Otherwise, the imbalances will become excessive, a development that will put the Republic of Cyprus in adventures focusing on the obligation of Nicosia to submit a special action plan, with a clear roadmap and timetable.
The representative of the Vice-President of the Commission Olli Rehn, Amadeu Altafai Tardio, stated that "Cyprus must take action" to implement the seven recommendations of Brussels.
The warning comes at a time when the government is receiving strong criticism for its procrastination in taking action, and the President of the Republic points out that the world is not lost if the budget deficit rises from 2,5% to 3%.
A pledge made in Brussels by then-Finance Minister Kiki Kazamia, who accepted the presidential challenge during a press conference on internal governance.
The representative of the Vice-President of the Commission explained that the urgent need for measures in the case of Cyprus has a triple starting point:
"The extent and scope of the imbalances found in Cyprus, as well as the potential negative side effects on other Eurozone economies, create the need for a comprehensive settlement and decisive political action on a firm basis, as a matter of urgency", reference to the taking of additional measures in order to reduce the deficit of the Cypriot economy to 1% of GDP by the end of 2,5.
2. "The heavy exposure" of the Cypriot banking sector to the Greek economy and the financial sector, which, as he stated, "have a significant impact on the Cypriot economy". In the light of these data, "the recapitalization of Cypriot banks must be closely monitored".
3. "The high level of accumulated private sector debt has also been identified as a source of concern." In addition, the spokesman noted that the degree of household debt in Cyprus is one of the highest in the EU, mainly due to loans granted for housing purposes.
Source: FILELEFTHEROS