Cyprus gov’t panned for announcing welfare package two months before polls

NICOSIA (Reuters) – Cyprus’s government said yesterday it expected to produce budget surpluses in coming years, but received a barrage of criticism that it was using it to bankroll its re-election next year. Authorities on Wednesday unexpectedly announced a welfare package worth 75 million Cyprus pounds ($111 million), two months before the island goes to elections on February 17 to elect a new government. Yesterday, the government said it also expected to turn over surpluses for the next three to four years. It followed disclosures that Cyprus was to produce a rare budget surplus reaching 1.5 percent of gross domestic product in 2007 after earlier expectations of a deficit. «This package was announced after a new assessment of the economic achievements and the realization there was the ease to share these good achievements with the public,» Finance Minister Michalis Sarris reportedly told the Cyprus Broadcasting Corporation. Earlier, Sarris told an economic conference in Nicosia that the island, which joins the eurozone on January 1 with Malta, expected budget surpluses reaching 0.5 percent of GDP over the next three to four years. In announcing the package on Wednesday, Cypriot President Tassos Papadopoulos said the aid – ranging from bonus payments to pensioners to upping child benefits – was a gesture of «appreciation» to the public. Opposition parties said the move smacked of electioneering, and some newspapers suggested the same. One newspaper, the liberal Politis, had a caricature of the 73-year-old Papadopoulos wearing a red Santa costume, scaling a wall with percentage markers and carrying a goodie bag on his back. «It’s 74 days before elections. Of course it’s an election ploy and an attempt to grab votes,» said Nikos Katsourides, spokesman for presidential challenger Dimitris Christofias. Papadopoulos’s administration wrestled down a budget deficit hitting 6.3 percent when it took over in 2003, and public debt which then exceeded 70 percent of GDP. Opinion polls suggest a close race between Papadopoulos and his two key challengers, Christofias who heads the Communist AKEL party, and Ioannis Cassoulidis, backed by the right-wing Democratic Rally Party. Some opinion polls have suggested AKEL’s Christo-fias could defeat Papadopoulos if the vote heads into a runoff on February 24.