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Cyprus, economy, finance, KEVE, Money, politics, President Demetris Christofias

President Demetris Christofias addressing the national council yesterday on the Cyprus issue

THE government is determined to continue efforts for fiscal consolidation, President Demetris Christofias said yesterday, as he called for an end to “extreme confrontations” over the economy that ultimately hurt public confidence.

“At the moment, Cyprus’ market needs calm and stability,” Christofias told businesspeople attending the trade and industry chamber’s (KEVE) AGM. “Calm and stability in the market requires political stability and avoidance of intense and extreme confrontations on the economy, which scare consumers.”

He said psychology played an important role in the economy and scare-mongering created a vicious circle, which hurts entrepreneurs, workers and Cyprus.

The opposition has heavily criticised the government in the past couple of days over delays, as they say, in taking measures to shore up the economy.

The delay, the opposition said, has led to multiple downgrades from ratings agencies, pushing Cyprus’ credit rating close to junk.

The government said it is taking measures and accused the opposition of scare-mongering.

On Tuesday, Finance Minister Kikis Kazamias said the government would look into passing new measures, beyond those passed in August and those included in the 2012 budget.

“The government is determined to continue its effort for fiscal consolidation and improvement of the state finances,” Christofias said earlier yesterday.

Speaking at a conference organised by trade union SEK, the president also highlighted “our will to improve the state’s tax-collecting ability and to stamp out tax evasion.”

Unions have repeatedly demanded better tax collection and a crackdown on tax evaders, which they say cost the state millions in lost revenues.

Legislation aimed at fighting tax evasion are currently being discussed in parliament. 

However, potential gas reserves offshore Cyprus would be of decisive importance for the economy and its growth prospects, Christofias said.

“The possible discovery of a hydrocarbon deposit will give prospects for big and long-term financial growth that would benefit today’s and future generations,” Christofias said. “We expect that such a development will have immediate benefits for the Cypriot economy since it will raise investment interest significantly.”

The economy will be discussed by the cabinet tomorrow.