Central Bank backs austerity plan

THE Central Bank Governor yesterday expressed his support for the measures proposed by the government to boost the economy and achieve convergence with the Maastricht criteria.

“What is being attempted by the Finance Minister is not easy, because it signifies certain consequences and certain costs. Everyone should realise that if we do not have them today, we will have them in a bigger scale in the near future and it is for these reasons I agree that the Finance Minister should be supported,” said Christodoulos Christodoulou.

He was answering questions following a meeting with Finance Minister Makis Keravnos, during which the two men exchanged views on the economy and more specifically about the convergence programme submitted by the government.

Keravnos said he briefed the Governor about the measures and the contacts he had had with various officials in the past few days.

Asked about the type of support he expected from the Central Bank, Keravnos said currency and public finances policies constituted a vital part of overall economic policy.

“Thus reciprocal briefings and the exchange of views and co-ordination of efforts between the Central Bank and the Finance Ministry are very important,” the minister said.

Christodoulou added that their approach on what needed to be done to achieve the necessary improvement was the same.

The Governor stressed that he supported the minister on two bills that had to be passed and implemented as soon as possible.

“A second point I need to stress is that unfortunately vital time has gone by, which I believe will affect the effectiveness in terms of the expected income.

“It is totally unacceptable for the bills to have been delayed in the House since last October,” Christodoulou said.

The two bills concern bank confidentiality and tax amnesty.

Christodoulou declined to comment on why the bills had been delayed for so long, pointing that the issue was outside his authority.

The two bills are expected to be submitted and approved by the plenum tomorrow.

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