Orphanides: Cyprus in good shape compared to Greece

CENTRAL BANK Governor Athanasios Orphanides has said a comparison between the Cypriot and Greek economies was not warranted days after Finance Minister Charilaos Stavrakis said Cyprus should take the economic crisis in Greece as a lesson.
In an interview with the Bloomberg news agency, released yesterday, Orphanides said: A comparison with the Greek economy is not warranted. Our budget finances are in better shape and our debt to GDP ratio is considerably smaller.”
He conceded that the the deterioration of the fiscal finances Cyprus has experienced recently was “very unpleasant”.
“The government should take the appropriate steps to tackle it as quickly as possible, precisely to avoid a further deterioration that would have adverse longer-term consequences for our economy,” he said.  
“That said, I should point out that the budget deficit estimate for 2009 puts Cyprus in the middle of the range for the euro area as a whole. The situation is clearly not as dire as in some other euro area countries. To some degree this is because the recession we experienced in 2009 was not as deep as in other regions of the euro area.” 
Orphanides said the growth of government expenditure that has been experienced over the last number of years could not continue and “must be curtailed”. 
“Control of government expenditure should be an important component of the fiscal consolidation process,” he said.
“It is crystal clear that there is a need for corrective fiscal consolidation in order to avoid further deterioration, especially since the growth prospects for the Cypriot economy in 2010 are somewhat lower than the growth prospects for the euro area as a whole.”
Orphanides said what was seen in Cyprus was some delay in experiencing the consequences of the crisis relative to the euro area. “It seems likely there will be some delay in returning to growth in the economy as well,” he said. 

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.