Solution will boost economic development
President Nicos Anastasiades said in Chicago that relations with the United States are of a strategic importance and “we have a vision to transform Cyprus and to unlock its full potential, for the benefit of its people.”
Speaking at the Chicago Council on Global Affairs before departing for New York to address the UN General Assembly, he added that a solution to the Cyprus problem will act as a catalyst for the economic development for the decades to come and with huge potential benefits for many sectors of the economy including energy, shipping, tourism and transport.
The President said when he took office he and his economic team were well aware that the economy was running into trouble as the financial sector had run an unsustainable credit boom for more than a decade, which fuelled a property and consumption boom. He said the impact of the decision to impose a haircut on Greek sovereign debt left the Cyprus banks on the brink of collapse while there was a severe fiscal crisis and the public coffers were literally on the brink of exhaustion. In efforts to avoid an economic collapse, “we agreed on a programme of economic reform and fiscal consolidation”.
“To avoid the upcoming Armageddon and considering that the second largest systemic bank had already reached the point of no return, we had to adhere to an unprecedented and still questionable Eurogroup decision, which included a severe haircut of bank deposits”, the President remarked.
Anastasiades said his government had to make this programme work. “Just two and a half years later, I stand before you and state with confidence that we expect a smooth and successful completion of the programme within the next few months”.
Most importantly, I can proudly present Cyprus as a success story of economic reform, said Anastasiades, noting that “we are emerging stronger from the crisis and we can be very optimistic for the future”.
Cyprus, he said, “has officially exited recession, and is registering growth as of this year. A much stronger growth than anyone had expected. We are on the road towards full recovery”, with a “restructured and fully recapitalised banking sector and with a strong presence of major US investors like Wilbur Ross and Third Point”, the fiscal imbalances fully addressed and Cyprus returning to the international markets much earlier than any other programme country.
Changes include a pension reform, a bold welfare reform, a public administration reform including a revision of the wage-bill, labour market reforms, and a tax administration reform. Critical growth will also come from an ambitious privatisations programme, a digital strategy and a judicial reform “to transform our bureaucracy from a red-tape to a red Anastasiades added.
Regarding the Cyprus problem, he said a settlement will reunite the country, its people, the economy, and will establish good relations with Turkey and will comprise all the parameters conducive to economic development, business and investment; regional stability, and open markets.
“This is what we are currently negotiating with our Turkish Cypriot compatriots”, he said, “to reach an agreement on evolving the Cyprus Republic to a carefully designed Federal structure that will work for Cyprus”, while the EU is now becoming a more active player.
“The solution will act as a catalyst for the economic development for the decades to come. With huge potential benefits for many sectors of the economy; Energy, Shipping, tourism, or transport are just the most obvious”.