ECONOMY

Cyprus’s Papadopoulos will spend if re-elected

NICOSIA (Reuters) – Cypriot President Tassos Papadopoulos said yesterday he would cut income tax and increase pensions if he were elected for a second five-year term on February 17. Papadopoulos, who is fighting off a close challenge from two key rivals, said yesterday he would also increase welfare benefits and further cut public debt levels – slated to fall to 48 percent of gross domestic product this year. «These measures will not in any way impact the economic robustness of the economy or of its key indicators,» Papadopoulos said. He said his package, excluding pension increases, would cost the state an annual -157 million. Pension increases would cost -355 million, he said. Papadopoulos’s administration wrestled down deficits and public debt levels, ushering the island into the eurozone on January 1. The island is forecast to return a surplus of 0.5 percent of gross domestic product in 2008 after a 1.5 percent surplus in 2007. Critics accuse the administration of only attempting to balance the books without investing in long-term growth potential. «This government built a myth that it increased our average income, but the per capita income of a Cypriot is lower than that of a European, and our cost of living is much higher than the European average,» said Averof Neophytou, the vice chairman of the opposition Democratic Rally party.