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Cyprus plans to issue one billion euro bond on international markets by June in a bid to cover the refinance of the public debt expiring in 2009, Finance Minister said.
Stavrakis spoke to the press after a meeting of Cyprus Finance Ministry's Finance Advisory Committee, composed of Ministers of Commerce, Industry and Tourism and Labour and Social Insurance, as well as representatives of the Central Bank, and the social partners.
''Unfortunately due to some historic coincidences there is a huge part of the current two- billion-euro public debt which expires within the next ten months,'' he said.
He added that this debt will increase due to the 200 million euros the government pledged to the Social Insurance reserve and due to the 200 million euros allocated for the housing scheme for young couples.
Stavrakis said that the public debt is expected to increase because of the deficit ''expected to be created in 2009 from the decline of public finances and the need to strengthen the real economy.''
Regarding the ways to tackle this situation, Stavrakis recalled the Finance Ministry agreed with the Central Bank to issue ''five-year government bonds worth at least 1 billion euro to cover the short-term financing needs of the Republic and the remaining some will be covered with a combination of domestic Cypriot development stocks and some short-term borrowing through European short-term bonds.''
He however stressed that the government is exerting efforts so that the public debt will be refinanced ''with the smallest possible cost for the taxpayer.''
The Finance Minister added that the advisors of the government would propose the right moment for the issuing of the bonds, adding, ''so far the prediction is within June.''
He added that the Advisory committee covered issues concerning unemployment, the public finances and Cyprus growth rate, interest rates and the current liquidity in the banking sector.
''All social partners, the Central Bank and the Finance Ministry are making different studies and alternative scenarios to reduce the consequences of the global financial crisis to the Cypriot economy,'' Stavrakis concluded.
