Finance Minister Vasos Siarlis has said that any deviation from the agreed EU financial framework shall be covered by new measures if necessary
Addressing the House Finance Committee, his first appearance before the Committee since his recent appointment as Finance Minister, he said Cyprus will respect the financial framework set, according to which the Republic is committed to the EU to limit its financial deficit between 2.5% and 2.7%, irrespective of pressures exerted on the economy.
“Any deviations must be covered by additional measures that will be adopted promptly, in order to fully exploit the time that remains before we achieve our goals,” the Minister stressed, without ruling out further cuts or measures to boost growth. Imposing taxes is not the best way to tackle economic problems, he added.
According to the FinMin, any new measures will be taken after mid-April, when the results of the first quarter of 2012 are expected to be announced.
Draft legislation on the financial framework already exists and it will be forwarded to the Parliament in the forthcoming weeks, Siarlis said, noting that Cyprus will probably be one of the first EU countries to adopt such legislation.
Replying to a question on liquidity, the new FinMin pointed out that the economy’s needs for 2012 have been met by the Russian loan amounting to 2.5 billion euro, while for 2013 the Ministry of Finance has yet to decide its course of action.
Furthermore Siarlis noted that the state will exhaust all measures to obtain funds to recapitalize the banks. State participation in the recapitalization of the banks must be the last resort, he pointed out, adding that it is the Central Bank’s obligation to look for foreign investors interested to take part. Following the recapitalization of the banks, the Ministry of Finance will deal with the liquidity problem, Siarlis explained.
The FinMin is expected to decide later in the week whether Triple Five – a multi-national conglomerate and diverse development and finance corporation with offices in the US and Canada – will be able to invest in government bonds issued by Cyprus.
By the end of the week, the Minister is expected to conclude his meetings with political parties and the social partners starting Wednesday, to discuss the cost-of-living –adjustment.
