FINANCE MINISTER Charilaos Stavrakis yesterday appealed to business and union bosses to exercise restraint in the current climate of spiraling inflation and rising prices.
Yesterday morning Stavrakis held a meeting with the Minister of Labour Sotiroulla Charalambous and Commerce Minister Antonis Paschalides.
Representatives of the Employers and Industrialists Federation, the Chambers of Commerce, and SEK, PEO and PASYDY unions were also there.
The aim was to ask unions to show restraint in pay demands, and to ask business heads to try to keep down the prices of goods and services.
“The employers said they would do their best to pressure businesses not to increase prices,” said a government source who attended the meeting. “Of course this is easier said than done”.
The source said the Minister had underlined to both sides that they would have to take the changing times into consideration, and this included wage demands.
Non-harmonised inflation in Cyprus hit a five-year high of 4.94 per cent in May as the cost of food and fuel continued to spiral even beyond inflation rates.
Speaking after the meeting, Stavrakis told reporters that discussions had centred on what measures could be taken to reduce the financial burden on the public.
“We have agreed on a series of measures to reduce to the greatest extent possible the rate of increase in prices,” the Minister said.
“The government will play its role while the business people will do everything they can to keep prices as low as possible,’ he added.
“They have expressed their commitment to the effort, in these difficult times, so that there are no further increases in prices.”
Stavrakis said that other than appealing to the unions and employers` organisations, the government had strengthened the Protection of Competition Committee, and the Commerce Ministry was continuing with its price monitoring system that details how much supermarkets charge for their products.
Stavrakis said despite the global economic problems, the Cypriot economy was doing well, and he ruled out any new tax hikes other than those that might be imposed by the EU.
“The index and rate of economic growth is more than double the rest of Europe and there are conditions of full employment in Cyprus,” he said.
He said the public finances were still in good shape, despite some of the social handouts to lower income groups.
The government recently announced that it was owed millions in unpaid taxes, some of which it wants from the Church. It has also cast an eye on gold reserves but the Governor of the Central Bank last week refused to entertain the idea of selling off gold reserves.
Stavrakis said the government still expected a small budget surplus in 2008.
