ECONOMY

In Brief

Cyprus to create savings, generate revenue NICOSIA (Reuters) – Cyprus unveiled a fiscal package yesterday aimed at generating savings and additional revenue of 500 million euros annually to plug deficits seen busting eurozone limits in 2010 and 2011. Finance Minister Charilaos Stavrakis said the package was primarily designed to lower fiscal shortfalls and send a signal to financial markets that Cyprus – a rare issuer – was not lax on the fiscal front, a perception which could force it to pay a higher premium on debt. «I am more focused on the discipline of the markets. International markets are needed to cover needs of the public sector,» Stavrakis told journalists. According to European Union projections, Cyprus will face a deficit of 5.7 percent of gross domestic product in 2010 and a public debt of 58.6 percent. «We are doing very well here, and compared to the rest of the eurozone and the EU we are well placed,» Stavrakis said, referring to public debt. Standard and Poor’s rates Cyprus A+. Fitch has a AA- rating on the Mediterranean state and Moody’s rates Cyprus Aa3. The island tapped international markets for 1.5 billion euros last May. Referring to 2010 deficit projections Stavrakis said: «If the EU speaks of a deficit of 6 percent and we have an aim of 3, we need 500 million euros a year to improve public finances.» Stavrakis’s package contains no new taxes but will introduce higher tax on property other than a home by adjusting valuations on real estate unchanged for 30 years. Authorities will also pursue cutbacks in benefits and stamp out tax evasion. Turkey’s biggest lender sees 15 pct loan jump The loans of Turkiye Is Bankasi AS, Turkey’s biggest listed bank, may jump 15 percent next year after shrinking in the first nine months of 2009, Chief Executive Officer Ersin Ozince said. «We can grow 15 percent if competition in interest rates doesn’t get too aggressive,» Ozince said in an interview in Istanbul on December 25. «If we have to sacrifice profit, then we won’t grow as much and growth will be around the lower end» of a target range of 12 to 15 percent for loans and deposits. Turkish banks posted higher profits this year as falling interest rates boosted the value of their bond portfolios and widened the margin between loans and deposits. Lending may be less profitable this year, even as the economy grows, because the central bank is expected to keep rates on hold and then start raising them. (Bloomberg) Mixed recovery European countries are likely to recover from the economic crisis at varying speeds in 2010 although some will need to move sooner than others to rein in their budget deficits, a senior International Monetary Fund official said on Monday. Marek Belka, director for the IMF’s European Department, said while some stimulus measures will still be needed next year to help the recovery strengthen, 2011 will be the year for fiscal consolidation. He said countries such as Greece, Ireland and Spain, whose debts are extremely high, cannot wait until 2011 to take control of their ballooning deficits and will need to act sooner. (Reuters) Road tax Greece’s Finance Ministry said yesterday it will give car owners an addtional two weeks to pay annual road tax. The deadline for payment of the 2010 levy has been pushed back from December 31 to January 15.