The Minister of Finance, Takis Klerides, on his speech over the State Budget of 2003 in Parliament has praised Cyprus economy for its achievements, as well as for the successful completion of enlargement negotiations with the EU.
The Minister seemed fairly optimistic and satisfied, mostly due to Commission’s Report and the EU evaluations over the achievements of Cyprus economy. The Minister has also attempted to convince the Legislative Body that the economy is based on strong foundations.

Then, Mr. Klerides pointed out that although Cyprus economy is affected by the continual recession of international economy, the Government – “through irrefutable data” - has made a huge progress in the social-economic sector.

Finally, the Minister highlighted that “Cyprus economy has managed to handle well with challenges” and he added that “economy is on the right track, ready to head a new era”.

The speech of the Minister of Finance, Takis Klerides, is as follows:

The Minister of Finance Mr. Takis Klerides, in his address today to the House of Parliament on the occasion of the discussion of the Budget for the year 2003, analysed the current economic developments and the prospects for next year, as well as the overall strategy and the economic and social policy of the Government.

The Minister referred to the prevailing uncertain economic climate, exacerbated due to the recent developments in the Middle East and Iraq but also to the great achievement of the Republic of Cyprus regarding the anticipated successful completion of the accession negotiations with the EU. The Regular Report published by the European Commission emphasizes the sound fundamentals of the Cyprus economy, which is assessed to be ready to successfully confront the challenge of integration into the EU and confirms the achievements of Cyprus in the economic sphere in the last years.

In his speech, Mr Klerides outlined that during 2001 and 2002 the Cyprus economy faced and is still facing an adverse external environment. Nevertheless, as the Minister pointed out, the Government set specific strategic goals and succeeded in achieving them. These include the positive record in macroeconomic stability, manifested in the low inflation rate and the containment of the fiscal deficit below 3% of GDP, thus fulfilling the corresponding Maastricht criterion, the improvement of the standard of living, the enhancement of competitiveness and the modernization of the public sector.

The Minister of Finance added: “The epitome of the achievement of the ambitious goals set by the Government is the fact that Cyprus today is internationally acknowledged as a respectable economy, characterized by high credibility and the high standard of services it provides”.
The Minister of Finance made special reference to the economic and social policy of the Government based on the Strategic Development Plan and on the Revised Pre-accession Economic Programme, 2001-2005, which was submitted to the EU.

Mr. Klerides stressed that the targets included in these two programs are based on three pillars “Growth-Competitiveness-Reforms”.

In other parts of his speech, the Minister referred to the generous agricultural policy pursued by the Government, the continuous restructuring of the manufacturing sector, through the encouragement of the introduction of new technology and the high growth of the service΄ s sectors, in which Cyprus possesses comparative advantages. In particular, Mr. Klerides pointed out that an indispensable part of the Government’s policy is “…the smooth transition and restructuring of the Cyprus economy, with services playing a dominant role, and the exploitation of the opportunities arising from new technology and new economy”.

The Minister also referred to the significant institutional progress achieved in the financial sector. As concerns the social policy, Mr. Klerides mentioned various programs promoted by the Government, which target further social cohesion.
In his speech, the Minister of Finance gave emphasis to the recent tax reform and its positive effects on the economy and social welfare.

The Minister of Finance stressed that the significant increase of the tax exempted income to £10.000, the reduction of income tax rates accompanied by the decrease of corporation tax to 10% for both, local and international enterprises is expected to boost the economy and enhance at the same time, the role of Cyprus as an attractive international business centre.

The Minister of Finance said that the economic policy followed by the Government targets to maximizing prosperity for the people of Cyprus through EU accession. He concluded, by expressing his confidence saying, that the people of Cyprus will fulfil their vision of freedom, prosperity and security.