ECOFIN says budget target plausible

The Economic and Financial Affairs Council ECOFIN has praised Cyprus for its convergence programme, describing it as “aspiring but plausible” towards its aims to restore the budget deficit below three percent of the Gross Domestic Product.

During Tuesday’s meeting in Brussels, Finance Minister Makis Keravnos noted that the budget deficit had fallen to 4.2% of GDp in 2004, compared with the original target of 4.8%.

EU Finance Commissioner Joaquin Almunia, commented positively on the reduction of the deficit, adding that under these circumstances, the government’s convergence programme seems to be all the more plausible.

Noting that Cyprus has the fifth largest public debt ratio in the EU, at 72% of GDP, Almunia recommended that Cyprus fervently pursue structural measures, especially in the fields of pensions and health, to further improve the economy in general, to reduce the public deficit and to achieve long-term viability.

The Cyprus revised convergence programme covers the period 2004-2008 and was submitted on December 7, 2004.

The European Commission approved it in January and then submitted it to the Council of Ministers, which gave a positive opinion.

The Council noted that Cyprus should implement the measures to bring back the budget deficit to below 3% of GDP and gradually to zero and to continue reforms to limit the risks of the ageing population.