Cypriot Finance Minister Michalis Sarris said Friday that public deficit can be reduced down to 2 percent of the country's Gross Domestic Product (GDP) in 2006 to meet conditions of joining the euros.

Speaking to a press conference, Sarris noted that a steady increase of revenues and prioritization of public expenditures could reduce the deficit further below 0.5 percent of the GDP by 2009.

"2006 will be crucial for Cyprus because the European Union will assess Cyprus' readiness to join the euro zone" Sarris said.

Cyprus, which expects to join the euros by Jan. 1 2008, has adopted a series of measures to reduce the public deficit, including a public service recruitment and wage freeze, limits to any increase on semi-government budgets, improved tax collection, levies on real estate, ports, airports and mobile telephony, and deep cuts in defense spending.

Cyprus entered the EU's Exchange Rate Mechanism (ERM II) in April, 2005, almost a year after it joined the EU.

The island must wait for two years before entering the euro zone.

It had wished to join the euro zone by 2007, but was hindered by a huge deficit.

Sarris said that the country will have an 8 to 10 percent annual increase of revenues, which is also a helpful factor to its goal of entering euros.

"Today's figures show a robust economy with satisfying growth rate and almost total employment, low inflation and interest rates as well as an impressive public deficit reduce, due to fiscal discipline and the Cypriot diligence and enterprise," the minister said.

Source: Xinhua