Cautious response to progress on economy deal

MAIN opposition DISY warned yesterday that any measures designed to shore up the ailing economy should not only aim in raising state revenues but also in cutting spending.

DISY spokesman Haris Georgiades said the party recognised that at this stage, it would also take measures to raise revenues, which will only affect high income groups.

“This is the price of inaction and delay,” Georgiades said.

He added that it is a strict condition “the measures brought to parliament should be complete, balanced and not limited to taxes” but should be mainly geared towards cutting state spending.

“They should be measures that create the prospect of recovery and growth; measures that restore confidence to our economy and certainly not measures and sacrifices, which will eventually prove ineffective,” Georgiades said.

State workers unions appeared ready to make some concessions on Thursday, following a meeting with President Demetris Christofias, but reports suggest that the government is also looking to hike VAT by 2.0 per cent to 17, and raise tax on interest from deposits by 5.0 per cent to 15 per cent.

The chamber of commerce and industry (KEVE) yesterday said it will not agree to new taxes that affect everyone so that unions accept a package of measures put together by the government and parties.

“Any new taxation should be discussed, should be temporary and for a specific period of time like the unions’ proposal for an emergency contribution,” KEVE said.

KEVE said it will not consent to direct taxation now with doubtful savings next year.

“It should all start together on September 1 this year,” KEVE added.

Economist Dr. Stelios Platis said any more delays taking measures could bring Cyprus to the point of no return.

“The size of the problem in Cyprus is manageable. However the delay in taking any action, at some point — we haven’t reached that point yet — will make it unmanageable,” Platis said.

He said that if by mid-December there is no definite action plan to fully refinance €1.5 billion up until April, then it would not be manageable.

Platis said “We have to be able this year to meet our budgetary targets (4.5 per cent) at all costs,” as a signal to the markets and not only them.

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.