Cyprus-Forum.com

[Cap]

EU takes Cyprus off deficit watch

CYPRUS was one of four EU countries that need to take no further steps to curb their budget deficits under rules on government finances, the bloc said yesterday.

"The Commission concluded that on the basis of currently available information Cyprus, Finland, Bulgaria and Denmark have taken action representing adequate progress toward the correction of the excessive deficit," it said in a statement.

The EU's stability and growth pact requires governments to maintain public deficits below 3.0 per cent of gross domestic product and a debt level below 60 per cent of GDP.

The Commission said: ''Following the expiry of the usual six-month period after the Council’s recommendation, the Commission has made an assessment of the action taken by Cyprus, Finland, Bulgaria and Denmark in response to the Council recommendation of July, 13, 2010, with a view to bringing an end to their situation of excessive government deficit.''

The Commission noted that it would continue to closely monitor budgetary developments in accordance with the Treaty and the provisions of the Stability and Growth Pact.

Cyprus was placed on the excessive deficit watch list last year. The island was told by the EU to incrementally cut its deficit to below the euro zone threshold of 3.0 per cent by 2012, from an expected 5.5 per cent of GDP in 2010.

Cyprus expects economic growth of 1.5 percent in 2011, and forecasts that the public deficit will fall below 4.0 per cent.

Yesterday’s decision will come as welcome news to Finance Minister Charilaos Stavrakis who has been battling with negative developments from the three international ratings agencies, and domestic criticism for the government’s economic policies. However he did not comment on the news out of Brussels yesterday afternoon.

Earlier it the day he came under a barrage of criticism for his ‘over optimistic’ views on the state of the economy, after announcing on Wednesday that Cyprus was emerging from the crisis with a good growth rate and lower deficit than expected.

DISY’s Lefteris Christoforou called on the minister to stop looking at the state’s finance’s from his ministry’s windows and take to the streets to understand what is really going on.

“I am calling on the minister, instead of standing at his window and watching everything from the comfort of his office, to visit all the districts - the rural and mountainous areas, the farmers, the refugees and all the households that are suffering - and see the real problems of the true economy,” said Christoforou.

“Once again, the government and Finance Minister are congratulating themselves that there are no problems and that the Cypriot economy has emerged from the crisis, instead of looking to the real problems.”

Christoforou wondered how Stavrakis could see the situation as being so great, when unemployment was rising, the constructions sector was experiencing its worst year yet, and more pensioners were living under the poverty line.

“If there isn’t a crisis, why is the government continuing to enforce taxes upon taxes on the Cypriot public,” said Christoforou.

House Finance Committee Chairman, DIKO’s Nicolas Papadopoulos, agreed. “It is a fact that the Finance Minister is especially ambitious over the economy and we don’t share this enthusiasm,” said Papadopoulos. “The structural problems of the economy remain and this has been seen by all the independent experts and agencies who have already undermined our assessments.”

He called on Stavrakis to “stop pretending that it is all okay, and take measures, especially in regards to reducing the public sector, improving the pensions scheme and reducing the state’s operational costs”.

But ruling party AKEL’s Yiannos Lamaris wondered why everyone was so “annoyed” with the minister’s ambition.

“After ten months of painting the bleakest of pictures for our economy and accusing the government of being inactive, predicting the deficit would surpass 7.5 per cent and growth rate would be as low as 0.3 per cent - now that the deficit has been restricted to 5.5 per cent, and growth rate has reached 0.8 per cent, they remembered the pensioners; forgetting that the majority of them wanted to extend the retirement age to 65. They wanted to cut social benefits and other socially-orientated measures by the government, in parallel with the economic recovery measures,” said Lamaris.

He accused the two parties of being populist. “We need to look at the sincerity of these people. They pretend to care about the increase in unemployment, when they actually proposed to the plenum a freeze on employment in the public sector, which led to hundreds of temporary and hourly-paid workers being fired with scarce opportunity of being appointed any time soon - thus leading to unemployment and stopping consturctions in hundreds of communities. This is the sincerity with which these people deal with the state’s finances.”

http://www.cyprus-mail.com/cyprus/eu-ta ... h/20110128

[CBBB]

If it looks like bullshit and smells like bullshit, then it is bullshit!

[Cap]

lol, I thought the same. BUT... we're just a drop in the ocean... What, pray tell does the EU stand to gain? Zilch.

[CBBB]

When the Cypriot economy goes completely down the tubes what will it cost the EU? All they would need to do to cover it would be to stop one Euro MP from fiddling his expenses!

[B25]

CBBB, don't be such a pessimist. Its good for the country to be officially doing good.

And we achieved it with 37% of our country under foreign military occupation whilst supporting lazy MF TCs who make no contribution to the tax man and deny us our property rights.

Phew! Roll on RoC.

[CBBB]

CBBB, don't be such a pessimist. Its good for the country to be officially doing good.

And we achieved it with 37% of our country under foreign military occupation whilst supporting lazy MF TCs who make no contribution to the tax man and deny us our property rights.

Phew! Roll on RoC.

Not wishing to bring the Cyprus Problem into General Chat (for the obvious reasons which were recently pointed out), I will say that Cyprus has done very well under the conditions you mention, but the economy is screwed because elections are fought on only one issue and all the other problems we face are just ignored.

[B25]

CBBB, don't be such a pessimist. Its good for the country to be officially doing good.

And we achieved it with 37% of our country under foreign military occupation whilst supporting lazy MF TCs who make no contribution to the tax man and deny us our property rights.

Phew! Roll on RoC.

Not wishing to bring the Cyprus Problem into General Chat (for the obvious reasons which were recently pointed out), I will say that Cyprus has done very well under the conditions you mention, but the economy is screwed because elections are fought on only one issue and all the other problems we face are just ignored.

I wasn't bring in the Cyprob, I was stating a condition, which just happens to coincide with the cyprob. I gues a quick apology to the admin would be in order all the same. Apologies.

[Cap]

Dude, apologize to no one.

B25 for president. You gotto love the dude.