European Commission satisfied with Cyprus' fiscal policy
Brussels, Jan 24 - The European Commission is satisfied with Cyprus’ fiscal policy which it described as ''healthy.''
Commissioner for Economic and Monetary Affairs, Mr. Joaquin Almunia, also welcomed the adoption of Cyprus' convergence program, and told journalists that Cyprus is purifying its public finances at a good rate. It is expected to reduce its national debt below 60% of GDP (Gross Domestic Product).
Asked about Cyprus' aim to join the Economic and Monetary Union on 1 January 2008, he said that Cyprus must submit the official application to enter the Eurozone by the end of March 2007. This will allow the Commission to draft a report with its proposal to the Council by May. The decision will be taken before June.
The Commissioner also pointed out that the collective government deficit and the gross debt are expected to drop to 0.1% and 46.1% of GDP respectively by 2010, from 1.9% and 64.7% respectively in 2006.
The gross debt of the collective government is expected to come close to 60% of GDP by 2007 and continue to drop over the next years. However, the public cost from the population’s aging is expected to be so great that Cyprus is facing a high risk regarding the long-term sustainability of public finances.