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Risk of default

08/04/2013 10:45
Accountant General, Rea Georgiou told the House Finance Committee that on April 18 the state runs the risk of default.

Currently, the short-term internal state borrowing from banks and semi-governmental organizations stands at €966,7 million.

Ms. Georgiou said that due to developments in Cyprus, the anticipated amounts relating to public revenue is extremely difficult to predict, so the General Accounts Office has readjusted its forecasts for the next few months.

The Accountant General noted that in April the tax collection departments of the state such as VAT, IRD and Social Insurance Fund have announced extension to the payment deadline. As a result, April shows a deficit of €160 million.

"This, provided that the above Short-term debt will be renewed fully," he added.

Ms. Georgiou noted that the special reserve of the Cyprus Central Bank amounting to €85 million is not enough and it needs immediate funding of €80 million before April 24 to avoid default.

"If," she said, "in some of the monetary institutions the updates of bills expire let’s say on April 16, there will be a problem to meet the state’s financing needs on April 18. If not renewed, the amounts grow accordingly”.