Georgiades argued that “prudent planning” was not the same as austerity. It was the safest way out of the economic downturn, he said. “This is not austerity, it’s credible fiscal planning,” he told public radio CyBC.

“It calls for sensible public spending increases linked to economic performance. A 1.5% to 2% increase in public spending over the next few years is not negligible, since it is an approximate reflection of economic growth during this period.” He argued that imprudent spending would be the very recipe for further austerity.

“Actually, austerity would be a repeat of the recent past, with the levy of taxes and new rounds of wage cuts,” the minister said.

“None of that has happened over the last two years, nor will there be any such need in the coming years. We have to learn from our past mistakes. We can’t plan public finances independent of economic performance, thus creating deficits that will be repaid by the taxpayer and businesses. That is a policy the government will not repeat.”

Defending the modest spending plan, Georgiades argued that there were enough spending hikes to achieve targets without derailing finances.

“In 2016 there is a projected increase in public spending of €100 million, which safeguards the achievement of targets without expanding deficits and prompting new measures by imposing new taxes,” he said.

In the report, the Finance Ministry said it aims at generating a primary surplus of 2.5% of gross domestic product in 2016 and 3% for each of 2017 and 2018 and said that it had set a cap on government expenditure budgets for the next three years.

Source: Cyprus Mail