Cyprus Mail
Letters

It is essential the government reduces its outgoings immediately

Is is imperative to reduce the current outgoings by the government.

Cyprus’ financial position is extremely precarious -the current budget surplus has to be looked at in relation to national debt which is already way too high. It’s credit rating is not high enough to enable it to borrow money cheaply and it has no control over its money supply

It has abnormally high NPL rate already, consumer indebtedness is amongst the highest in the EU and the banks are still in an extremely precarious footing having not yet recovered from the last crisis.

It is taxation from tourism and shipping along with income deriving from passport sales that keep the whole shebang ticking over. You can see all three of those nosediving in the short them, and in some cases possibly for years.

So yeah, every penny they can save just now for the upcoming storm is gong to be crucial. Cyprus’ current debt will require it to run a budget surplus for decades – civil service salaries probably were needing cut before this, it is now going to be essential, and the sooner the better.

KI

Our View: The public payroll should be reduced as soon as possible



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