AS THE government yesterday released details of its pre-accession economic programme (PEP), the EU said it was worried about the current account deficits of some candidate countries following their individual submissions.
A statement issued in Stockholm by the Swedish EU presidency called on the countries, mainly from Eastern Europe and the former Soviet Union, to attract investment through further reforms.
“There was a certain degree of concern about the financing of current account deficits,” the statement said. “There is a need for reforms to create an investment-friendly environment and to raise domestic savings in order to diversify the forms of financing.”
The statement was released in connection with the presentation of PEP programmes for half of the 12 candidate countries – Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary and Latvia. The statement did not specify whether Cyprus was among the countries about which the EU was concerned.
Cyprus yesterday released details of its submission, which was officially handed to the EU in May.
According to the PEP projections, the rate of economic growth during 2000-2004 would be around 4.5 per cent in real terms, resulting in a further convergence with the average standard of living of EU member states.
Export of services will continue to be the main fuel to growth, while unemployment is expected to be contained at three per cent. The rate of inflation is projected at two per cent, excluding the temporary effects from the planned increases of indirect taxes.
The released document says the island’s current account balance was expected to exhibit a favourable trend and record a steady improvement from a deficit of 5.2 per cent of GDP in the year 2000 to a near-balanced budget by 2004.
“According to the projections of the PEP, the satisfaction of the convergence criteria as set by the Maastricht Treaty is considered to be both realistic and feasible,” the document said.
“We have examined the key economic challenges that the candidate countries are facing, including the challenges for fiscal policies, appropriate exchange rate arrangements and the need for labour market reforms,’ said Sven Hegelund, State Secretary and chairman of the meeting between the EU presidency and top officials from the applicant countries.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
