Matters related to fiscal consolidation are of national significance President of the Republic Demetris Christofias said on Monday, calling on everyone “to exceed themselves”.
Speaking at the Presidential Palace following a meeting he had with Turkish Cypriot leader Dervis Eroglu in the context of the UN-led negotiations to solve the Cyprus problem, President Christofias pointed out that “the less we say, the better”.
The President today met Nicos Anastasiades, President of Democratic Rally, the main opposition party, with whom he discussed the austerity measures recently announced by the Finance Minister Kikis Kazamias, aiming to constrain public expenditure and consolidate public finances.
Invited to comment on the meeting, the President described economy as a vital national matter, saying that “neither the Government nor the political parties, should try to send the message that they are in control”.
He added that a consensus is needed through public dialogue.
“Decisions will be taken by the government following a discussion with the political parties since these issues will also be presented before the Parliament and a consensus is needed”, the President underlined.
“We are not governed by trade unions or employers, everyone should participate in the public dialogue and the final decisions will be taken by the Government”, President Christofias said.
The Cypriot House of Representatives has already approved the first fiscal consolidation package on August 27. A second package of measures is incorporated in the 2012 state budget, including a 200 million euro reduction of social transfers.
A proposed bill for the increase of the VAT rate from 15 to 17% is pending for approval. If these measures are approved, Cyprus will reduce its budget deficit below the Euro area benchmark and particularly to 2.8% of GDP.
On Friday, November 18, Kazamias proposed a third set of measures including the freezing of salary increases in the public sector (including COLA) for two years, a measure that will save 355 million, a scaled taxation of private employees with a monthly salary of over 2,500 euro and the introduction on a 0.5% levy on the turnover of companies with Cypriot operations for two years
