Cyprus News Agency: News in English, 06-06-21
CONTENTS
[01] EU - ÅDP - CYPRUS
[01] EU - ÅDP - CYPRUS
The European Commission decided today to recommend that the Council
abrogates the excessive deficit procedure (EDP) against Cyprus after
the deficit fell to 2.4% of GDP in 2005 and is projected to decrease
further in 2006 and 2007.
Joaquin Almunia, European Commissioner for Economic and Monetary
Affairs, welcomed the Commission`s decision.
``The Cypriot case shows that budgetary consolidation undertaken with
resolve can achieve sustainable results,`` Almunia said speaking to
Cypriot reporters, encouraging Cyprus ``to pursue this route and
achieve its objective of having finances close to balance by the end of
the decade given the high risk arising from the costs of an ageing
population.``
Cyprus entered the EDP procedure after an ECOFIN decision on July 5
2004, two months after Cyprus` accession to the EU, due to the presence
of deficit above 3% of the GDP. Cyprus had a deficit of 6.25% in 2003.
The Council recommended a correction below 3% by 2005 in a credible and
sustainable manner while ensuring that the rise in the debt ratio was
brought to a halt in 2004 and reversed thereafter. This has been
achieved.
Almunia described today`s decision as ``very good news,`` since that
Cyprus is the first new member state out of the EDP, adding that Cyprus
fulfils the criteria for accession to the Euro.
He suggests that the Cypriot government should be particularly cautious
in constraining inflation, given the high oil prices internationally.
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