Cyprus government and Central Bank on defensive over euro

The Ministry of Finance and the Central Bank of Cyprus are in a joint effort to raise public support for the euro, after the leader of the main coalition partner, AKEL, said that he would prefer a one-year delay.

Five months before the parliamentary elections, communist party AKEL Demetris Christofias said earlier this week that it could be beneficial to delay the adoption of the euro for a year.

AKEL ministers voted unanimously along with other ministers late last year to target January 1, 2008 as the euro entry date.

Cyprus’ budget performance in 2005 suggests that it is well on course to meet the Maastricht budget criterion.

The Ministry of Finance and Central Bank of Cyprus held a joint press conference yesterday to try to reassure the public that it would benefit of all Cypriots to target the euro as soon as possible.

Finance Minister Michalis Sarris said that the introduction of the euro will not involve additional sacrifices or demands from Cyprus.

“We are given the right to enter the euro without additional obligations beyond the fulfillment of the Maastricht criteria,” he said.

The Minister was speaking at a common press conference with Central Bank Governor Christodoulos Christodoulou, during which they presented the communications strategy for the adoption of the euro in Cyprus.

Christodoulou said there is excellent cooperation between the Ministry of Finance and the Central Bank for the preparation and materialisation of the strategic plan for the adoption of the euro.

He added that the Central Bank has already entered into an advanced stage on the issue of legislation, and networking with other commercial, financial institutions and associates.