Cyprus Stability Programme submitted

The Cyprus Government submitted the Stability Programme 2008-2011 (SP) to the European Commission (EC). According to the SP, the Government’s macroeconomic policy aims to continue the successful implementation of the fiscal policies and reforms with the primary target to strengthen the implementation of the Lisbon strategy.

The Governments fiscal policy targets include: the introduction of a Medium-Term Budgetary Framework (MTBF), which will institutionalise expenditure rules, give more independence to spending ministries and, at the same time, increase their accountability for achieving important quantifiable targets. The reform of the social welfare system, in favour of the less well-off. The modernisation of the public sector, which will result in leaner and more productive public services. Such a policy will limit expenditure growth and raise overall productivity. Particular attention will be placed on wage policy for public sector employees, given its impact on overall wage developments and hence the competitiveness of the economy improve further tax collection, within the present system.