Cyprus FINMIN committed to necessary structural changes and fiscal targets

The government remains committed to achieving necessary structural changes and fiscal targets set, so that a return to growth is possible, Cyprus Ministry of Finance has said on Wednesday.

A ministry press release issued here today comments on European Commission’s recommendations on the Cyprus economy and its special report on macroeconomic balances.

The European Commission, it states, welcomes Cyprus’ commitment to achieving its medium term fiscal targets noting at the same time the fragile macroeconomic environment which may act as a disruptive factor.

The government “is studying the European Commission’s recommendations on the Cypriot economy and remains committed to achieving the necessary structural changes and fiscal targets set so that a return to growth is possible”.

The ministry further points out that achieving the greatest possible consensus with political parties and social partners is an important factor in this effort.

In a comment as regards macroeconomic imbalances the ministry notes that Cyprus according to the Commission’s report faces on the one hand domestic imbalances due to developments in the banking sector and over business indebtedness and on the other hand external imbalances due to competitiveness problems and fiscal risks.

The ministry points out that the EU Commission recommends that further measures need to be taken to deal with an excessive deficit in 2012, whilst at the same time keeping in line with fiscal targets as they are set in its Stability Programme.

The Commision “stresses the need to promote structural changes to resolve chronic problems faced by the Cyprus economy”, the ministry adds.

It is further noted that competitiveness needs to improve and the productivity structure of the economy needs to be differentiated.