Presidents siblings oppose austerity; Cyprus hikes VAT to 17%

The Cyprus president’s siblings, Christina and Christos Christofias, were caught on camera by the daily Phileleftheros (far right and far left of photo) as leading the demonstration in front of parliament on Tuesday opposing the austerity measures tabled by their father, Demetris Christofias.
The two main unions, communist Peo and centre-right Sek, as well as the civil servants’ trade union Pasydy, oppose government efforts to freeze wages in the public sector, which puts the communist-led administration in an awkward position amid the ongoing economic crisis.
Parliament is expected to vote through a VAT hike from 15% to 17% within the current debate of the austerity measures and the 2012 budget.
The new tax is expected to come into force on March 1, according to socialist Edek MP Nicos Nicolaides who said that consensus has been reached between the government and parliament.
Nicolaides said that during the House debate on the 2012 budget and austerity measures, his party will propose that government spending be cut by a further 5% to 10%.
Meanwhile, the House Finance Committee agreed to raise by 10,000 euros the minimum income levels for child and student grants, with a family earning 39,000 getting the full benefit and households with an income of more than 100,000 euros losing the benefit altogether.
House President Yiannakis Omirou said that on Wednesday morning the house will debate and vote on the government’s austerity package, while the debate over the state budget is to continue on Wednesday afternoon.
Omirou further said that every effort will be made so that the debate and vote over the state budget is concluded by Thursday evening, adding however that if that is not possible then it will end on Friday morning.
The state budget for 2012 foresees income, excluding loans, of 6.22 bln euros compared to a 2011 revised income of 5.65 bln euros.
The total expenses provided for in the budget, excluding loan payments, come to 7.54 bln euros compared to 8.02 bln budgeted for 2011.