Central Bank Governor calls for implementation of structural reforms

Cyprus should proceed the soonest with the implementation of structural reforms, provided by the Lisbon Strategy, to bring significant improvements to productivity and competition and to support investments, said Central Bank Governor Athanasios Orphanides.
In a speech at a gathering of the Cyprus Chamber of Commerce and Industry, Orphanides said that “as long as we achieve high productivity, the salary rates will increase”.
A survey on the rate of innovation performance for EU countries in 2006 showed that Cyprus lacks significantly in the field of work productivity, registering only 76% of the eurozone productivity, Orphanides said.
He said that after the euro is adopted on January 1st next year, the island’s fiscal policy must be consistent and disciplined and should be drafted after careful and rational consideration.
The Central Bank Governor said that another reason which makes pertinent the need for fiscal discipline are existing demographic challenges on the island.
He said the European Commission, the European Central Bank and the International Monetary Fund have repeatedly warned Cyprus of the danger of straining the fiscal policy in the future due to public expenditure which will be the result of the demographic problem Cyprus is facing.