REPORTERNET.COM

Government Spokesman Stephanos Stephanou has said that Cyprus' credit rating downgrade by Moody’s was expected, especially after Eurozone’s decision on a 50 percent haircut on Greek bonds and taking into account the connection between the Cypriot banking system and the Greek economy.

Stephanou said that since various rating agencies had started to downgrade Cyprus economy they always posed as a reason the exposure of Cypriot banks to the Greek economy.

He noted that the Government in collaboration with the Central Bank of Cyprus is taking measures to support the banking system of Cyprus ensuring that it will respond to the greatest extent possible to potential problems that it may face due to developments in the Greek economy.''

Spokesman said that ''it is obvious that the world financial crisis has highlighted problems of the economy which have built up for decades and were hidden under the carpet and they came to the surface due to the financial crisis”.

At the same time, he added, the world financial crisis highlighted the need to take decisive action to tackle the structural problems facing the Cypriot economy'', noting the Government has been doing that with determination from the very beginning.

He stressed the over the last three years this government had taken decisions on the Cypriot economy, which had never been taken before in order to deal with all those problems building up for decades.

He said that this is a difficult effort and urged everyone involved to cooperate in order to take all necessary measures to achieve fiscal consolidation and handle the challenges of the banking system.

(Source: Famagusta Gazette)