NEWS

Nicosia needs 510 mln euros

NICOSIA (AFP) – Cypriot Finance Minister Markos Kyprianou said yesterday the government needed an extra 300 million pounds (510 million euros) to put Cyprus back within EU convergence criteria due to mismanagement by the previous administration. Kyprianou told a parliamentary committee the last government had failed to budget properly for the EU accession process. «We are trying to rectify the damage left behind by the previous government,» he said. He said the budget deficit was much larger than originally thought. «We have a deficit double that forecast and a huge debt. Thanks to the previous government’s policy, we are outside all the Maastricht criteria.» Cyprus’s central bank recently warned that the economy was heading in the wrong direction as the fiscal deficit (currently at 5.3 percent of GDP) threatened to spin out of control and was already outside the Maastricht criteria of 3 percent. The bank urged spending cuts, but Kyprianou’s admission the government needed additional spending has made this task more difficult, especially as he has ruled out tax hikes.