Committee gives green light for 2008 budget

THE HOUSE Finance Committee yesterday gave the green light for approval of the 2008 state budget in its totality just hours before submitting it to the plenum for deliberation.

Next year’s budget provides for revenue of £3.27 billion compared to £3.11 billion in 2007.

Spending is forecast at £3.88 billion compared to £3.60 billion in 2007. The economy is expected to post a budget surplus of around 0.5 per cent in 2008, and growth of 4.0 per cent.
But Committee Chairwoman Antigone Papadopoulou issued a warning over recent increases in inflation, which will clock around 2.5 per cent this year and is forecast to rise to 3.0 per cent in 2008.

Papadopoulou said there was some optimism that this could change for the better with recent VAT adjustments and derogations from the EU on certain items until 2010.

She also called for the safeguarding of the inflation-linked Cost of Living Allowance (CoLA) on wages every six months. The allowance has come under fire recently by critics who say it fuels inflation.

Papadopoulou also said the adoption of the euro on January 1 presented a unique challenge for the Cyprus economy, which if handled correctly could lead to macroeconomic stability, a further rise in the standard of living, and higher growth rates.

The plenum began its debate on the budget last night with speeches by party leaders. It is expected to wrap up on Thursday night with a vote.

The political parties supporting the re-election campaign of President Tassos Papadopoulos, DIKO, EDEK and the Green Party announced their full support for the budget and used their speaking time as a platform to present the favourable economic results as an indication of the success of the Papadopoulos presidency.

Opposition parties also used their platforms for electioneering purpose, and like Papadopoulos` support base, dwelt as much on the Cyprus issue as they did the budget.
Discussions continue all day today.
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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.