Christofias ‘saddened’ by economy wrangle

PRESIDENT Demetris Christofias was yesterday forced to defend his government’s financial handlings, saying he was truly saddened by the fact that some were celebrating the possibility of negative developments in the state’s finances.

The new economy spat started with a leaked internal document from the Finance Ministry, which painted a different picture of the economy than the one it publicly states.

Among other things, it predicts a 6.0 per cent deficit for this year, over 2.0 per cent higher than what the government recently announced.

Christofias was yesterday asked to comment on “alarm bells” that are sounding from the EU over Cyprus’ deficit.

“I am ambitious, not over-ambitious but reservedly ambitious, that the goals that have been set to develop tourism, and the beginning of new development works will bring results,” said Christofias.

He rejected recent criticism over negative economy indicators for the first quarter of this year. “There are other matters and decisions that have been made for after July, the second half of the year,” said Christofias. “Therefore, I think for those who are unfortunately celebrating, I have to say I am truly saddened that this happens when it is considered that we have a negative development in the state’s finances and our economy. It is unheard of for Cypriots to be celebrating… but they will be proved wrong.”

The leaked documents forecast a higher deficit than the 4.0 per cent of GDP for this year, which was in the Stability Programme announced by the government last month. The document also predicted that the deficit would be 2.0 per cent higher, and unemployment 8.0 per cent.

Meanwhile, the leader of coalition partner DIKO, Marios Garoyian, yesterday presented an entirely different view to that of the party’s second-in-command , Nicolas Papadopoulos, leading to new speculation over a rift in the party.

Contradicting Papadopoulos – who launched a scathing attack on the government and Finance Minister Charilaos Stavrakis when the documents were published in Phileleftheros on Wednesday.

Papadopoulos accused the government of “creative accounting” to achieve the recently-announced positive results.

Garoyian said yesterday the economy shouldn’t be used to serve petty political interests.

In fact, he accused the two major parties – ruling AKEL and opposition DISY – of “engaging in a game of polarisation”, which would only intensify as the May 22 parliamentary elections approach.

“The two big parties need to abandon these games of trying to impress,” said Garoyian.

He added that he asked to be informed by the Finance Ministry on the nature of the leaked documents and was told that they had been prepared by a ministry official as one of many scenarios that need to be looked at for the economy. Finance Minister Charilaos Stavrakis they figures leaked were a ‘worst-case scenario’.

Though pressed by the media, he refused to comment on Papadopoulos’ position on the matter.