IT EMERGED today that the Cyprus government is considering selling state property and issuing bonds to raise the €200 million it owes to the Social Security Fund. Once the debt has been cleared the Fund should grow to create a reserve of more than €1 billion in the next five years.
One luminary in the property business suggested recently that the government should consider using a small amount of money from the Social Security Fund (a figure of €300 million was mentioned) to help Cyprus’ beleaguered building industry. But considering that the government is already in debt to the Fund to the tune of €200 million, I cannot see this suggestion being received positively.
The Cyprus government owns a significant amount of property that is surplus to requirements and its sale could make an important contribution to resolving the Government’s budget problems. However, given the current state of the Cyprus property industry, putting a further €200 million worth of state-owned property on the market could well result in depressing prices even further and lead to more financial problems in the ailing construction sector.