Parliamentarians continued discussion of the state budget for 2006 on Tuesday, with the Chairman of the Finance Committee Aristos Chrisostomou indicating that the House committee will approve the budget for 2006 in its entirety, while reserving the right of its members to submit amendments for cuts or special funds.
All parties except for the small Ecologists party and the European Democracy party said that they would vote in favour of the budget.
Presenting the budget earlier this month before the House of Representatives, Cypriot Minister of Finance Michalis Sarris had said that the prospects of the economy for 2006 appear to be “encouraging,” and that all basic macroeconomic figures were projected to record further improvement.
The State Budget for 2006 presented a net income of 2.3 billion pounds (up 13.5%) and net expenditure of 3.3 billion pounds (up 6.1%).
After implementation of planned measures the fiscal deficit is expected to drop to 1.9%, the growth rate to 4.2% and unemployment 3.7%. He said that the projected improvement of the productivity rate was estimated at 2.7% and that inflation would be around 2.5% in 2006.
Parliamentary Spokesman for the ruling AKEL party, Nicos Katsourides
pledged his party would support the budge and hoped for more state intervention to lessen the wage gap.
Opposition Democratic Party leader Nicos Anastasiades said his party will also approve the state budget despite the fact that it believes it is overcome by conservative perceptions and is inadequate in covering the needs of the economy and the society.
“We believe that the package of measures proposed by the government, despite containing some correct measures, cannot lead the Cypriot economy to modern times nor it can achieve the real convergence” said Anastasiades.
President of coaltion partner Socialist Party EDEK, Yiannakis Omirou said EDEK will vote in favour of the state budget for 2006, expressing his support to the government and the economic prospects.
Opposition European Party leader Demetris Syllouris said the proposed budget is a good logistical budget which however, does not have any relation with the fundamental requirements of the economy and does not support the primary changes that are required.
United Democrats member of the House, Androulla Vassiliou said her party will vote in favour of the state budget but at the same time criticized the government for the serious problems which the Cypriot economy is facing as well as the impasse on the Cyprus problem which does not help to develop foreign investment on the island.
Vassiliou said the impression that the impression given overseas is that the government is satisfied with the lack of initiatives and maintaining the status quo.
She said although she was certain the new Finance Minsiter will do everything possible to improve the public finances, the cost of living continues to increase while businesses, especially the small-to-medium sized, have a serious cash flow problem.
The debate on the budget will wrap up on Thursday evening.
