NICOSIA, March 29 (Xinhua) — The Cypriot government said on Friday that it was worried about the economic stability of the country following a court decision declaring unconstitutional austerity measures taken to face the 2013 economic crisis.
The eastern Mediterranean island’s top administrative court issued a decision earlier on Friday saying cuts in the salaries and pensions of civil servants and additional levies imposed as part of measures taken to deal with the economic crisis violated constitutional provisions protecting property.
The measures were demanded by international lenders who granted Cyprus a 10 billion euro (11.22 billion U.S. dollars) economic assistance package in 2013 as a means of reducing public spending.
“It is a decision which will probably have big consequences for the economic stability of the country … the government will do whatever it takes to preserve the stable progress of the economy,” government spokesman Prodromos Prodromou said.
Attorney General Costas Clerides said that he had talked with Finance Minister Harris Georgiades about the possibility of filing an appeal against the court’s decision.
Admitting that he was not the appropriate official to talk to about the court decision’s impact on the economy, Clerides said that because of the potential consequences he will ask for the suspension of the decision’s application until after a possible appeal.
Clerides said he was currently assessing the practical implications of the decision to ascertain whether it requires the government to reimburse lost income to civil servants.
If the decision requires that, the government will have to pay hundreds of millions of euros, taking into consideration that the cuts reduced the public service payroll by 700 million euros a year.
A Finance Ministry official told state-run Cyprus News Agency that the ministry was also closely examining the court’s decision with a view to estimating the costs to the state.
The International Monetary Fund has warned in a recent report on Cyprus’s economy that court decisions could impair the government’s ability to repay the sovereign debt, which currently stands at over 100 percent of gross domestic product (GDP). Enditem
