European Central Bank council member Panicos Demetriades said Cyprus’s decision to seek a European rescue will help it return to economic growth.
“The rescue mechanism will help Cyprus in a substantial way to overcome today’s problems and return as early as possible to the path of sustainable growth,” Demetriades, who is also governor of the Central Bank of Cyprus, said in a speech in Limassol today, according to an e-mailed copy of the text.
Cyprus’s economy, the euro area’s third smallest, may shrink as much as 1.1 percent this year and grow 0.4 percent in 2013, the Central Bank of Cyprus said on June 7.
“We should mainly aim at increasing productivity through structural reforms and containing the rate of wage increases, not necessarily at substantial pay cuts damaging overall demand,” Demetriades said.
To contact the reporters on this story: Stelios Orphanides in Nicosia at email@example.com;
To contact the editor responsible for this story: Craig Stirling at firstname.lastname@example.org