informal coordination mechanisms generally support formal mechanisms of interministerial coordination.
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In most cases, informal coordination mechanisms support formal mechanisms of interministerial coordination.
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In some cases, informal coordination mechanisms support formal mechanisms of interministerial coordination.
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1
Informal coordination mechanisms tend to undermine rather than complement formal mechanisms of interministerial coordination.
Informal meetings take place, but are not a regular practice. The practice is affected by the state of relations at the time between the government and parties. In 2020 and 2021, meetings involved COVID-19 issues, and the Recovery and Resilience Plan, among other issues.
Early party interest in the February 2023 presidential elections may lead to less formal contacts in 2022.
Citations:
1. Political party leaders meet president Anastasiades to discuss measures, Cyprus Mail, 19 March 2020, https://cyprus-mail.com/2020/03/19/political-party-leaders-meet-president-anastasiades-to-discuss-measures/
Early party interest in the February 2023 presidential elections may lead to less formal contacts in 2022.
Citations:
1. Political party leaders meet president Anastasiades to discuss measures, Cyprus Mail, 19 March 2020, https://cyprus-mail.com/2020/03/19/political-party-leaders-meet-president-anastasiades-to-discuss-measures/
How extensively and effectively are digital technologies used to support interministerial coordination (in policy development and monitoring)?
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The government uses digital technologies extensively and effectively to support interministerial coordination.
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The government uses digital technologies in most cases and somewhat effectively to support interministerial coordination.
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The government uses digital technologies to a lesser degree and with limited effects to support interministerial coordination.
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1
The government makes no substantial use of digital technologies to support interministerial coordination.
Cyprus ranks 21 in the European Union for DESI indicators, below the EU average. The Recovery and Resilience Plan dedicates significant funds for digitalization. It is expected that the new Deputy Ministry for Research and Digital Development will contribute to accelerating change.
At present, digital technology covers a small spectrum of government work and activities, while the percentage of public services delivered digitally increased from 40% in 2016 to 62% in 2021. An ERP system, which has been in development since 2018, is expected to be operational in 2022, facilitating inter-service work in accounting, payroll, pensions, budgeting and human resource management. No information is available about a comprehensive digital interministerial system.
Citations:
1. European Commission, The Digital Economy and Society Index 2021, Cyprus https://ec.europa.eu/newsroom/dae/redirection/document/80492
At present, digital technology covers a small spectrum of government work and activities, while the percentage of public services delivered digitally increased from 40% in 2016 to 62% in 2021. An ERP system, which has been in development since 2018, is expected to be operational in 2022, facilitating inter-service work in accounting, payroll, pensions, budgeting and human resource management. No information is available about a comprehensive digital interministerial system.
Citations:
1. European Commission, The Digital Economy and Society Index 2021, Cyprus https://ec.europa.eu/newsroom/dae/redirection/document/80492
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To what extent does the government assess the potential impacts of existing and prepared legal acts (regulatory impact assessments, RIA)?
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RIA are applied to all new regulations and to existing regulations which are characterized by complex impact paths. RIA methodology is guided by common minimum standards.
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RIA are applied systematically to most new regulations. RIA methodology is guided by common minimum standards.
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RIA are applied in some cases. There is no common RIA methodology guaranteeing common minimum standards.
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RIA are not applied or do not exist.
An RIA scheme was introduced in 2007 as part of a project to improve regulation. A robust RIA tool was adopted in 2016 and training programs enabled its use in 2017.
Responsibility for RIAs, placed initially under the now dissolved Unit for Administrative Reform, passed first to the Department of Public Administration and Personnel, and then, in September 2021, to the DGC. The RIA project will be reviewed in light of the European Commission’s guidelines for improving RIA schemes. This review and the transfer of responsibilities means that the project is in a transitional phase.
A critical issue seems to be the fact that policies with a broad and strong impact are not subject to RIAs. This is the case for decisions by the Council of Ministers, such as the infamous “investment program,” the granting of permits for skyscrapers against the limitations of town planning and the sale of Cypriot citizenship. The impact of such policies not only neutralizes the positive effects of RIAs, it also negates regulatory improvements.
Responsibility for RIAs, placed initially under the now dissolved Unit for Administrative Reform, passed first to the Department of Public Administration and Personnel, and then, in September 2021, to the DGC. The RIA project will be reviewed in light of the European Commission’s guidelines for improving RIA schemes. This review and the transfer of responsibilities means that the project is in a transitional phase.
A critical issue seems to be the fact that policies with a broad and strong impact are not subject to RIAs. This is the case for decisions by the Council of Ministers, such as the infamous “investment program,” the granting of permits for skyscrapers against the limitations of town planning and the sale of Cypriot citizenship. The impact of such policies not only neutralizes the positive effects of RIAs, it also negates regulatory improvements.
Does the RIA process ensure participation, transparency and quality evaluation?
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RIA analyses consistently involve stakeholders by means of consultation or collaboration, results are transparently communicated to the public and assessments are effectively evaluated by an independent body on a regular basis.
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The RIA process displays deficiencies with regard to one of the three objectives.
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The RIA process displays deficiencies with regard to two of the three objectives.
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RIA analyses do not exist or the RIA process fails to achieve any of the three objectives of process quality.
The OECD’s 2019 RIA report is the latest available assessment. It is unlikely that issues such as reduced human resources that affect implementation and monitoring have been resolved. With responsibilities recently transferred for a second time, delays and coordination issues are probable. Under the existing scheme, the impact of efforts to improve regulation have been clear. Stakeholders’ participation in the process increases the success of the assessment; RIAs are more effectively implemented when SMEs are concerned.
At present, the RIA website is under review and remains inaccessible to the public. There are plans to post on the new website all the relevant processes, information and results.
At present, the RIA website is under review and remains inaccessible to the public. There are plans to post on the new website all the relevant processes, information and results.
Does the government conduct effective sustainability checks within the framework of RIA?
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9
9
Sustainability checks are an integral part of every RIA; they draw on an exhaustive set of indicators (including social, economic, and environmental aspects of sustainability) and track impacts from the short- to long-term.
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Sustainability checks lack one of the three criteria.
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Sustainability checks lack two of the three criteria.
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Sustainability checks do not exist or lack all three criteria.
So far, assessment questionnaires inquire on positive and negative impacts of a policy proposal across various aspects of the economy, society, and environment as well as on the processes and work of the government. They also include questions on methods and processes followed, such as interactions with other ministries’ services and consultations with the public and other stakeholders.
There are three questionnaires: for new legislation or amendments, for legislation transposing EU directives into national law and for legislation ratifying international treaties.
Questions on sustainability remain exclusively economic, focusing on budgetary impacts and macroeconomic effects. An assessment of possible impacts on human rights is still absent.
There are three questionnaires: for new legislation or amendments, for legislation transposing EU directives into national law and for legislation ratifying international treaties.
Questions on sustainability remain exclusively economic, focusing on budgetary impacts and macroeconomic effects. An assessment of possible impacts on human rights is still absent.
To what extent do government ministries regularly evaluate the effectiveness and/or efficiency of public policies and use results of evaluations for the revision of existing policies or development of new policies?
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9
9
Ex post evaluations are carried out for all significant policies and are generally used for the revision of existing policies or the development of new policies.
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Ex post evaluations are carried out for most significant policies and are used for the revision of existing policies or the development of new policies.
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Ex post evaluations are rarely carried out for significant policies and are rarely used for the revision of existing policies or the development of new policies.
2
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1
Ex post evaluations are generally not carried out and do not play any relevant role for the revision of existing policies or the development of new policies.
Given the deficiencies in strategic planning, ex post evaluation has not been part of government practice. However, in reformed framework of commitments for public administration, since 2012, the government has solicited studies from the World Bank and others. These studies on public administration and line ministries aimed to restructure and reform public administration and its procedures, while also reviewing general policies. However, specific policies in ministries are not subject to evaluations and progress achieved on the basis of studies undertaken by external bodies has been slow.
While acknowledging the need that sectoral reviews should form part of strategic planning, the government still has not introduced it.
While acknowledging the need that sectoral reviews should form part of strategic planning, the government still has not introduced it.
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Does the government consult with societal actors in a fair and pluralistic manner?
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The government always consults with societal actors in a fair and pluralistic manner.
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The government in most cases consults with societal actors in a fair and pluralistic manner.
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The government does consult with societal actors, but mostly in an unfair and clientelistic manner.
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1
The government rarely consults with any societal actors.
Consultation with societal actors has been limited to a small spectrum of powerful organizations and, in any case, consultation does not reach the stage of policy formulation. When discussing a draft bill, parliamentary committees invite a broad spectrum of stakeholders to present their views. Generally, vociferous stakeholders, such as trade unions and business associations, may engage in consultations with the government and/or political parties before final policy decisions are made. They are more successful than weak groups in securing their demands.
After exiting the memorandum of understanding with its creditors, in early 2016, the government started accommodating previously rejected demands. In addition, critical reforms, such as privatizing the telecoms and electricity utilities, have been abandoned due to trade union pressure.
Public consultation before decision-making is regularly practiced by most departments. The results and impact of such consultations are usually transparent or made public.
In the RIA framework, SME representatives are systematically consulted and participate in the process as stakeholders.
The government consulted with political parties on important issues, such as the COVID-19 crisis and the elaboration of the Recovery and Resilience Plan in 2020/2021.
Citations:
1. Unions accused of unrealistic demands amidst labour shortage, Cyprus Mail, 27 October 2021, https://cyprus-mail.com/2021/10/27/unions-accused-of-unrealistic-demands-amidst-labour-shortage/
After exiting the memorandum of understanding with its creditors, in early 2016, the government started accommodating previously rejected demands. In addition, critical reforms, such as privatizing the telecoms and electricity utilities, have been abandoned due to trade union pressure.
Public consultation before decision-making is regularly practiced by most departments. The results and impact of such consultations are usually transparent or made public.
In the RIA framework, SME representatives are systematically consulted and participate in the process as stakeholders.
The government consulted with political parties on important issues, such as the COVID-19 crisis and the elaboration of the Recovery and Resilience Plan in 2020/2021.
Citations:
1. Unions accused of unrealistic demands amidst labour shortage, Cyprus Mail, 27 October 2021, https://cyprus-mail.com/2021/10/27/unions-accused-of-unrealistic-demands-amidst-labour-shortage/
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To what extent does the government achieve coherent communication?
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Ministries are highly successful in aligning their communication with government strategy.
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Ministries most of the time are highly successful in aligning their communication with government strategy.
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3
Ministries occasionally issue public statements that contradict the public communication of other ministries or the government strategy.
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1
Strategic communication planning does not exist; individual ministry statements regularly contradict each other. Messages are often not factually consistent with the government’s strategy.
Government communication with the public has been increasingly confusing in 2020/2021. In many instances, announcements about COVID-19-related measures were contradictory, while intended clarifications and exceptions spread confusion. On other issues, multiple, contradicting statements from members of the government turned coherent communication into an unattainable goal.
In 2020 and 2021, the Al Jazeera network published revelations, which a government-appointed inquiry committee and the auditor general subsequently investigated, that the president and his government were involved in corruption related to the selling of passports. Their communication performance was poor and subsequent statements that attempted to justify actions were less convincing than the initial ones. Resorting to conspiracy theories and attempting to discredit critics were subsequently belied by new information, which did not help the government’s credibility. Thus, improving public information and dispelling confusion saw little success in the period under review.
Communication on the Recovery and Resilience Plan was comparatively clear and coherent.
Citations:
1. Al Jazeera reports are propaganda, not journalism, Nouris says (Update 3), Cyprus Mail, 26 August 2021, https://cyprus-mail.com/2020/08/26/al-jazeera-reports-are-propaganda-not-journalism-nouris-says/
2. Our View: President is very skillful at passing the buck, Cyprus Mail, 22 October 2021, https://cyprus-mail.com/2021/10/22/our-view-president-is-very-skilful-at-passing-the-buck/
In 2020 and 2021, the Al Jazeera network published revelations, which a government-appointed inquiry committee and the auditor general subsequently investigated, that the president and his government were involved in corruption related to the selling of passports. Their communication performance was poor and subsequent statements that attempted to justify actions were less convincing than the initial ones. Resorting to conspiracy theories and attempting to discredit critics were subsequently belied by new information, which did not help the government’s credibility. Thus, improving public information and dispelling confusion saw little success in the period under review.
Communication on the Recovery and Resilience Plan was comparatively clear and coherent.
Citations:
1. Al Jazeera reports are propaganda, not journalism, Nouris says (Update 3), Cyprus Mail, 26 August 2021, https://cyprus-mail.com/2020/08/26/al-jazeera-reports-are-propaganda-not-journalism-nouris-says/
2. Our View: President is very skillful at passing the buck, Cyprus Mail, 22 October 2021, https://cyprus-mail.com/2021/10/22/our-view-president-is-very-skilful-at-passing-the-buck/
Graph View
To what extent can the government achieve its own policy objectives?
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The government can largely implement its own policy objectives.
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The government is partly successful in implementing its policy objectives or can implement some of its policy objectives.
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The government partly fails to implement its objectives or fails to implement several policy objectives.
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The government largely fails to implement its policy objectives.
The European Commission and the IMF considered the government’s management of COVID-19-induced economic impacts to be relatively good. They praised the containment of unemployment, which in 2021 returned to the pre-crisis rate, and the positive effects of the recovery on the current account deficit, which was affected by measures of support. Support measures were timely and funded by cushion reserves. An early recovery was a surprise, although the IMF suggests that special measures are needed in order to compensate for the uneven impact of the crisis on various groups. The European Commission points to risks from the current account deficit; inflation, which has increased due to higher energy prices; and the increase in costs for the General Health System (GESY). The European Commission also called for caution if KEDIPES is transformed into a national asset management company. It notes the expected positive impact from the implementation of the Recovery and Resilience Plan.
With the recovery that started in early 2021, the initial increase in public debt due to the introduction of support measures has receded and is expected to fall below 100% in 2022.
Despite good economic indicators, both the European Union and the IMF underline that uncertainty about how the COVID-19 crisis will develop remains a major risk for the economy.
Citations:
1. IMF, Cyprus: Cyprus 2021 Article IV Consultation – Press Release and Staff Report, June 2021, https://www.imf.org/-/media/Files/Publications/CR/2021/English/1CYPEA2021001.ash x
3. European Commission, Post_programme Surveillance Report, Cyprus, Autumn 2021, https://ec.europa.eu/info/sites/default/files/economy-finance/ip163_en.pdf
With the recovery that started in early 2021, the initial increase in public debt due to the introduction of support measures has receded and is expected to fall below 100% in 2022.
Despite good economic indicators, both the European Union and the IMF underline that uncertainty about how the COVID-19 crisis will develop remains a major risk for the economy.
Citations:
1. IMF, Cyprus: Cyprus 2021 Article IV Consultation – Press Release and Staff Report, June 2021, https://www.imf.org/-/media/Files/Publications/CR/2021/English/1CYPEA2021001.ash x
3. European Commission, Post_programme Surveillance Report, Cyprus, Autumn 2021, https://ec.europa.eu/info/sites/default/files/economy-finance/ip163_en.pdf
To what extent does the organization of government provide mechanisms to ensure that ministers implement the government’s program?
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9
The organization of government successfully provides strong mechanisms for ministers to implement the government’s program.
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6
7
6
The organization of government provides some mechanisms for ministers to implement the government’s program.
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3
4
3
The organization of government provides weak mechanisms for ministers to implement the government’s program.
2
1
1
The organization of government does not provide any mechanisms for ministers to implement the government’s program.
Under the presidential system, the appointment and dismissal of a minister are the president’s prerogative. Implementation of line ministry policies rests entirely with each minister. The list of projects and works being implemented is posted on the website of EXANDAS. The monitoring of the execution of tasks is carried out by the Secretariat of the Council of Ministers. The absence of dedicated personnel or processes for the overall assessment of ministries and public policy compliance may be due to constitutional constraints.
Monitoring within line ministries is difficult due to the very broad scope of each ministry’s competences and departmentalization. This makes planning and coordination difficult to achieve. Progress in strategic planning would benefit policy implementation and provide evaluation benchmarks. However, it seems that this is still not being done.
Monitoring within line ministries is difficult due to the very broad scope of each ministry’s competences and departmentalization. This makes planning and coordination difficult to achieve. Progress in strategic planning would benefit policy implementation and provide evaluation benchmarks. However, it seems that this is still not being done.
How effectively does the government office/prime minister’s office monitor line ministry activities with regard to implementation?
10
9
9
The GO / PMO effectively monitors the implementation activities of all line ministries.
8
7
6
7
6
The GO / PMO monitors the implementation activities of most line ministries.
5
4
3
4
3
The GO / PMO monitors the implementation activities of some line ministries.
2
1
1
The GO / PMO does not monitor the implementation activities of line ministries.
According to the constitution, the direction and control of the government and general policy lie with the Council of Ministers. This creates a circular relationship since each minister is the sole authority in her/his ministry. The DGEPCD, renamed to the DGC, has some monitoring functions, but scope its unclear. The Secretariat of the Council of Ministers monitors the implementation of cabinet decisions. The website EXANDAS offers ministers and citizens a picture of the progress of works and policies. However, visualization and figures are not an evaluation tool.
While the law on fiscal responsibility assigns the finance minister a central role in overseeing and coordinating budgetary and fiscal issues, the ultimate control lies with the Council of Ministers. No instance other than the cabinet has such powers.
Citations:
1. Project EXANDAS, https://exandas.presidency.gov.cy/
While the law on fiscal responsibility assigns the finance minister a central role in overseeing and coordinating budgetary and fiscal issues, the ultimate control lies with the Council of Ministers. No instance other than the cabinet has such powers.
Citations:
1. Project EXANDAS, https://exandas.presidency.gov.cy/
How effectively do federal and subnational ministries monitor the activities of bureaucracies/executive agencies with regard to implementation?
10
9
9
The ministries effectively monitor the implementation activities of all bureaucracies/executive agencies.
8
7
6
7
6
The ministries monitor the implementation activities of most bureaucracies/executive agencies.
5
4
3
4
3
The ministries monitor the implementation activities of some bureaucracies/executive agencies.
2
1
1
The ministries do not monitor the implementation activities of bureaucracies/executive agencies.
The Council of Ministers appoints the governing bodies of quasi-governmental institutions, approves their budget and exercises budget control. The government, strengthened by a 2014 law, has greater control over these institutions and oversight over line ministries. Reports by the audit office show that some do not submit accounts for auditing on time or point to problems of management. No data is available about the effectiveness of oversight in practice or remedies to tackle favoritism.
The situation with local authorities is no better. Despite central government control, audits identify high debt levels, disrespect for rules and procedures, and functional inadequacies. No evidence of improvement exists.
Radical reforms of public law bodies and local authorities, suggested by the European Union, IMF and specially commissioned studies have been discussed for many years. The reform of local authorities was presented to the parliament in January 2022.
Citations:
1. Cyprus blocking evolved local government, Financial Mirror, 27 October 2021, https://www.financialmirror.com/2021/10/27/cyprus-blocking-evolved-local-government/
The situation with local authorities is no better. Despite central government control, audits identify high debt levels, disrespect for rules and procedures, and functional inadequacies. No evidence of improvement exists.
Radical reforms of public law bodies and local authorities, suggested by the European Union, IMF and specially commissioned studies have been discussed for many years. The reform of local authorities was presented to the parliament in January 2022.
Citations:
1. Cyprus blocking evolved local government, Financial Mirror, 27 October 2021, https://www.financialmirror.com/2021/10/27/cyprus-blocking-evolved-local-government/
To what extent does the central government ensure that tasks delegated to subnational self-governments are adequately funded?
10
9
9
The central government enables subnational self-governments to fulfill all their delegated tasks by funding these tasks sufficiently and/or by providing adequate revenue-raising powers.
8
7
6
7
6
The central government enables subnational governments to fulfill most of their delegated tasks by funding these tasks sufficiently and/or by providing adequate revenue-raising powers.
5
4
3
4
3
The central government sometimes and deliberately shifts unfunded mandates to subnational governments.
2
1
1
The central government often and deliberately shifts unfunded mandates to subnational self-governments.
Local authorities are subject to extensive central government control. They receive substantial state subsidies, amounting in some cases up to 40% of their budget. In addition, the Council of Ministers, in particular the ministers of interior and finance, have extensive powers of control and management for the finances and assets of municipalities. Reform of the municipalities bill was presented to the parliament in early 2022, following a series of inconclusive debates since 2014. Existing plans for mergers and reorganization aim to address critical challenges facing local governments by making them more efficient (including financially), improving management, fighting corruption and upgrading the quality of services.
Citations:
1. Local government elections postponed until May 2024, Financial Mirror, 17 September 2021, https://www.financialmirror.com/2021/09/17/local-government-elections-postponed-until-may-2024/al-authority/
Citations:
1. Local government elections postponed until May 2024, Financial Mirror, 17 September 2021, https://www.financialmirror.com/2021/09/17/local-government-elections-postponed-until-may-2024/al-authority/
To what extent does central government ensure that subnational self-governments may use their constitutional scope of discretion with regard to implementation?
10
9
9
The central government enables subnational self-governments to make full use of their constitutional scope of discretion with regard to implementation.
8
7
6
7
6
Central government policies inadvertently limit the subnational self-governments’ scope of discretion with regard to implementation.
5
4
3
4
3
The central government formally respects the constitutional autonomy of subnational self-governments, but de facto narrows their scope of discretion with regard to implementation.
2
1
1
The central government deliberately precludes subnational self-governments from making use of their constitutionally provided implementation autonomy.
The constitutional status of local government is vague. Placed originally under the authority of the Communal Chambers (Art. 86-111), which were abolished in 1964, local authorities are governed by the Law on Municipalities of 1985. Local authorities possess limited competences because constitutional clauses allow the central government to impose restrictions on their powers. Budgets and management decisions on a variety of financial issues and assets are subject to approval by the Council of Ministers. Additionally, the law on fiscal responsibility (20(I)/2014) imposes strict budget controls by the finance minister. In order to proceed with the reforms, which under law require local approval via referendums, the executive and the parliament suspended the 2021 elections and by-passed the law provisions for referendums.
The situation that has prevailed over the years has been one in which local authorities have not made good use of their (limited) autonomy.
Citations:
1. Municipal elections postponed, Cyprus Mail, 16 September 2021, https://cyprus-mail.com/2021/09/16/municipal-elections-postponed/
The situation that has prevailed over the years has been one in which local authorities have not made good use of their (limited) autonomy.
Citations:
1. Municipal elections postponed, Cyprus Mail, 16 September 2021, https://cyprus-mail.com/2021/09/16/municipal-elections-postponed/
To what extent does central government ensure that subnational self-governments realize national standards of public services?
10
9
9
Central government effectively ensures that subnational self-governments realize national standards of public services.
8
7
6
7
6
Central government largely ensures that subnational self-governments realize national standards of public services.
5
4
3
4
3
Central government ensures that subnational self-governments realize national minimum standards of public services.
2
1
1
Central government does not ensure that subnational self-governments realize national standards of public services.
Standards and indicators at the central government level often lack consistency and universality. Reform of local government was at an advanced stage in January 2022. In order to abide by the rules and standards, the Ministry of Finance issues guidelines for each category of public institution regarding budget design and strategic planning. These guidelines set general standards and procedures, in particular on fiscal issues. The persistence of problems is an indication that proper implementation remains an issue.
Serious problems in local government have led to a process of reform since 2014. Among other issues, the auditor general pointed in his 2016 report to disregard for standards and procedures, stressing that “the situation in municipalities is not viable.”
In order to assist subnational entities, the Ministry of Finance annually reports on issues of fiscal risk facing each sector. Proposals for anticipating and addressing problems, and minimizing risks are part of them. For example, guidance is offered, among other things, on how to avoid risks related to unguaranteed loans, financial claims before the courts and excessive expenses.
Citations:
1. Miistry of Finance, Report on Fiscal Risks, September 2021, http://mof.gov.cy/assets/modules/wnp/articles/201705/301/docs/2021_09_17_frs_2021.pdf
Serious problems in local government have led to a process of reform since 2014. Among other issues, the auditor general pointed in his 2016 report to disregard for standards and procedures, stressing that “the situation in municipalities is not viable.”
In order to assist subnational entities, the Ministry of Finance annually reports on issues of fiscal risk facing each sector. Proposals for anticipating and addressing problems, and minimizing risks are part of them. For example, guidance is offered, among other things, on how to avoid risks related to unguaranteed loans, financial claims before the courts and excessive expenses.
Citations:
1. Miistry of Finance, Report on Fiscal Risks, September 2021, http://mof.gov.cy/assets/modules/wnp/articles/201705/301/docs/2021_09_17_frs_2021.pdf
To what extent is government enforcing regulations in an effective and unbiased way, also against vested interests?
10
9
9
Government agencies enforce regulations effectively and without bias.
8
7
6
7
6
Government agencies, for the most part, enforce regulations effectively and without bias.
5
4
3
4
3
Government agencies enforce regulations, but ineffectively and with bias.
2
1
1
Government agencies enforce regulations ineffectively, inconsistently and with bias.
General government policies and practices appear fair. However, a bias toward serving the interests of powerful economic groups and individuals as well as bowing to the demands of strong trade unions becomes evident when the stakes are high. Also, both the government and political parties often act on the basis of political expediency: to avoid confrontation with strong formal or informal interest groups, they resort to procrastination, adopt rules that are either ineffective, or simply avoid decision-making. The public good is, thus, not fairly served and lingering governance challenges persist.
The most notable example in recent years were policies presented in the form of an investment scheme, which in reality involved selling passports to the benefit of certain groups. This activity continued even after being officially terminated. In addition to ethical questions, risks of corruption and money laundering, this policy undermined town planning and other laws. Other decisions, under the pretext of development, are contradict the decisions of other authorities, as well as obligations to protect the environment and care for natural resources. In the financial sector, decisions and laws on foreclosures and non-performing loans are passed with amendments by parties serving strategic defaulters.
The abandonment of some reforms and the very slow pace of others are indicative of a policy bias in the government and among parties to avoid any political costs.
Citations:
1. Cyprus awaits Brussels decision on golden passports, KnewKathimerini, 8 November 2021, https://knews.kathimerini.com.cy/en/news/cyprus-awaits-brussels-on-golden-passports
2. Ministry defends decision to green light multi-story building in down town Nicosia, Cyprus Mail, 21 December 2021, https://cyprus-mail.com/2021/12/21/ministry-defends-decision-to-green-light-multi-story-building-in-down-town-nicosia/
The most notable example in recent years were policies presented in the form of an investment scheme, which in reality involved selling passports to the benefit of certain groups. This activity continued even after being officially terminated. In addition to ethical questions, risks of corruption and money laundering, this policy undermined town planning and other laws. Other decisions, under the pretext of development, are contradict the decisions of other authorities, as well as obligations to protect the environment and care for natural resources. In the financial sector, decisions and laws on foreclosures and non-performing loans are passed with amendments by parties serving strategic defaulters.
The abandonment of some reforms and the very slow pace of others are indicative of a policy bias in the government and among parties to avoid any political costs.
Citations:
1. Cyprus awaits Brussels decision on golden passports, KnewKathimerini, 8 November 2021, https://knews.kathimerini.com.cy/en/news/cyprus-awaits-brussels-on-golden-passports
2. Ministry defends decision to green light multi-story building in down town Nicosia, Cyprus Mail, 21 December 2021, https://cyprus-mail.com/2021/12/21/ministry-defends-decision-to-green-light-multi-story-building-in-down-town-nicosia/
Graph View
To what extent does the government respond to international and supranational developments by adapting domestic government structures?
10
9
9
The government has appropriately and effectively adapted domestic government structures to international and supranational developments.
8
7
6
7
6
In many cases, the government has adapted domestic government structures to international and supranational developments.
5
4
3
4
3
In some cases, the government has adapted domestic government structures to international and supranational developments.
2
1
1
The government has not adapted domestic government structures, no matter how beneficial adaptation might be.
Numerous studies have been conducted in the last decade, which to support reform. Some included proposals to overcome the limitations imposed by the rigid structures of the 1960 constitution, while others aimed at introducing innovative changes. There has been little progress, despite the European Union and IMF repeatedly urging for reform.
Changes brought about by EU accession, with the introduction of new institutions and practices, have not been fully productive. In addition, as a single region under the European Union’s “cohesion policy,” Cyprus has not benefited significantly from relevant EU policies.
Reforms suggested since 2013, including tackling governmental structures and entrenched mentalities, have shown little progress. Attempts to increase strategic planning capacity, promote administrative reforms that will change administrative practices and culture, and promote meritocracy have started to produce results.
The renewal of government efforts to reform local authorities and the judiciary in the fall of 2019 have made progress, though the results are not conclusive yet. The dissolution in 2018 of the Unit for Administrative Reform points to the need for a centralized coordinating body, which may be the DGC (formerly DGEPCD) for some issues.
Citations:
1. Another 85 million by February if Cyprus meets deadline of key reforms, KnewsKathimerini, 22 September 2021, https://knews.kathimerini.com.cy/en/news/cyprus-must-meet-deadline-of-key-reforms-to-receive-the-next-85-million-from-the-eu
Changes brought about by EU accession, with the introduction of new institutions and practices, have not been fully productive. In addition, as a single region under the European Union’s “cohesion policy,” Cyprus has not benefited significantly from relevant EU policies.
Reforms suggested since 2013, including tackling governmental structures and entrenched mentalities, have shown little progress. Attempts to increase strategic planning capacity, promote administrative reforms that will change administrative practices and culture, and promote meritocracy have started to produce results.
The renewal of government efforts to reform local authorities and the judiciary in the fall of 2019 have made progress, though the results are not conclusive yet. The dissolution in 2018 of the Unit for Administrative Reform points to the need for a centralized coordinating body, which may be the DGC (formerly DGEPCD) for some issues.
Citations:
1. Another 85 million by February if Cyprus meets deadline of key reforms, KnewsKathimerini, 22 September 2021, https://knews.kathimerini.com.cy/en/news/cyprus-must-meet-deadline-of-key-reforms-to-receive-the-next-85-million-from-the-eu
To what extent is the government able to collaborate effectively with international efforts to foster global public goods?
10
9
9
The government can take a leading role in shaping and implementing collective efforts to provide global public goods. It is able to ensure coherence in national policies affecting progress.
8
7
6
7
6
The government is largely able to shape and implement collective efforts to provide global public goods. Existing processes enabling the government to ensure coherence in national policies affecting progress are, for the most part, effective.
5
4
3
4
3
The government is partially able to shape and implement collective efforts to provide global public goods. Processes designed to ensure coherence in national policies affecting progress show deficiencies.
2
1
1
The government does not have sufficient institutional capacities to shape and implement collective efforts to provide global public goods. It does not have effective processes to ensure coherence in national policies affecting progress.
The proclaimed role of Cyprus as a bridge between three continents draws on its geographical location. However, the almost exclusive focus on and preoccupation with domestic issues has prevented initiatives to broaden the country’s role. Opportunities offered through membership in the European Union, United Nations and other organizations could assist Cyprus to be a valuable contributor to both regional and global politics, benefiting public welfare. In recent years, particular focus on bi- and trilateral relations have aimed to coordinate the exploitation of hydrocarbons in the Eastern Mediterranean. More recently, cooperation with neighboring countries has focused on issues of climate change.
Existing conflicts in the region are partly fueled or affected by hydrocarbon exploration, which makes it difficult to secure a better environment for all. The Cyprus conflict occupies a central role in existing problems.
Citations:
1. Turkey slams Cyprus over exploration license for Exxon, Qatar Petroleum in Mediterranean, 2 December 2021, https://www.reuters.com/markets/commodities/turkey-slams-cyprus-over-exploration-license-exxon-qatar-petroleum-mediterranean-2021-12-02/
Existing conflicts in the region are partly fueled or affected by hydrocarbon exploration, which makes it difficult to secure a better environment for all. The Cyprus conflict occupies a central role in existing problems.
Citations:
1. Turkey slams Cyprus over exploration license for Exxon, Qatar Petroleum in Mediterranean, 2 December 2021, https://www.reuters.com/markets/commodities/turkey-slams-cyprus-over-exploration-license-exxon-qatar-petroleum-mediterranean-2021-12-02/
Graph View
To what extent do actors within the government monitor whether institutional arrangements of governing are appropriate?
10
9
9
The institutional arrangements of governing are monitored regularly and effectively.
8
7
6
7
6
The institutional arrangements of governing are monitored regularly.
5
4
3
4
3
The institutional arrangements of governing are selectively and sporadically monitored.
2
1
1
There is no monitoring.
The main structures and institutions of 1960 remain largely unchanged. Reform efforts usually commence when systemic dysfunction reaches a critical level and progress moves forward at a very slow pace. This is due to the rigidity of the constitution and the absence of institutional monitoring. A centralized unit for reform, operative between 2014 and 2019, produced some results, mostly in improving procedures. The reassignment of tasks from the centralized unit for reform back to line ministries followed. Meanwhile, the absence of a coordination body makes reforms harder to implement, given that self-monitoring in line ministries is weak or absent.
Several outsourced studies and surveys have been conducted since 2012, which have identified problems and proposed reforms. However, this has not compensated for the absence of self-monitoring mechanisms.
Several outsourced studies and surveys have been conducted since 2012, which have identified problems and proposed reforms. However, this has not compensated for the absence of self-monitoring mechanisms.
To what extent does the government improve its strategic capacity by changing the institutional arrangements of governing?
10
9
9
The government improves its strategic capacity considerably by changing its institutional arrangements.
8
7
6
7
6
The government improves its strategic capacity by changing its institutional arrangements.
5
4
3
4
3
The government does not improve its strategic capacity by changing its institutional arrangements.
2
1
1
The government loses strategic capacity by changing its institutional arrangements.
Efforts to improve the efficiency of the administration, stalled for years, resumed in fall 2019 and reform plans were again promoted. In addition to pursuing goals to improve the selection and promotion of personnel, and speed up procedures, four new deputy ministries have been established. The long-standing local government reform seems to be nearing adoption by the parliament.
The challenge of expanding strategic planning capacities shows some progress beyond that of the required training of professional personnel; most ministries have drafted a three-year strategic plan.
The challenge of expanding strategic planning capacities shows some progress beyond that of the required training of professional personnel; most ministries have drafted a three-year strategic plan.