Central Bank Governor, Christodoulos Christodoulou said on Friday that if the government doesn’t take the proper measures for fiscal consolidation, Cyprus’ accession in the EMU will not be feasible in the next two to three years. In his attempt to emphasize that the island’s accession in the eurozone is of great importance, Mr. Christodoulou urged the political parties to assist the government, which must take certain practical measures to reduce the fiscal deficit (which is double than the relevant Maastricht criterion and the public debt.

“With a fiscal deficit at around 6%, it is difficult to be optimistic for a Cyprus accession in the EMU in 2 – 2.5 years. It is an issue that concerns all the Ministers and all political parties”, the CB Governor noted.

The Cyprus economic reality is in the position to deal successfully with the economic and fiscal demands of the eurozone, so long as political decisions are taken on time, Mr. Christodoulou said, stressing that the Finance Minister, Marcos Kyprianou agree with the CB position.

“What the Central Bank intends to do in the next few months is to observe whether the government is taking the proper political decisions for the reduction of the deficit and the public debt. The Central Bank expects a number of measures that will deal with the problem”, the Governor said.

“The Cyprus President and the Finance Minister are well aware of the CB positions on the drastic drop in spending and the increase in revenues. The Central Bank, though, has not submitted its proposals on the measures yet, as it is still on the stage of acknowledgement of the problem”, Mr. Christodoulou said.

On his statements within the framework of the Monetary Policy Committee’s announcement to leave the interest rates unchanged, the Governor reiterated that “the Cyrus economy in 2004 will perform in a satisfactory way, if no other unexpected and negative facts arise in international politics.