PARTY LEADERS yesterday called for the government to take immediate action to sidestep an economic meltdown and keep the country’s economy from heading in the same direction as Greece. The reactions came in the wake of Tuesday’s Employers and Industrialists Federation (OEV) conference on the Cyprus economy, which heard stark warnings from Finance Minister Charilaos Stavrakis over the budget deficit.
Government spokesman Stefanos Stefanou said yesterday that the government and political parties are currently considering a package of measures to address the impending crisis.
“We believe it is time to have a rational debate about the economy because we feel the economy and the economic situation is out of control,” said DISY spokesman Haris Georgiades.
The government and the parties so far seem to agree on not increasing or implementing new taxes, while DIKO and DISY want to cut public sector spending in favour of spending on the private sector.
When asked about tax increases Stefanou said the government and the parties have not discussed it as part of the package of possible measures. DIKO spokesman Fotis Fotiou said his party is against increased taxation, declaring that such a move “is not the way to help this crisis to recover.”
Georgiades revealed that DISY will be proposing measures in the next few days aimed at “increasing public revenue without increasing taxes.”
DIKO’s frontline strategy is to reduce government wages and salaries and to provide incentives to the private sector to invest in large projects, according to Fotiou.
DISY’s strategy is similar, said Georgiades, as their measures aim to limit the size of and spending on the public sector and encourage private sector activity. When asked whether that included cuts to government salaries Georgiades said that DISY is “considering everything” but that he was not at liberty to discuss the specifics before the party formally releases its proposals later this week.
Fotiou struck a sense of urgency, saying that the OEV conference highlighted the fact that if no measures are taken in the near future, the country’s deficit will soar from its current 6.1 per cent to 10 per cent by 2013. He also said that unless something is done, Greece’s economy will negatively affect Cypriot banks and in turn, Cyprus’s own economy.
“This is another factor to take into consideration so we have to do something now,” said Fotiou. “We have to face this together, the government and the political parties, to react positively and overcome this period of time as soon as possible.”
DISY says it wants a solution immediately. “We feel the economic troubles will get even worse during 2010 but most importantly feel that the number of structural weaknesses of the Cypriot economy, which we were able to put in the cupboard the last few years, have now become pressing,” said Georgiades. “This is a very different picture to what the government was saying until recently that we are well protected and would not be facing consequences.”
But Stefanou assured the public that the government has the situation under control. “The government has full understanding of the economic situation and what needs to be done to deal effectively with any problems,” he said.
“The government will do what needs to be done to consolidate the economy, but also continue the social agenda and ensure, first of all, state coverage and support and for those who need it,” he added.
