Government denies DISY accusations that it is ‘idle’ in face of global financial crisis

ECONOMIC growth in 2009 could be even less than the Central Bank’s 2.0 per cent prediction unless action is taken, opposition DISY said yesterday.

The comments by DISY’s Averoff Neophytou drew the ire of the government, which denied remaining idle in the face of the global credit crunch.

“The government is doing nothing to manage the impact of the global financial crisis,” said Neophytou.

He said his party had made it clear during the budget debate that if the inaction continued, Cyprus would be the only country in the world without measures to tackle the crisis.

“Even the Central Bank scenario of 2.0 per cent growth for 2009 will be a very ambitious and optimistic,” Neophytou added.

He said the opposition’s comments were not meant as alarmist but to push the government to take timely measures.

“The assessment of DISY is that economic growth will be significantly reduced even more than conservative estimates,” he said.

Neophytou said when the Human Resources Development Authority estimates that unemployment would reach six per cent, or 25,000 people with a 2.0 per cent growth, “then it should scare us that with a lower economic growth rate, unemployment will reach much higher than six per cent”.

“The economy is like illness. If you do not take preventive measures give proper treatment in time…”.

Government Spokesman Stefanos Stefanou hit back saying the government was not idle and had taken steps, and said it was not ruled out that more would be taken as appropriate.

Late last year, the state pledged €52 million to support tourism and construction, the two sectors most affected by the international crisis.

Not only the opposition but the sectors themselves have said it wasn’t enough.

Yesterday, he said the cabinet had already made inroads to fulfil its promise to bring forward large development projects that would pump money into the economy and support employment.