Cyprus News Agency: News in English, 11-11-28

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

CONTENTS

[01] President and main opposition leader discussed austerity measures

[02] Christofias and Eroglu continue Cyprus talks on Monday

[03] Cypriot FM pays official visit to Jordan

[04] CIPA Chairman stresses prospects of foreign investment in energy

[01] President and main opposition leader discussed austerity measures

The meeting, which was held early in the morning at the Presidential Palace, was also attended by Finance Minister Kikis Kazamias and Deputy Chairman of Democratic Rally Averof Neophytou.

In statements to the Press after the meeting, Kazamias said that there is consensus on the measures recently proposed, expressing the belief deliberations on the measures will be completed by December 8, when he will present the State Budget 2012 to the Parliament and before the voting on the Budget scheduled to take place December 15.

The Minister said that by December 15, all pending issues must be agreed on and Cyprus will send the right messages abroad. The European Commission requests that measures be adopted prior to December 15, to ensure budget deficit reduction below 3% of GDP by 2012.

Democratic Rally leader said that there are convergences on some issues, adding that different views had been expressed on others.

The Cypriot House of Representatives has already approved the first fiscal consolidation package on August 27. A second package of measures is incorporated in the 2012 state budget, as well as a proposal for the increase of VAT from 15 to 17%. If these measures are approved Cyprus will reduce its budget deficit below the Euro area benchmark and particularly to 2.8% of GDP. On Friday, November 18, Finance Minister Kikis Kazamias proposed a third set of measures including the freezing of salary increases in the public sector, (including COLA), for two years a measure that will save 355 million, a scaled taxation of private employees with a monthly salary of 2,500 euro and above and the introduction on a 0.5% levy on the turnover of companies with Cypriot operations for two years.

Cyprus must put in place by December 15 fiscal consolidation measures that would reduce its deficit below the 3% benchmark. Otherwise, the European Commission will impose a fine of 0.2% of GDP.

[02] Christofias and Eroglu continue Cyprus talks on Monday

The meeting will begin at 1500 local time and the leaders of the two communities are expected to discuss governance and power sharing.

After their last meeting on December 16, the UN Secretary General`s Special Representative in Cyprus Lisa Buttenheim had said that the leaders set their meetings for the next couple of months and that there would be one meeting a week.

She added that the UN would be holding separate meetings with the leaders of the two communities.

[03] Cypriot FM pays official visit to Jordan

During the visit, Markoullis met Prime Minister Awn Shawkat Al-Khasawneh, Foreign Minister Nasser Judeh, President of the Parliament AbdulKareem Al-Doghmi, as well as President of the Senate Taher Al Masri.

The Minister briefed the leadership of Jordan on the latest developments in the Cyprus issue as well as Turkey`s aggression and threats against Cyprus` sovereign right to explore and exploit any hydrocarbon reserves in its Exclusive Economic Zone.

The Cypriot Foreign Minister referred to the excellent level of bilateral relations with Jordan and said that agreements signed between the two states should be implemented to deepen their cooperation in the fields of education, archaeology, renewable energy sources, water shortage and water management.

Markoullis described Jordan as a long-lasting stability factor and an important key player in the region, stressing that Cyprus attaches great importance to its relations with Amman.

[04] CIPA Chairman stresses prospects of foreign investment in energy

In an interview with Cyprus News Agency, Angastiniotis analysed the priorities of CIPAs newly appointed Board of Directors and the fields and countries that Cyprus should focus in order to attract foreign investment. He pointed out the great interest of many countries, such as China, Russia, France and Norway, in investing in the field of energy in Cyprus. He also noted that income from hydrocarbon reserves should be used on a long term basis. In addition, Angastiniotis commented on the Finance Ministers fiscal consolidation measures announced in November, noting that the levy on the turnover of Cypriot firms for the next two years would harm entrepreneurship and would have negative effect on the economy.

Asked about amendments to existing legislation to boost investment, Angastiniotis said that the Committee on Institutional Framework has prepared legislative proposals on tackling bureaucracy and on many other issues, that have been adopted. There are however, many more proposals that are pending and many other ideas that will be prepared. In addition, he said that the Committee on Institutional Framework is preparing the Double Taxation Agreements, noting that such an agreement with Kazakhstan has already been prepared.

Replying to a question on CIPAs results, Agastiniotis said that many foreign companies have invested in Cyprus through CIPA. There is still room for additional investments, he said, noting that especially now, with the prospects of finding hydrocarbon reserves in Cyprus EEZ, the potential for attracting foreign investments is much greater. Asked to elaborate on this issue, Angastiniotis said that there are inventors from China, Russia, France and Norway who are interested in investing in energy in Cyprus. It is the sector that will be in the epicenter during the next years in Cyprus and we should deal with that very carefully, he pointed out. Noting that the issue of hydrocarbon reserves has its political aspect, he said that the Government is right in proceeding with the second hydrocarbons licensing round in Cyprus EEZ.

If we say that, in the worst case scenario, the reserves from the block 12 cover the needs of Cyprus for the next 80 years and that there are reserves in the other blocks for which the government has proceeded with the second hydrocarbons licensing round - then the field of energy constitutes the most promising sector for foreign investment and it could save our economy, he stressed. However, he noted, we should deal with that issue by thinking on a long term basis, following the model of Norway. Thus, we could cover some immediate needs with the income from the natural gas, but at the same time we should establish a national reserve fund which would provide the Republic of Cyprus with constant annual income for covering part of the expenses of the Republic and for providing prosperity to the people of Cyprus.

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