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No further public payroll cuts

27/04/2015 12:21
Cyprus President Nicos Anastasiades reiterated his commitment that no further taxes and salary cuts will be imposed by his government, stressing that state operational expenditure including the public payroll should be rationalized if further austerity measures were to be avoided.

The President’s comments came at the Pancyprian Public Employees (PASIDI) annual meeting.

He noted that his government imposed a voluntary 0.2% salary reduction in the public service with a view to safeguarding 2.500 job spots in the public sector. Anastasiades assumed office in March 2013 as Cyprus` baking sector was at the bring of collapse and the state came close to bankruptcy. Anastasiades` government concluded on April 2013 on a €10 billion financial assistance package that featured salary pension cuts negotiated by the previous government, as well as haircut of deposits over €100,000 to recapitalise the island`s largest lender.

Stressing that his government will not impose further salary cuts, Anastasiades noted that “we will continue to follow this prudent policy and in this context we should make sure that the public operating expenditure increase, including the wage-bill should be made in rational manner and in the framework of the economic capacity,” he said.

Furthermore, the President expressed optimism on the future of the economy.

“Our economy is registering a continuous and notable progress with a rapid correction if the depth of the financial crisis is taken into account and if we compare (the course of the economy) with the course of other states that faced similar problems,” he said.

He recalled the recent lifting of the capital controls imposed two years ago, the approval of the insolvency framework, the string of upgradings by rating agencies but the economic figures “that allows us to be optimistic on the future.”

“Now we can focus on the structural reforms, the conclusion of which will allow our country to return on a lasting growth path,” he added.

The reforms, he said, include the mobility in the public sector and the change of the appraisal system as well as growth-friendly reforms such as streamlining decision-making process, a new regulating process for tourism and other sectors.

In his speech, House President Yiannakis Omirou said that employees of the public and private sector made sacrifices because of the economic crisis and they should not be seen as the `easy way out` for further reductions.

He added that the fiscal indicators of the economy record a significant improvement and this is due to the sacrifices of the Cyprus society and the citizens.

House President noted however that the decrease in the growth expenses and the reduction in the family income and thus the consumption by the citizens cut back the prospects for the recovery of the economy.

He also said that the public sector plays a very crucial role in the area of foreign investments, pointing out the need for further changes and for restructure. Omirou said however that although the datelines for the restructure of the public sector are tight, time should be allowed for constructive dialogue.

Omirou also said that all those responsible for the collapse of the Cyprus economy should be brought before justice and all those investigations underway should yield results.