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For the first time since the establishment of the Republic, the Budget is unified with the separate budgets for state expenditure, development, refugee relief and defence, all merged into one.

With the unification of the budget every ministry, government department or service will present their activities in a single document showing clearly the volume of their budget per sector targets.

Public spending is set at 2,238.8m pounds, an increase of 301.3m or 17 percent over 1999, and revenue at 1,366.5m, 249m more than in 1999. This increase is due to the 181.5m pounds in defence spending, which has been included in the new Budget.

Regarding the development spending 58.3 m pounds will be spent on roads, 21.8 m on water development, 143m on airports, 19.9m on town and sewage planning, 19.9m on education and a separate amount of 15.2 m on the University of Cyprus, 3.3m on culture, 17.2m on agriculture, 15.8m on health, 15.6for industry and 18m on government buildings.

The Government forecasts encouraging economic prospects for 2000 with 4 percent economic growth. Unemployment will be slightly reduced to 3.4 percent, while inflation will be around 1.7 percent.

Cyprus Finance Minister Mr Takis Klerides, speaking to the press said he was concerned about the fiscal deficit, which could reach 357.4m pounds or 6.9 percent of the GDP. Corrective action must be taken to boost public revenue, he said

Mr Klerides explained that part of the deficit would be covered by a package of new taxes, which will be submitted to the House of Representatives.

He indicated that the VAT would be increased from 8 percent to 10 percent. Other parts of the deficit will be covered by internal loans. Direct taxes account for 430.5 m pounds in the new budget, while indirect taxes account for 525m pounds.

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Speaking at a special dinner organised by the Hellenic American leadership in Washington, after being awarded with the "1999 Frizis award", Mr Moses said that that the way forward "is through comprehensive talks without preconditions consistent with the G8 statement and the UN resolutions".

"We are committed to go forward. I know there is frustration but you must not give up. We are at the early stages of this effort with a long way to go. Be strong, firm and courageous, and speak out on the issue. We are committed to do all we can to bring finally peace, security and unity to the island of Cyprus", he concluded.

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Speaking at the first annual Conference of the Intercontinental Consultants (ICC), the Minister of Commerce and Industry Mr Nicos Rolandis described Cyprus as a well developed European country with its economy growing at a satisfactory pace exhibiting signs of macroeconomic stability.

Mr Rolandis said that attracting foreign investments is amongst the primary objectives of Cyprus' development policy since it contributes to the transfer of know-how and the introduction of high technology and facilitates further the expansion of exports.

He pointed out that foreign investors are now being allowed a greater participation in investment projects. With the intensification of competition and the globalisation of the world economy, the government has announced a bold new industrial policy, which provides incentives for the introduction of high technology into Cyprus, the attraction of foreign investments and the creation of joint ventures, he added.

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The Cyprus Ambassador briefed Mr Schwimmer on the latest developments in the Cyprus problem. They also exchanged views on relations between Cyprus and the Council of Europe, as well as ways of further enhancing them.

From the Republic of Cyprus Press and Information Office (PIO) Server at http://www.pio.gov.cy/

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