Following the fierce backlash sparked by appointments to quasi-governmental organizations, the European Union is now stepping forward. According to the newspaper Politis, as part of the European Semester and efforts to improve economic performance, it is advising Cyprus to move forward with changes to the way parastatal organizations and state-owned enterprises are managed, emphasizing merit-based selection processes for boards of directors.
“Cyprus has room to improve the governance of state-owned enterprises. These enterprises play a central role in key sectors of the economy, particularly in industries characterized by natural monopolies.” European Commission
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Indeed, as noted, their governance falls short of international standards, while weaknesses are observed in terms of accountability, transparency, and procedures for appointing board members, and notes the absence of a clear policy regarding their ownership structure. The text includes references to an action plan for the governance of state-owned enterprises.
“The effective implementation of the recently approved action plan for the governance of state-owned enterprises could help address these challenges and improve the performance of state-owned enterprises, support their modernization, and strengthen their contribution to achieving strategic policy objectives, including the green and digital transitions.” European Commission
Conclusions also reached by the International Monetary Fund starting in 2023, noting that appointments should be guided by merit and the operational needs of the organizations. It proposed the creation of a fully institutionalized framework for candidates, with clear procedures and evaluations based on the qualifications and needs of each organization. Even regarding the establishment of the advisory council, the fund noted that it was a positive step, while insisting, however, on the institutionalization of an independent and transparent process.
See the report by Nasia Ioannou
