Mr. Dervis's plan replaces a three-year program that started in January 2000 with support from the IMF and World Bank. The latest program will renew the fight against chronic inflation with a floating exchange rate, Mr. Dervis said. His plan promises to sort out the indebted state banking sector, reform private banks and bring transparency to state financing. New laws will liberalize markets for sugar, tobacco, natural gas, airline tickets and fixed-line telecommunications. But only three of the 15 laws Mr. Dervis had previously said needed to be passed by mid-April have so far been approved by Parliament, and none is yet law.
Doubts remain about whether the coalition government has the willpower to change.
A day before Mr. Dervis announced the money-saving measures, a senior minister used an official jet to attend a short ceremony in his electoral district. Opinion polls meanwhile show public support for all political parties at rock bottom. Protest marches nearly every day in several cities call for the resignation of Prime Minister Bulent Ecevit, who is 75 years old and looks increasingly frail. But there is no obvious alternative to the current government, whose reform efforts also have the support of the powerful armed forces. Second, was the Greek Cypriot Administration's EU membership application.