GOVERNMENT and opposition yesterday traded barbs over the news that Cyprus was one of four EU countries that needed to take no further steps to curb their budget deficits under rules on government finances.
While ruling AKEL and the government welcomed the news, and spoke of their economic policies being vindicated, opposition DISY’s Averoff Neophytou said nothing had actually been done to warrant the bragging.
“It is very important and pleasant that the Commission feels our country doesn’t need to take any additional measures at the time being to deal with an excessive deficit,” he said. However he added that European Commission’s (EC) concerns also needed to be taken into account – “that the vast majority of the measures taken had to do with the state’s revenue and not reducing state expenditure”.
“Cyprus may have exited the economic recession, but the financial crisis that strikes the real Cypriot economy remains and so do the structural problems in the public sector, but mainly the problems affecting the private sector, small and medium sized enterprises and the vulnerable sectors of the public,” said Neophytou.
AKEL’s Stavros Evagorou said yesterday the government detractors on the economy should silence themselves in the wake of the news from Brussels.
Evagorou, who has been in conflict with Neophytou over the state’s finances ever since the government came into power, went on to accuse the opposition MP and his fellow deputy and DISY member Lefteris Christoforou of speaking two different languages when it came to matters of the economy.
“DISY has established bilingualism in its policy, as it thinks that this will help it fool the people,” said Evagorou. “We have Mr Neophytou on one hand saying: ‘Make all the cuts you can, take from the workers’ and Mr Christoforou on the other saying: ‘give’”.
AKEL feels this development in Brussels is a reward from the EU for the government’s efforts to solve the island’s fiscal problems, said Evagorou.
“The Commission’s announcement is a slap in the mouth for malicious criticism and populism on behalf of DISY and certain others, who purposefully sidestepping the essential progress and gradual improvement of the financial situation, insist on presenting the economy with dark colours, provoking confusion but also damage to our state,” he said.
Evagorou said it was clearly evident to any objective observer that DISY “is bothered by the fact that the financial situation has improved significantly, as they no longer have arguments to exercise opposition”.
In a clear dig to DISY’s refusal to accept an increase in corporate tax and immovable property tax, Evagorou reasoned that if the opposition consented to taxing the wealthy and rich, Cyprus’ financial situation would be vastly better. “You see, as much as this party likes to be populist, it can’t escape its nature,” he added.
Coalition DIKO’s Nicolas Papadopoulos also joined the detractors. He said the finance minister should be concerned instead of celebrating, considering the EU’s confidence index for Cyprus was the second worst after Greece.
“We have been hearing the finance minister celebrate over the past few days because the deficit results were better than expected and therefore no further measures would be taken in the frame of excessive deficit,” said Papadopoulos.
“While it is positive that we will no longer suffer any more sanctions by the European Commission, our minister should not be celebrating. For example, we didn’t hear him comment on the fact that in its most recent observations over the Cyprus economy, the EC underlines that the biggest part of measures for economic recovery regarded taxes and the increase of revenue and not reduction of expenditures, which was part of (the EC’s) suggestions,” said Papadopoulos.
The EC, he added, had also spotted the government’s failure to prepare a three-year fiscal plan, as well as the lack of measures to improve the pensions system.
“The EU concludes that Cyprus needs to be more efficient with the recovery of its public finances,” said Papadopoulos. “So the finance minister should quit the press conferences and Powerpoint presentations and implement the government’s commitments to reduce public expenditures, reduce public servants’ salaries and reform the pensions system.”
