Cyprus austerity measures

Government Spokesman Stephanos Stephanou has expressed Saturday the government’s satisfaction for the approval, by the House of Representatives, of the first package of austerity measures aiming at fiscal consolidation, despite the amendments made on the package.

In a written statement, Stephanou notes that the government also expresses satisfaction for the good sense and consensus that prevailed, despite the many discussions and the debates that were preceded.

“The government always underlines the great need for social dialogue in formulating the package of austerity measures. The social dialogue is a factor of stability and indicates responsibility. Throughout the years it has proved to be a factor of social stability and peace, as well as a factor of growth and progress”, Stephanou points out.

At the same time, Stephanou states that the government is determined to proceed with a second package of austerity measures aiming at fiscal consolidation. “The House of Representatives, political parties, trade unions and the public opinion have already been informed by the Finance Minister on the outline of the second package”, he says.

He assures that the government will follow the same procedure of dialogue and consultation in formulating the second package, adding “the dialogue will continue with the political parties and with the social partners, with an aim to find a consensus. We would like to see the necessary response and all parties involved to act with prudence and with creative spirit, enabling us soon to present a second package before the House of Representatives. This way, the messages that will be sent to the international markets will be strong and persuasive”, he concluded.

The House of Representatives of the Republic of Cyprus approved Friday night the first of two packages of austerity measures aiming at fiscal consolidation.

Specifically, the House approved six bills and one proposal which included a two-year (instead of three year) sliding scale contribution for civil servants and employees in the broader public sector earning over 1.500 euros. A permanent contribution from the pension funds of public sector and broader public sector employees was set to 3 per cent from 2.5 of the gross income after a proposal by opposition parties the Democratic Rally, the Democratic Party and the European Party.

The package of austerity measures, aims to save the government 750 million euros, and comes after a week of intense negotiations with the social partners and political parties.

The House will reconvene on September 15.