Cyprus mulls interest rate cut
By FAMAGUSTA GAZETTE ONLINE STAFF 01.DEC.08
Stockwatch reports that the government is still thinking about an interest rate cut, according to Finance Minister, Charilaos Stavrakis who will be having a meeting with President Christofias soon.
Avoiding entering in further details, Mr. Stavrakis said that he might have a meeting with the CB Governor, Athanasios Orphanides too.
The statements were made during his meeting with the more than 20 ambassadors of the European countries that are based in Cyprus and after Mr. Vgenopoulos statements yesterday that a rate cut would be difficult due to the increased cost.
Mr. Stavrakis clarified that Cyprus is not expected to cut VAT as the UK recently did.
“The 15% VAT that Cyprus imposes is the lowest allowed by the EU. So we cannot cut it further”, he explained.
“Our philosophy is to have the lowest tax ratios in Europe so as to inject additional government expenditure to infrastructure projects. These projects improve the competitiveness of the island’s economy and create additional job posts so as to cover the possible gap that might emerge from the drop in the demand of summer houses by the non-Cypriots”, he noted.
During his meeting with the ambassadors, the parties talked about the EU Recovery Plan released by the EU yesterday.
“The Cypriot economy is benefited by the measures taken by the other countries since the biggest part of the expenditure will be granted to tourism and services.
Referring to the measures that the government is taking, Mr. Stavrakis reminded that there is a team composed of the Ministries’ General Managers, who work hard to increase the degree of adoption of the budget 2009.
“The budget exceeds €1 billion and an increase of 10 percentage points to 80% in 2009 will create a liquidity of €100 million”, Mr. Stavrakis stressed.
“This means that 1% of GDP will be spent for the elimination of the crisis”, he concluded. - Copyright © Famagusta Gazette 2008.
FAMAGUSTA-GAZETTE.COM
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