Shortly after the March 15, 2013 Eurogroup decision that proposed a haircut on all bank deposits in Cyprus in order to recapitalise local banks was rejected by the House, a government bill creating a National Solidarity Fund was voted into law. The fund’s aim was to attract sufficient funds to recapitalise the banks – whose needs were estimated at €5.3 billion – and contribute to government finances. Unimpressed by the grand visions, the Troika of international lenders declined to include the fund into the calculation of Cyprus’ financing needs as it found it impossible to estimate possible cash inflows.

According to daily publication POLITIS, a year on, the fund has attracted a mere €22,000, of which €19,000 collected by Cypriot expats, roughly €2,000 raised at an event organised by a Cyprus embassy abroad, and a monthly €200 contribution from an anonymous pensioner. Ruling DISY MP Kyriacos Hadjiyiannis said that words have once again proven worthless. “The patriotism voiced a year ago from everyone who was willing to contribute and save the country and the economy through donations never materialised,” he said. EDEK MP Nikos Nikolaides conceded the failure but accused the government for inaction. “The government should have moved to secure the fundsfor what we hoped and expected would have been a vital financial contribution,” he said.

The second fund, introduced in January 2014 as a measure to enhance employment and social cohesion, has a balance of zero, prompting Politis to note that even the MPs who voted for the creation of the fund failed to contribute to it. The bill creating the Solidarity Fund, as it became known, was submitted last December by socialists EDEK with a proposed one-off contribution from public and private employees’ 13th salary, only to be rejected by other parties. A watered-down version of the bill was eventually passed providing for no mandatory contributions and relying exclusively on donations and government grants. AKEL MP Antros Kafkalias said there was intention to review the plan in order to ensure that the funds meet their purpose soon. “While it’s true that our plans haven’t paid off yet, this is an issue we will be re-examining shortly, in order to establish why it didn’t work as planned – or as we had committed to the public,” he said.

But despite the negligible amount collected thus far, the Finance ministry must utilise the money somehow. At the suggestion of the First Lady, who had been informed of some interest to contribute and sought a legal way of funnelling donations, the government is leaning towards using the money to help groups not legally entitled to government assistance, e.g. students who are forced to interrupt their studies due to financial difficulty.

Source: Cyprus Mail