The President of the
Republic, Mr Nicos Anastasiades, met today with the Lord Mayor of the City of
London, Mrs Fiona Woolf.
During their working
breakfast, the President who was accompanied by the Cyprus delegation, said: “I
am delighted for this meeting which constitutes a perfect opportunity for
discussing ways of boosting the already sound cooperation of the financial
sector of Cyprus with the City. Cyprus has indeed been facing a very serious
economic challenge that is coupled with the situation created by last March’s
bail in. You are certainly aware that my government’s priority is to address
this challenge as thoroughly, as effectively and as promptly as possible.
As I have repeatedly
stated my Government is fully committed and determined to strictly implement
the Troika Memorandum of Understanding. In this regard, the economic policy of
the Government is based on three pillars, namely measures to ensure the return
of stability in the banking sector, implementation of fiscal consolidation
measures and lastly structural measures, with emphasis on the restructuring of
the public sector.
To this end the swift
assistance and sharing of best practices provided by the UK in the banking
system and in restructuring the public sector has proven indispensible and is
much appreciated. We look forward to furthering cooperation with British
competent authorities with the aim of increasing productivity and kick-starting
competitiveness of the economy.
There is no denying that
economic conditions will continue to be difficult in the foreseeable future,
but already it appears that all the hard work has started to pay off.
From the evidence so
far, it appears that economic recession in 2013 will be found to be less severe
compared to the expectations of rating agencies and other organisations. Fiscal
indicators are also better than expected. However, the Government is fully
aware of the existence of significant risks ahead. 2014 is also expected to be
a difficult year but in 2015 we expect the Cyprus economy to start growing,
although with only moderate rates.
At the same time, the
IMF underlined that Cyprus’ reform programme is on track, while the European
Commission noted that the Cyprus Government is doing what it should in terms of
cutting public spending.
Additionally, the Cyprus
economy received its first upgrade in November 2013 by Standard & Poor’s
after three years of successive downgrades, whereas the forecast for a quick
recovery and return to growth as early as 2015 is supported by Troika’s own
predictions.
Crucially, trust is
returning to the banking system, as becomes evident by the slowdown of overall
deposit outflows and the recorded increases in deposits by EU residents in
September, as well as by third countries during October.
Moreover, the capital
controls imposed after the decisions by the Eurogroup are gradually being
lifted and a roadmap has been drafted for their full abolition, based on
specific milestones, such as the full recapitalisation of the cooperative banks
and the progress in the implementation of the restructuring plan of Bank
of Cyprus.
At the heart of the
Government's strategy for economic recovery is the pursuance of Foreign Direct
Investment and to this end all steps are being taken to ensure that a more
effective and business-friendly environment is facilitated. A thousand new
companies were actually registered in Cyprus in November, reinforcing the
expectations of stakeholders in the international services sector that the
situation is improving.
This fact came as no
surprise to people in the industry, since the country retains its many
competitive advantages. With almost 50 double tax treaties in effect, a highly
qualified and professional workforce – the majority of which received their
education and training in the UK – a fully EU harmonized tax and legal system
and one of the lowest and most competitive corporate tax rates in Europe at
12.5%, Cyprus remains a great investment destination and a highly competitive
centre for international businesses.
At the same time, the
discovery of natural gas reserves within Cyprus’ Exclusive Economic Zone
creates tremendous prospects for investments and cooperation in the energy
sector and auxiliary services and has created a new impetus in encouraging
opportunities for co-operation between Cypriot and foreign businesses.
Promising opportunities
for growth also exist across many other sectors: Shipping – a sector in which
Cyprus enjoys a great tradition and has the eleventh largest merchant fleet
worldwide and the third largest fleet in the European Union – tourism, large-scale development projects,
education, health, research and of course renewable energy.
This is the reason why
we have initiated a campaign to attract investments from abroad via promoting,
inter alia, a number of mature projects that foreign investors may embark on
promising rate of return.
Having said this I wish
to assure you of my government’s commitment to facilitate the successful
conclusion of closer cooperation ventures with the City and of our willingness
to practically work towards this aim.”
On her part, the Lord
Mayor warmly welcomed the President of the Republic and said that during their
meeting they will have the opportunity to assess with the President ways to
enhance cooperation in the fields of maritime services, banking, energy and
public sector reform.
She added that the
energy issue is quite a hot topic everywhere, pointing out that it is really
all about growth, the creation of jobs and prosperity and that Britain has the
services to assist.
I am really delighted
about your discussions with the Prime Minister and your shared vision for
advancing growth in Europe, she said.
Moreover, the President
signed the Book of Visitors of Mansion House (Mayor's Office) in which he
wrote: "I wish to thank the Lord Mayor for her hospitality and her kind
invitation to visit the Mansion House, the heart of one of the most important
financial centres in the world. I hope today's meeting will give a further
boost to the enhancement of cooperation between the City of London and Cyprus,
as an investment destination."
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