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New Austerity measures announced by Finance Minister Kikis Kazamias
2011-12-02 12:38:20

A decision to implement financial consolidation measures was reached today during a meeting at the Presidential Palace aimed at finding ways to reduce Cyprus' fiscal deficit lower than 2.8% of GDP.

The decision was announced by Minister of Finance, Kikis Kazamias who pointed out that by embarking upon this new series of measures "Cyprus is also showing to the outside world its determination to make every effort possible to solve its fiscal problems on its own."

He further noted that these measures will convince the European Union that public spending will not increase in the coming two years, in order for Cyprus to focus on expanding its economic growth rate.

Mr. Kazamias also appeared optimistic that Cyprus will avoid resorting to the European Stability Mechanism, adding that every effort is being made to finalize the relevant draft bills by December 8, 2011.

As he noted, Cyprus’ obligation towards the EU, apart from approving the state budget for 2012, is to present a convincing medium-term program concerning its public finances.

Speaking on growth,Mr. Kazamias noted that outside estimates are not very positive, adding that they must be disproved, since an increase in the growth rate by 1% equals further state revenue, worth 200 million euros.

He noted, moreover, that the tax collecting capacity of the state needs to increase, whilst adding that eliminating tax evasion comprises the “second pillar” of today’s decisions, along with the contribution of private sector workers. The “third pillar”, according to Mr. Kazamias, is a focus on growth.

As the Minister put it, "if we resolve our domestic problems we will be better off to deal with and any external risks to our economy."

Responding to relevant questions, Mr. Kazamias explained that some measures will be forwarded to the House of Representatives immediately, to have the draft bills ready by December 8 and submit them to the House, along with the state budget.

He added that a special committee, chaired by him and attended by party representatives, will discuss further measures with the aim of boosting development, measures, which, according to him, may take more time to develop and may extend to the beginning of next year.

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