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Cyprus News Agency: News in English, 11-11-11

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From: The Cyprus News Agency at <>




    The prospects of the Cyprus economy during 2012, are not favourable, said here Friday Finance Minister Kikis Kazamias.

    In a speech at a conference on the Cypriot Economy, Kazamias further said that Cyprus is expected to be negatively affected by developments in the Greek economy.

    He also said that resorting to the European Financial Stability Facility (EFSF) should be a last option and every effort should be made to avoid that.

    In his speech, Kazamias said that we all acknowledge the difficult time the economy of Cyprus is undergoing``, noting that Cyprus is facing very serious challenges.

    He said that the degree of impact of the financial crisis on the real economy differs from country to country, adding that the overall assessment for Cyprus is that it has not been directly affected by the crisis, mainly due to the negligible exposure of its financial system to toxic products.

    He went on to say that Cyprus has been indirectly affected by the crisis in specific areas due to the fact that countries with which Cyprus has traditional economic relations have been affected.

    Kazamias said that the adverse effects of the global economic and financial crisis led to the reversal of Cyprus budget balance, which have moved from surplus in 2008 to deficit in 2009, mainly due to the massive shortfall in government revenues, particularly those related to the property sector.

    He added that the fact that the government adopted an expansionary fiscal policy, aimed at stimulating investment and demand as well as social cohesion, further burdened the fiscal balance.

    He said that the deterioration of public finances, inter alia, resulted in the accession of Cyprus to the Excessive Deficit Procedure, which involves continuous monitoring by EU and mandatory compliance with specific financial goals and timetables.

    Regarding the current economic situation, Kazamias said that despite the negative economic environment, Cyprus economy showed a positive growth rate of 1.5% in the first half of 2011.

    Kazamias also said that the island`s gross domestic product growth will reach 0.5 percent this year and 0.2 percent in 2012, and saw this year`s fiscal deficit slightly lower than 6 percent of GDP, saying the government was committed to bringing it below 3.0 percent next year.

    In relation to the challenges facing the financial system of Cyprus, he said that the main objective is to raise capital base until June 2012, as provided by the recent decisions taken by Eurozones Heads of State and government.

    Finance Minister said that Cyprus will support recapitalisation efforts of its Greek debt-laden banks but only after they exhaust their own efforts, and even though the state`s present capabilities were limited.

    Cypriot banks must increase their core tier 1 capital to over 9.0 percent by June 2012.

    Kazamias stressed that the main problems we need to address in the near future is to strengthen economic growth, reduce the budget deficit and improve the competitiveness of Cyprus economy.

    Referring to the recent downgrades of the economy by the international rating agencies, which affect the access of Cyprus in international bond markets, Kazamias said the rating agencies stress that in order for Cyprus economy credit rating to be stabilized the 2012 Budget must be passed as well as the additional fiscal measures promoted by the Government.

    He said that we all need to take these rating agencies reports very seriously.


    New measures aiming to constrain public expenditure and consolidate public finances are discussed at a Cabinet convention Friday afternoon. The Ministerial Council is also expected to take decisions regarding social benefits.

    President of the Republic, Demetris Christofias said on Wednesday that the Cabinet will be called upon to decide on new measures and the targeting of social benefits.

    President Christofias underlined that Government is working methodically with a clear view not to burden the lower income citizens.

    Finance Minister Kikis Kazamias in a statement to the Press on Thursday said that the Cabinet will conclude Friday discussion on the targeting of social benefits, and the bill will be submitted to the Parliament on Monday. The Government estimates that the measure will lead to a saving of around 200 million euros per year in a time when international rating agencies warn of the need to consolidate public finances and restrain public deficit, whereas the European Commission requests that measures be adopted prior to December 15, to ensure budget deficit reduction below 3% of GDP by 2012.


    President of the Republic Demetris Christofias has said that sixty six years after the end of the Second World War, the people of Cyprus are still struggling to liberate and reunite their country.

    Addressing a ceremony in the honour of Remembrance Day, organized by the Cyprus World War II Veterans Association, Christofias noted that despite difficulties and obstacles in our way, we have patience and continue to struggle with a view to achieve a viable and functional settlement, that will terminate the occupation and reunite out homeland and our people.

    He stressed that the settlement must restore human rights of all the people of Cyprus and must be based on the international and the European law.

    Christofias said that all political parties must give the message to the people of Cyprus and the international community that Cyprus can and must reunite on the basis of a bizonal, bicommunal federation, with political equality, as defined by UN Security Council resolutions, with a single sovereignty, a single citizenship and a single international personality.

    Christofias also stressed that it is our obligation to remember and honour those who struggled and sacrificed themselves for the universal ideals of freedom, democracy and human dignity, contrary to the scourge of Hitlers fascism and expansionism.


    Cyprus EU Presidency the second half of 2012, is a challenge for the executive and judicial power in the Cyprus Republic but also a great opportunity to promote the Cyprus problem, the need to give an end to the illegal Turkish occupation, to restore the human rights in the country and to reach a solution based on the international law and the EU principles, House President Yiannakis Omirou said on Friday.

    Speaking to House officers during a meeting in order to discuss the preparations for the Presidency and the role of the Cyprus Parliament, Omirou said that EU Presidency is a historic moment for Cyprus, because our country will preside the big European family, noting also that the Parliament has a very significant role to play.

    He said that Cyprus might be a small country, with little experience in EU institutions, however it has a lot of knowledge and understanding of how international institutions operate, through its long participation.

    The message we must put across is a message of a reliable, responsible and credible member state and a credible Parliament, expressing the confidence that with a proper preparation, taking the right initiatives and keeping the deadlines, we will achieve our goals.

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