ECONOMY

Top Cyprus banker says he is ‘disappointed’ with government’s welfare spending plans

NICOSIA (Reuters) – The governor of Cyprus’s central bank said he was disappointed yesterday with a government spending package which he said was short on detail as to how it would be funded. Authorities last week 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. «This has disappointed me. This is not directed against the government, but there is a broader issue here. I have not seen any political quarter talk about how government expenses will be limited, or how to increase revenues to fund social spending,» Athanasios Orphanides, the central bank governor, told reporters. The government said it would go ahead with the package on the back of an unexpected surplus for 2007 expected to amount to 1.5 percent of gross domestic product. Orphanides, who took over the island’s central bank earlier this year, has repeatedly argued that it is shortsighted of authorities to spend its surplus. Other political parties making similar pledges on boosting spending were also short on detail on how it would be bankrolled, the central banker said. «We should pose the question: Even if we have a surplus, would that be enough to play down public debt, or the obligations and promises we have to society for the next 50 to 100 years?» Orphanides said. Cyprus’s trade deficit widened in January to October to a provisional 2.5 billion Cyprus pounds ($6.3 billion) from 2.1 billion a year ago, the the country’s statistics department said yesterday.