Cyprus News Agency: News in English, 11-12-14

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

CONTENTS

[01] House approves package of austerity measures

[02] President urges PASYDY to withdraw strike action on election day

[03] Window of opportunity for Cyprus is limited, UN SG says

[04] Security Council passes UNFICYP resolution unanimously

[01] House approves package of austerity measures

The new measures were passed amid major dissatisfaction by the public sector workers whose union PASYDY had staged a three hour work stoppage as a reaction to the new measures.

PASYDY has also decided a 12 hour strike on Thursday.

The parliamentarians approved a two-point hike in value added tax (VAT) from 15 to 17 per cent. The increase in VAT will be implemented as of March 1st 2012 instead of January 1st as the government has suggested which is expected to earn a total of 160 million euro by this new measure.

The plenary also voted a two year freeze of salaries in the public sector and the extraordinary contribution of private sector employees based on the scales and rates which apply to civil servants, also for two years.

MPs voted the targeting of the child and student benefits, which will provide an additional 80 million euro as well as the evaluation of various allowances granted to the public servants.

Furthermore, they approved particular bills for the banks, aiming at their further support and consolidation.

The plenary is schedule to resume tomorrow afternoon in order to vote in the state budget.

Amid the continuing financial crisis and the weak growth of the Cypriot economy, projected at a mere 0.2% GDP in 2012, the government introduced a series of austerity measures that would enable Cyprus to meet its medium term commitments to the EU and particularly for a budget deficit of 2.8 GDP in 2012 and a zero deficit by 2014.

On August 27 the Parliament approved the first fiscal consolidation package with a fiscal impact of 1% GDP or 180 million EUR, while a bill for the increase of VAT rate to 17% from 15%, which would yield an additional 140 million euro to the state coffers, is pending for approval.

The Cabinet also approved a second fiscal consolidation package, incorporated in the 2012 state budget, which would reduce the budget deficit below the 3 per cent Euro area benchmark (2.8%) in 2012. The package provides for the abolition of 939 vacant positions in the public sector, a 10% reduction of the starting salary of civil servants, the introduction of income criteria for the better targeting of welfare spending such as child allowance and student allowance (100 million EUR).

On November 18 the Finance Minister introduced a third fiscal consolidation package aiming at restoring Cyprus` credibility in the international markets. The package provides for the freezing of salary increases in the public sector (including COLA) for two years, with a yield of 355 million EUR, a scaled contribution of high earners in the private sector and the introduction of a 0.5% levy on the turnover of companies with local activities for two years.

According to the EU` new economic governance provisions, Cyprus must take concrete steps for the correction of its public finances. Otherwise a fine of 0.2% GDP will be imposed.

[02] President urges PASYDY to withdraw strike action on election day

PASYDYs decision is part of a series of measures decided on Wednesday by the union during an extraordinary meeting earlier today, in response to new austerity measures affecting civil servants. Many of the measures were approved today by the House of Representatives.

In statements at the Presidential Palace following a Council of Ministers meeting and asked whether Sundays elections would be held as scheduled, President Christofias said that the Government is taking all measures to ensure the elections will take place.

He also called on PASYDY to at least withdraw its decision in relation to the municipal elections because this is too much, as he said.

[03] Window of opportunity for Cyprus is limited, UN SG says

Ban further called on the two Cyprus leaders to engage and make further progress before their next meeting, scheduled for January 2012 in Greentree, Long Island, by accelerating the pace of the negotiations.

Asked what he expects from the January meeting, Ban responded that he has invited the two leaders to Greentree and will spend two days with them. This will be a more intensive negotiation than the previous Greentree meeting Ban added.

He also said that time is quite limited, since Cyprus is going to undertake the Presidency of the EU from July 1, next year. So the window of opportunity for further progress in negotiations is limited. It is politically difficult and sensitive when the Presidency of the EU is part of this and practically speaking, the Presidency of the EU will be heavily involved in all other European issues Ban underlined.

[04] Security Council passes UNFICYP resolution unanimously

The resolution 2026 of 2011 reaffirms all relevant resolutions on Cyprus, and in particular resolution 1251 of 1999, which sets the parameters for a solution providing for a bi-zonal, bi-communal federation with a single sovereignty, citizenship and international personality.

The resolution makes reference to the government of Cyprus, while it calls on the Turkish Cypriot and the Turkish forces to restore the military status quo in Strovilia, which existed prior to June 30, 2000.

The resolution contains no references suggested by the British side, which implied the imposition of timeframes, while the only reference to a multilateral conference on the question of Cyprus is made in connection to an agreement on all internal aspects of a settlement and after securing the consent of the two sides (Greek Cypriot and Turkish Cypriot).

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