Limassol, December 2012 - The Cyprus House of Representatives has approved a second set of austerity measures, aiming at further fiscal consolidation.

The second package of austerity measures follows a first package, passed in August 2011. The series of measures aim at enabling Cyprus to meet its medium term commitments to the EU and particularly for a budget deficit of 2.8 GDP in 2012 and a zero deficit by 2014.

Amongst the various new tax and legislative measures included in the latest package is a two-point hike in Value Added Tax (VAT) from 15% to 17% with effect from 1 March 2012. The higher VAT is expected to generate a total of €160 million.

The measures also include a two-year freeze of salaries in the public sector and an extraordinary contribution of private sector employees based on the scales and rates which apply to civil servants, also for two years.

Furthermore, the House of Representatives also approved particular bills for the banks, aiming at their further support and consolidation.

For more information on the second package of austerity measures, please click here.