The sooner longstanding problems are solved, the sooner Cyprus will be sending signals of trustworthiness to international markets, the Governor of the Central Bank of Cyprus Athanasios Orphanides said on Thursday, pointing out that some of the downgrading of the island's economy can be reversed.
Speaking after a lunch organised by the Nicosia Rotary Club, Orphanides said that ''over the past year we have had many challenges and great efforts are being made at this moment to improve the governance framework,'' adding that ''in Cyprus this development is especially significant because, as a financial centre in the region, the stability of the Eurozone is very important for the welfare of the country and the continuous growth of the financial sector.''
Orphanides pointed out that ''very soon, over the next few months, we must all make efforts to restore the fiscal status of our country to a solid foundation,'' adding that ''such efforts are being made in all the other EU countries at this moment and it is important not to stay behind.''
Replying to questions, Orphanides said that Cyprus has ''a negative watch by international credit rating companies'' and noted that ''other international organisations, for example the European Commission in its recent report, have indicated that we need corrective measures of a medium-term and long-term nature.''
Asked about the visit to Cyprus by a delegation of the International Monetary Fund (IMF), Orphanides said that ''we had a discussion at the Central Bank with the IMF representatives, who are here to monitor the latest developments in our economy,'' adding that ''they are concerned with the fiscal problems we are facing and are asking for a lot of information on discussions taking place.''
''We must view their visit as a preparation of their annual visit, which is placed probably in June 2011,'' he said.
Asked if he was concerned by the increase of inflation pressure in the EU, he said that ''we are witnessing recently an increase in the prices of raw materials but we foresee that this increase so far does not seem to have affected the prospect for the stability of prices in one or two years, which is especially important and decisive for the monetary policy of the Eurozone.''
''As always, we are monitoring developments and we are ready to move by taking any monetary policy measures necessary in order to maintain the stability of the prices in the Eurosystem, which remains and will remain our primary aim,'' he added.
Asked about press reports that he may be the successor of Jean Claude Trichet as President the European Central Bank, Orphanides said it was too early to discuss such an eventuality, noting that Trichet would remain President of the European Central Bank until the end of October.
