Cyprus News Agency: News in English, 10-05-12

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From: The Cyprus News Agency at <http://www.cyna.org.cy>

CONTENTS

[01] NATIONAL COUNCIL PRESIDENT POSITIONS

[02] COMMISSION CYPRUS - EDP

[03] CCB GOVERNOR INFLATION - PRESSURES

[04] EUROSTAT CYPRUS GDP

[01] NATIONAL COUNCIL PRESIDENT POSITIONS

Speaking after Wednesdays meeting of the National Council, the top advisory body to the President on the handling of the Cyprus issue, Stephanou said that President Christofias outlined his positions on issues and questions concerning the Cyprus problem, raised during previous Council meetings.

The National Council convened on Wednesday in view of the resumption of the UN-led direct talks on 26 May with the new Turkish Cypriot leader Dervis Eroglu. This is the fifth consecutive meeting the National Council has held since the 26th April, in which parliamentary parties - members of the Council - discussed issues that concern the Cyprus problem. The next meeting will take place on Wednesday, May 19.

The President has summarized several issues discussed so far and it has been agreed that during the next meeting of the National Council, the discussion on various issues, including those that the President has summarized, will continue, Stephanou said, noting that the political parties that make up the Council can submit to the Council specific concerns before the next meeting which could be taken up for discussion.

Asked to comment on statements by the Secretary General of the Cyprus Green party that President Christofias might be open to discussion on a proposal on a rotating presidency, in a future federal Cyprus, Stephanou said that President Christofias position on the executive power and on amendments and withdrawal of positions from the negotiating table are well known.

The process of direct negotiation, he stressed, is open and it is taking place on the principle that nothing is agreed until everything is agreed.

There is continuous assessment and evaluation of the negotiating process and if the President, who is the negotiator of the Greek Cypriot side, decides to do so, at any given moment, he can amend, withdraw and replace his positions. This is something the President has said very clearly right from the start, he pointed out.

Replying to another question about the first meeting between President Christofias and Turkish Cypriot leader Dervis Eroglu, the Government Spokesman said that the Greek Cypriot side should be very patient and show self-restraint in order to see how things are shaping at the negotiating table.

[02] COMMISSION CYPRUS - EDP

According to a press release, the European Commission examined on Wednesday the updated stability programme of Cyprus, which was submitted to the Commission on 13 April 2010. This follows the Commission`s previous assessments of the stability and convergence programmes of 25 Member States on 17 March, 24 March and 14 April. The evaluation takes place against the background of the economic and financial crisis, which has led to a sharp deterioration of public finances since 2009 and triggered the opening of the Excessive Deficit Procedure (EDP) for a large majority of member states.

``I welcome the fact that the Cypriot authorities show their willingness through the stability programme to bring the general government deficit below 3%, even though the Excessive Deficit Procedure is not yet fully underway. However, the programme aims to correct mainly by the revenue side, while expenditure is at a historically high level. Also, there are downside risks to the adjustment path from favourable growth assumptions``, said Economic and Financial Affairs commissioner Olli Rehn. The stability programme update of Cyprus reflects the severe impact of the current crisis on its public finances, with an estimated deficit of 6.1% of GDP for 2009 and a rising government debt ratio, which is forecast to breach the 60% of GDP reference value in 2010.

The Cypriot update aims at gradually reducing the government deficit below the 3% of GDP reference value by 2013, mainly through revenue measures. However, the favourable macroeconomic assumptions throughout the programme period may imply a lower contribution of economic growth to fiscal consolidation than envisaged and the adjustment path.

[03] CCB GOVERNOR INFLATION - PRESSURES

``The upward tendencies in the domestic inflation continue lurking and are more intense compared with the rest Euro area and as a result the competitiveness of our economy is being further affected,`` he added. He also cautioned that the claims submitted by the social partners should always reflect the developments in the productivity and competitiveness while taking into account the economic realities and the chain reactions, which these claims would have on the economy and the country`s interest in the long-term.

He recalled figures from Eurostat according to which, income per employee in Cyprus increased by 2.9% in 2009 compared to an increase of 1.4% in the Euro area, while productivity declined by 1.1% in Cyprus and by 2.2% in the Euro area.

In her address, Cyprus Minister of Labour and Social Insurances, Sotiroulla Charalambous, said that the banking sector in Cyprus constitutes an important parameter of the economy with an increasing contribution to GDP. Noting that Cyprus has also been affected and continues to be affected negatively from the financial crisis affecting the rest of the EU member-states, Charalambous pointed out that Cyprus did not observe massive bankruptcies, neither huge economic losses observed elsewhere, as the banking sector continues to be credible, enjoying the confidence both of the citizens and the businesses. She pointed out however that in the framework of the EU and the Euro area, the credibility of each banking system does not work in isolation but is interdependent with the other member-states and above all on the condition that the European National Central Banks respond effectively to the modern environment.

[04] EUROSTAT CYPRUS GDP

Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 0.5% in the euro area and by 0.3% in the EU27 in the first quarter of 2010, after -2.2% and -2.3% respectively in the previous quarter. GDP in Greece decreased by 0.8% during the first quarter of 2010 marking the highest reduction among the states of the eurozone.

According to the Flash Estimate compiled by the Statistical Service of the Republic of Cyprus, the GDP growth rate in real terms during the first quarter of 2010 is negative and estimated at -2.4% over the corresponding quarter of 2009. Based on seasonally and working day adjusted data, GDP growth rate in real terms is estimated at -2.3%.

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