NICOSIA, March 21 (Xinhua) -- A European Commission document warning Cyprus of its economy being in danger of overheating and deviating from from medium-term budgetary objectives has been withdrawn, Finance Minister Harris Georgiades said on Tuesday.
Georgiades told the state television that he told a Eurogroup meeting on Monday in Brussels that the Commission's views about signs of overheating of the economy was a mistaken projection that was based on a wrong methodology.
"The Eurogroup accepted my argument and withdrew its deviation warning and recommendations about the need for corrective measures, such as raising or imposing new taxes," Georgiades said.
"The Eurogroup has initiated the process to change the methodology that led to the assumption that Cyprus's structural balance will turn into a deficit of 1.9 per cent of GDP," he added.
The Cypriot Finance Ministry maintains that the structural deficit will reach only 1.0 per cent of GDP.
Cyprus was pulled back from bankruptcy in a 10-billion-euro bailout in 2013 and returned to economic growth at the endo of 2015, after 12 consecutive quarters of deep depression.
"Applying the European Commission's recommendations would result in stifling growth," said Georgiades.
He added that he made it clear to the Eurogroup meeting that Cyprus "will safeguard the main approach of its policy which is focused on strengthening and guarding growth and concurrently maintaining a balanced budget".