The House of Representatives unanimously voted on Thursday the first three out of a total of twenty eight austerity bills into law.
The first bill provided for an increase of VAT from 17% to 18% as of January 1, 2013 and a further percentage unit increase to 19% as of January 1, 2014, as well as an increase of a reduced VAT rate for certain products from 8% to 9% as of January 1, 2014.
Public servants salary and pension tiered cuts from 6.5% to 12.5% were provided for in the second bill which passed into law. According to the new legislation cuts begin as of December 1, 2012 until the end of 2013, whilst an additional cut of 3% will be enforced horizontally as of January 1, 2014.
MPs also adopted a third Bill which had to do with the increase of tax on alcoholic beverages, beer, tobacco and cigarettes. Cigarette prices go up on an average by 20 cents per packet, whilst tobacco prices increase from 60 euro per kilo to 120 euro per kilo.
Discussion on another 20 to 25 Bills the government asks the House to vote on will begin on Friday at the Parliamentary Committee of Finances and Budgetary Affairs. Depending on the progress achieved the Assembly will convene again on an extraordinary basis next Wednesday to vote on them.
All the bills are part of a package related to the implementation of the bailout memorandum agreed in principle between the government and the Troika (EC, ECB, IMF) and are considered necessary in order for the position of Cyprus to be strengthened in view of the Eurogroup meeting of December 12.
House to approve 28 austerity bills before December 13 Eurogroup
The House of Representatives is set to approve a total of 28 bills that implement provisions of the adjustment programme, agreed between the Cypriot authorities and the Troika of the European Commission, the European Central Bank and the IMF, as part of Cyprus` application for financial assistance from the EU bailout mechanism.
Speaking after an extraordinary meeting of the House Committee of budgetary and financial affairs, its Chairman Nicolas Papadopoulos said the House is required to approve these bills by next Thursday December 12, one day before the meeting of the Euro area Finance Ministers (Eurogroup) meeting which will discuss the Cypriot application for financial assistance.
Christos Patsalides, the Finance Ministry`s Permanent Secretary who briefed the Committee on the bills submitted to the Parliament, said the approval of the austerity measures "is imperative between default and insolvency".
Papadopoulos pointed out that these bills are only the beginning of the legislative work for the implementation of the Cypriot adjustment programme.
"This is not the end of the road, many more bills are on the way because this is only the beginning with regard to the implementation of our commitments stemming from the memorandum", he said.
Referring to one of the bills providing for scaled salary cuts in the wider public sector, said to be unconstitutional, Papadopoulos said the Attorney General who participated in the meeting said these measures will be approved on the basis of the law of necessity.
