Cypriot parliament approves 2015 budget by slender majority

December 17, 2014 10:57 pm 

NICOSIA, Dec. 17 — The Cypriot parliament on Tuesday passed by a slender majority the 2015 budget which the government hopes will lead the economy to a modest growth after a four-year recession.

Despite strongly criticizing the government's austerity policies, center opposition DIKO party sided with center-right governing DISY party to have the budget passed by 29 votes to 26 votes cast by left-wing parties opposing an austerity economic adjustment program agreed with international lenders.

Under Cypriot presidential system the lack of parliamentary majority does not affect the stability of the government, but it makes it increasingly difficult to pass crucial legislation demanded by the island's creditors.

In his budget speech, Finance Minister Haris Georgiades said the budget will help the economy achieve a modest recovery, after it has been in recession since 2011.

International lenders and the government have estimated that Cyprus will record a 0.4 percent growth in 2015, the third year of a strict economic adjustment program.

However, the Central Bank of Cyprus said in its December economic bulletin just released that based on this year's three-monthly results of the economy it revised the projected growth to 1.0 percent of GDP.

The Finance Minister said financial authorities are keeping a close watch on external factors, such as a weak economic recovery in Europe and a creeping Russian recession, which may affect the prospects of recovery.

A slip in the Russian economy may reduce the flow of tourism on which prospects for recovery rest.

Cypriot economy performed much better than projections by international lenders who pulled the eastern Mediterranean island back from bankruptcy in March 2013.

The Eurogroup and the International Monetary Fund provided a three-year 10-billion-euro economic assistance package to Cyprus on condition of following an austerity economic adjustment program and downsizing its banking system.

The budget, drafted in consultation with the troika – the collective name of the European Commission, the European Central Bank and the IMF- provides for a 6.66-billion-euro expenditure and a 5.93-billion-euro revenue, thus pumping about 69 million euros (86 million U.S. dollars) into the real economy. (PNA/Xinhua)

LAM/EBP

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