No date has been confirmed yet for next Troika mission to Cyprus, Government Spokesman Stephanos Stephanou has said.
Speaking after a meeting of the Cabinet on Thursday and replying to a question, Stephanou said the Government is in consultation and in contact with Troika. “When this consultation is finished, we will discuss and examine when Troika will come again to Cyprus”, he said noting that this will depend on the course of the negotiations.
Asked about a press release by the Finance Ministry, according to which the fiscal deficit stands at 3.1% of GDP in the first half of 2012, while Troika`s estimations are that the deficit will reach 5.5% by the end of the year, Stephanou said that the government estimates that if new measures are not adopted, the deficit will be around 4.5% by the end of the year.
Stephanou said that the government’s previous estimation was that the deficit would be around 3.5% by the end of 2012. However, he noted, according to preliminary data, the 1.26% increase in revenue during the first six months of 2012,was lower than what has been forecasted in the 2012 State Budget.
He added that a series of reasons, such as the decreased consumption, explain why revenue increase was lower than the expected.
Stephanou said that expenditure marked a decrease of 1.37%, also lower than the expected decrease, which was around 3%. “This is due to the increased cost of lending and several other factors”, he added.
He went on to say that the government has prepared a package of measures to further decrease expenditure and further increase the revenue. “We are doing that having in mind the data of the first half of 2012”, he said, pointing out that the Government will continue its effort to reach the targets that have initially been set out.
Replying to another question, Stephanou said that the discussion on the adoption of measures has coincided with the discussion and consultations with Troika.
In other question, Stephanou explained that not all the masures proposed by the government need to be approved by the House of Representatives, for example, he said, the decrease of state expenditure by 40 million euro. “For the implementation of this measure specific work has been done by the Ministries to identify the exact funds that can be decreased or cut, with an aim to further decrease the state expenditure”, he said.
Invited to comment information about abolishing the Cost of Living Allowance (COLA), Stephanou said that the government’s target is to restructure and not to abolish COLA.
The government of the Republic of Cyprus informed on the 25th of June 2012 the appropriate European Authorities of its decision to submit to euro area Member States a request of financial assistance from the EFSF/ESM.
A Troika mission (representatives of EU Commission, European Central Bank and IMF) was here in early July on a fact finding mission for a close scrutiny of the banking sector, which has been severely hit by Greek sovereign debt haircut and over-exposure to the Greek economy, as well as the refinancing requirements of the Government.
It returned to Cyprus in late July for another week, to negotiate with the Government the bailout terms and conditions.
Consultations between the Government and the Troika continue with a view to conclude to a memorandum the soonest possible.
