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Cyprus launches euro campaign
2006-05-31 17:16:37

Nicosia, May 31 - Cyprus President Tassos Papadopoulos has launched a campaign on the Euro saying, ''the advantages of introducing the Euro are clear and indisputable.''

He dismissed fears that prices would go up overnight due to profiteers taking advantage over the currency switch.

''The experience of countries that have adopted the Euro indicates that this fear is unfounded and exaggerated,'' he added.

The President also said the time of accession into the Eurozone is not determined by the government.

Assuring that social benefits will not be sacrificed in efforts to join the Eurozone, he underlined that it was not by choice that the government decided to apply for accession to the Eurozone but because it was compulsory.

He also noted that with austerity measures, controlling expenses and not introducing new taxes, the government was able over the past two years to restrict the fiscal deficit from 6.3% to 2.4%, noting that it will be further reduced to 2% by the end of 2006.

Social benefits rose by 9%, while the public debt ratio went down from 71.7% in 2004 to 70.3%, he said and expressed hope that by 2009 it will be reduced to 53.6%.

President Papadopoulos also noted that there is concern that social benefits will be reduced once the Euro comes into place therefore it would be better to postpone accession into the Eurozone.

But, he stressed, ''accession into the Eurozone is not determined by us, nor can its timing be moved according to our will, by one or two years.''

He assured that ''this government will not sacrifice the social state or restrict social benefits to low income classes, to achieve the aim of Eurozone accession, however important this aim is.''

On concerns that the introduction of the Euro will mean an increase in prices, President Papadopoulos said that experience from other countries shows that these concerns ''are unfounded and exaggerated.''

The island's biggest party, AKEL, wants to delay adoption of the Euro by one year to ease the burden of transition on lower income earners.

Minister of Finance Michalis Sarris reiterated that the target date is 1st January 2008.

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