Akel fails to stop bills for common currency

By Bouli Hadjioannou

LANDMARK legislation allowing Cyprus to adopt the euro on target next January was approved by a comfortable majority last night, despite opposition from senior coalition partner Akel.
At the end of an unusually mellow debate, the House of Representatives adopted four bills preparing Cyprus for eurozone entry by 36 votes to 15 – just before a European Central Bank (ECB) deadline was set to expire.
The laws complete Cyprus’s legal convergence and set the framework for the preparations needed to ensure a smooth transition to the European common currency.
The EU and the ECB are expected to rule on Cyprus’s application in the early summer.
The official conversion rate is expected in July, ushering in a dual display of prices to get consumers accustomed to the new currency.
Legislation covers the conversion process, dual pricing, dual circulation and measures to combat profiteering.
MPs hailed the vote as a historic move that places Cyprus on the threshold of the eurozone and bolsters the island both economically and politically.

Benefits

While acknowledging the changeover could bring some problems at the beginning, MPs insisted that benefits far outweighed any difficulties.
Akel remained the sole voice of dissent, insisting on a one-year delay to allow for more generous social benefits and ensure better preparations.
The uncharacteristically civil tone of yesterday’s 150-minute debate came in stark contrast to the acrimonious tones that have marked the barbed exchanges between Akel and Disy over the past week.
The two had squabbled bitterly after Disy demanded clarifications from the government on Akel’s warnings that Cyprus was not ready for the euro.
Finance Minister Michalis Sarris and Central Bank governor Christodoulos Christodoulou, who had canvassed hard for a yes vote, were there to see the bills pass.
Akel’s objections were forcefully put by MP Stavros Evagorou who urged more time to bolster economic stability before the big jump.

Grace period

And party parliamentary spokesman Nicos Katsourides insisted that Akel did not oppose EMU, but wanted a grace period to soften the blow for ordinary people.
Disy’s deputy leader Averoff Neophytou said the euro meant benefits for the economy and the country as a whole.
But at the same time, he appealed to the business community not to exploit the changeover by rounding up prices upwards.
Disy MP Maria Kyriakou urged “everybody to vote for the bills so as to ease our euro entry course.”

Problems

Edek’s Yiannakis Omirou said it would have been better if all parties unanimously backed Cyprus’s target for eurozone entry in January, 2008.
He acknowledged that there would be problems during the transition, but said everybody had to pull together to deal with them.
“There will be more social benefits once we join the EMU than if we distance ourselves from it,” said Omirou.
Diko MP Nicholas Papadopoulos acknowledged that the bills could not go through without Disy’s support.
“Had it not been for Akel’s support for the government’s economic policy over the past four years, parliament would not be in a position to make a choice on the euro,” he added.
Every country that had adopted the euro had benefited, with the economy expected to expand even further after eurozone entry, Papadopoulos argued.
European Party vice president Nicos Koutsou said that even though the vote was not unanimous, all had to work together to protect consumers from unscrupulous profiteering.
Green MP George Perdikis also welcomed the euro, but said it was essential to thoroughly prepare.