Cyprus debt plan still valid
NICOSIA (Reuters) – Cyprus’s Finance Minister Michael Sarris said yesterday that a spending package which has drawn criticism from the central bank would not dislodge plans to cut public debt next year. The government, which faces elections in February, came under fire from the central bank on Monday over spending plans it announced last week following an unexpected budget surplus this year. «What we did was a very prudent allocation between spending for today, and saving for tomorrow,» Sarris said. Cyprus, which joins the eurozone on January 1, was still on track to cut its public debt to 48 percent of GDP next year from around 60 percent in 2007, he told state radio. The government announced a series of benefits, ranging from bonuses for pensioners to higher child support which cost 75 million pounds ($111 million). Central bank Governor Athanassios Orphanides, who joins the ECB governing council next month, said the spending package and pledges by other parties contesting the elections were short on detail on how they would be funded.
