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Cyprus President Demetris Christofias, his ministers and other state officials have volunteered to take a 10% pay cut, as a gesture to boost the economy of the island by trimming state spending.  

 

The President expressed hope that the example will be followed by other officials such as the House President and the MPs.

 

“We have voluntarily agreed to reduce our earnings – salaries and benefits – by 10 per cent. I hope the example is followed by others,” Christofias said during the second of two news conferences in a week to mark his two years in office.

 

The President recently conceded that the civil service was over sized, costing the state around €2 billion a year to maintain. However he does not seem willing to go head to head with the civil service union PASYDY in a bid to cut the general state payroll.
 

President Christofias said the main factor affecting the Cypriot economy was the global economic crisis.

 

“Everyone thought Cyprus would suffer less … unfortunately we did not,” Christofias said. “We got hit by this storm of the global economic crisis.”

 

Cyprus has lost €1 billion in revenue from a fall in tourism and construction but also a cut in consumption. However he said Cyprus can tackle the crisis and its effects without the EU forcing the island to take tough measures like Greece has to.
 

Whilst the government did not intend to introduce new taxation there were some things imposed by the EU like VAT on basic stuff, he said. The EU imposes a 5% VAT on basic goods.

 

“We are trying to postpone the introduction of this tax if the EU allows us,” Christofias said.

 

As regards development projects implemented by the government, Christofias said that minor and major projects have been concluded or are under way, referring to the construction of roads, schools, and the replacement of irrigation systems.

He added that major projects such as highways and marines in Limassol, Ayia Napa and Paphos are underway.

 

  
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