Cyprus to record lowest deficit in 2009 and 2010, says Stavrakis

Minister of Finance Charilaos Stavrakis said that according to the European Commission Autumn forecast, during the years 2009 and 2010, the Cypriot economy would have the highest growth rate in the Eurozone and the second highest in the EU27.
He also pointed out that in 2009 and 2010 Cyprus is forecast to have the lowest deficit and public debt, while unemployment will be 4 points lower, compared to the average of the Eurozone and the EU27.
Speaking at a press conference, Stavrakis said that, contrary to press reports, the Cypriot economy is not under surveillance, while 13 out of the 15 Eurozone countries are, and noted that the total impact on public finances from the drop in income and the increase of social benefits was EUR1.4 bln or a deficit of 8.4%.
He added that the European Commission acknowledges in its report that the government has taken measures to reduce the repercussions of the global financial crisis, and that Cyprus, according to the forecast, will have the best growth rate in the Eurozone with 0.7%.
Regarding the public deficit, Stavrakis said that Cyprus has a lower deficit that the Eurozone and EU27 average, with only Finland and Luxembourg projected to have a deficit below 3%, and that for 2010 the European Commission predicts that no Eurozone country will have a deficit below 3%.
Referring to the public debt, Stavrakis said Cyprus remains at 58.6% for 2009, compared to 84% for the Eurozone and 79.3% for the EU27, according to the forecast.
Replying to questions regarding reports that Cyprus will be placed under supervision by the European Commission due to the fact that the public deficit will exceed 3%, Stavrakis said that, contrary to press reports, ''Cyprus is not under supervision, while 13 out of the 15 Eurozone countries are already under surveillance.''
He noted that in January 2010 the Ministry of Finance will be submitting Cyprus' convergence programme and that the European Commission and ECOFIN will decide on the expected deficit and the convergence of the Stability Pact for each country, taking into account the deficit, predictions on its duration, the contributing factors and the divergence.
''Based on these parameters they decide whether a country will indeed be placed under surveillance or not, and then a structured and official process begins,'' he added.
Referring to the development budget, Stavrakis said the real development expenditure for the first nine months of 2008 was EUR 387 mln compared to EUR 450 mln during the respective period of 2009.
Stavrakis assured that the government will follow a generous social benefit policy because it wishes to support the lower income groups of the population, which have been affected by the global financial crisis.