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Cabinet to examine state budget on Thursday

10/10/2013 11:19
The 2014 state budget will be on the agenda of the Cabinet’s meeting on Thursday.

According to reliable sources, the Cabinet will examine the budget tomorrow and provided there are no changes it will be tabled directly to the House of Representatives. If changes are necessary, the budget will be send the budget to Parliament next week.

The same sources have told CNA that there is continuous consultation between the Government and the Troika on the budget, with Cyprus’ lenders focusing on the macroeconomic scenario.

Troika’s final comments on next year’s state budget are expected during its next visit to the island beginning October 28th, for the second evaluation of the implementation of the Memorandum of Understanding agreed between Cyprus and the Troika.

Finance Minister Haris Georgiades has said that expenditure deductions in 2014 state budget will reach 700 million in an attempt to reduce the public deficit to 0.5 billion euro.

The government seeks to reduce the 2014 state budget by 10% so that it does not exceed 5.5 billion euro in order to bring the deficit down to 500 million euro and ensure primary surplus by 2016, which will in effect help Cyprus return to the international markets.

Excluded from the international capital markets since May 2011, Cyprus appealed in June 2012 for a financial assistance as its two largest banks sought state support after posting mammoth losses due to the haircut of the Greek sovereign debt. The Cypriot authorities and the Troika (EC, ECB and the IMF) agreed last March on a €10 billion bailout. The programme featured a conversion of uninsured deposits to capital in a bid to recaptalise the island`s largest lender, Bank of Cyprus, whereas Cyprus Popular Bank, the island`s second largest bank is to be wound down.