Market Commentary and Intraday News
Barroso urges Cypus to reach austerity consensus
253 days ago
(AP:NICOSIA, Cyprus) EU Commission President Jose Manuel Barroso urged political leaders in Cyprus on Monday to agree on austerity measures needed for a deal to bail out its ailing banks and to help the cash-strapped government cover its expenses.
Barroso said it's "critically important" for the government, opposition parties, trade union and business leaders to "come to some level of consensus" on spending cuts and tax hikes that meet targets set by the country's potential creditors _ the "troika" of the European Commission, the European Central Bank and the International Monetary Fund.
"I know that if they understand correctly how challenging the situation is, there will be the capability to overcome the current situation," Barroso told a joint news conference with Cyprus President Dimitris Christofias.
Recession-hit Cyprus asked for international aid in June to prop up its banks, which have been exposed to Greece's economic woes. That exposure triggered a slide of the country's credit rating into junk territory, preventing it from borrowing on the international markets.
Christofias outlined the measures _ in line with a troika-set target of about (EURO)1 billion ($1.3 billion) _ to party leaders last week and follow-up meeting is scheduled for next week. But opposition parties criticized the measures as insufficient, too tax-heavy and not addressing ways of spurring growth.
The government wants to clinch political backing for the measures before the end of month when it hopes to have signed an agreement with troika officials, allowing for the first batch of bailout cash to arrive in December when state coffers start to run empty.
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