Address by President of the Republic, Mr Nicos Anastasiades,
at
CIBA 2015 Annual General Meeting
It is a great pleasure for me to be
present here today, in order to address the 2015 Annual General Meeting of the
Cyprus International Business Association (CIBA).
International business plays a key role
in rebuilding economic recovery, especially at this juncture. The Association’s
members have a significant contribution to the country’s economic stability and
growth, through direct job creation and also through activities established to
meet the sector’s needs. Your presence in Cyprus, during difficult times, acts
as the best token of your trust in the country’s potential and showcases Cyprus
abroad as a trustworthy and attractive business centre.
The Cyprus economic model still relies
largely on the services sector. Cyprus remains a Business Services Centre with
strong regulation and supervision, with a well-balanced portfolio of high
quality services provided by high-calibre professionals such as accountants,
lawyers, tax experts and others. International business activity in Cyprus
continues to create jobs and contributes to about 10% of GDP through the exports
of services.
Even after the financial turmoil in
2013, the business services sector exhibited considerable resilience against
fears of a collapse and contributed significantly to the stabilization of the
economy. Most importantly, future predictions for this sector look promising.
This is evidenced by the gradual restoration of confidence towards Cyprus,
stemming both from our country’s comparative advantages –which have been further
enhanced and developed- and also from the rigorous implementation of an
ambitious economic adjustment programme.
Dear
friends,
The Cypriot economy is emerging out
of its most challenging period since 1960. After almost four years of
contraction, the economy is registering positive economic growth from the
beginning of this year, a growth stronger than anyone expected. Our
journey along the road to recovery has been faster than anyone could have
predicted two and a half years ago.
With a restructured and fully recapitalized banking sector –mainly
through important international investors-, fiscal imbalances permanently
addressed, and with a program of radical structural reforms, Cyprus has returned
to the international markets much earlier than any other country under an
economic adjustment programme. Last month, Cyprus managed to issue a new 10-year bond at a
satisfactory yield, following successive upgrades of its sovereign rating by rating agencies. At the same time, however, we
are proceeding to the next step of supporting growth and creating jobs. Thus, we
are exploring all possible avenues for promoting and supporting new
ventures.
It is worth noting that
opportunities for growth exist in the majority of economic sectors of Cyprus.
However, especially today, the discovery of natural gas reserves within Cyprus’
Exclusive Economic Zone (EEZ) creates excellent investment prospects in the
energy sector and ancillary services. The emerging oil and gas industry to be
established on the island is expected to provide a significant boost to our
economy, creating significant growth.
Ladies and
Gentlemen,
Many reforms have either been concluded or are at an advanced stage
of implementation. Other critical growth-enhancing reforms have already been
initiated, including an ambitious privatization program. At the same time, we
are also working on improving of the business environment. Through the introduction of decisive and
effective structural changes and the significant reductions achieved in costs
and operating expenses, have added to the competitiveness and efficiency of
Cyprus, as an
attractive investment destination.
The Government is currently implementing a series of
measures, which include the simplification of procedures for the faster issuing
of permits and licensing of investment projects and operation of businesses. In
this framework, the Ministry of Energy, Commerce, Industry and Tourism is
proceeding with the upgrading of the existing One Stop Shop. The centre will be
business-friendly and aims at promoting business and investments. The new One
Stop Sop will facilitate all potential and existing entrepreneurs, who will be
able to count on one single point of contact to receive comprehensive
information on licenses, administrative procedures, finance and public support.
The business and investment service centre will begin its operations in Nicosia
in June 2016.
Additionally, we are very pleased to have reliable
partners, such as the European Investment Bank (EIB) and the European Bank for
Reconstruction and Development (EBRD) providing financial support for valuable
operations in our economy.
In 2014, the Government initiated the process to change
its status at the EBRD from a shareholder country into a country of
operation. Today, after almost one year of EBRD operations in Cyprus, we do feel
that the timing could hardly have been more appropriate, as it gave a very
positive signal of confidence and trust to the banking system and towards
improving the conditions for financial stability, at a time needed most. EBRD
with its experience and expertise, and with a wide range of financial
instruments, has a unique role to play in Cyprus and will significantly
contribute to the reform and recovery of our economy.
In 2015, the joint effort
between the European Investment Bank and the Ministry of Finance was focused on
providing support for small and medium-sized enterprises (SMEs), which are the
backbone of the economy. The financing of SMEs is of strategic importance to
Cyprus, particularly at this juncture. The EIB and the Ministry of Finance have
designed custom-made financial instruments, duly taking into account the local
market conditions and needs. One of these is the provision of Government
Guarantees, which enable EIB funding to local banks for SME financing.
The favourable financial terms from EIB and its
increased long-term lending capacity contribute to lower borrowing costs and
improved financial terms for final beneficiaries. This strengthens the lending
capacity of the Cypriot banks, thus stimulating investment activity in
Cyprus. Currently, seven local banks have benefited from the scheme. By now more
than 45% of the amounts signed by the EIB in 2014, concerning various projects,
have been allocated with significant benefits for the local SMEs (increased
liquidity, important reduction of interest rates and options for longer
maturities). The Council of Ministers has decided last month to increase the
Scheme from €300 mln to €500 mln so that more Cypriot Banks can benefit. New
loans are expected to be approved by the EIB Board before the end of this
year.
Ladies and
Gentlemen,
Before concluding, I would like to take advantage of
this opportunity to thank you for trusting Cyprus in developing your business
operations. As I have recently said at the Economist Conference, we had to take
some difficult and unpopular decisions. But, owing to the hard work of our
people and the responsibility exhibited by the political parties, I can now say
with certainty that Cyprus is entering a new era: an era of growth and
prosperity.
This is our ultimate goal. In order to achieve it we
have to do our best in preserving Cyprus as an excellent place to live, a place to do business, to invest and above
all, to prosper.
______________
Note: The speech,
on behalf of the President of the Republic, was delivered by the Minister of
Transport, Communications and Works Mr Marios Demetriades.
