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Cyprus on a path to recovery, President says

09 May, 2014

Cyprus one year after the collapse of its banking sector is well underway on a path to full recovery, President of the Republic Nicos Anastasiades has said Thursday.

“Today, a year on since the Troika Agreement, I am pleased to tell you that, the Cyprus Economy is well underway on a path to full recovery,” Anastasiades has said addressing a working lunch hosted by Cyprus Shipping Chamber for German shipowners.

One year after the financial meltdown and a €10 billion financial assistance by the EU and IMF that featured a haircut on unsecured banking deposits, Cyprus has averted bleak projections by its international lenders for a contraction of 8.7% of its GDP, owing to the resilience of sectors such as tourism services and shipping.

“In making these quite positive achievements in such a short period of time, the Shipping Industry in Cyprus played an important and invaluable part,” he said, adding that “the shipping operational and taxation infrastructure in Cyprus and the Cyprus flag, remain intact, fully operational and very competitive.”

Noting that shipping represents 7% of the Cyprus GDP, Anastasiades underscored that “the Cyprus Government acknowledges now, more than ever, the important role that the Shipping sector plays in the Cyprus economy.”

“For these precise reasons, our Government is determined to introduce those mechanisms necessary to protect this important sector, as well as to develop and enhance it much further,” he added.

Furthermore, the President referred to the embargo imposed on ships under Cypriot flag in 1987 in Turkey which invaded the island in 1974 and has been occupying 37% of its territory ever since.

“As you are aware, Cyprus constitutes a fully EU approved “Open Registry”, 85% of which, belongs to Northern European beneficial interests. This trade restriction therefore, adversely affects European interests themselves,” he said, adding “our strong commitment is to seek a solution in line with the relevant EU laws and regulations, by exerting maximum pressure on Turkey in this direction, which in turn will lead to growth prospects for EU Shipping in general.”

Recalling that a new round of talks began in a bid to bring about a settlement to the Cyprus problem, the President noted that “whilst the efforts towards the lifting of this illegal ban will continue and be further intensified at EU level, similar parallel efforts will also continue, separately as a tangible “Confidence Building Measure” during the on-going political negotiations.”

Moreover, the President recalled the recent natural gas discoveries in Cyprus` Exclusive Economic Zone, noting that these “create new prospects for our country and our national economy. These new developments widen also the horizons of our Shipping Industry, creating relevant synergies.”

“The discovery of hydrocarbons offers an opportunity for the development of a whole new sector within the Shipping Industry in Cyprus, to meet the needs of these new offshore activities,” he went on to say.

On its part, Mayor of Hamburg Olaf Scholz said Cyprus having shipping as one of its key sectors of its economy will return to the international capital markets and lift all trade restrictions imposed since the bailout in March 2013.

Andreas Broadtman, one of Berenberg bank`s managing partners, said the bank expects that the Cypriot economy will return to growth as early as 2014 or by 2015 at the latest and praised Cyprus as one of the “the most important global hubs for shipping companies.”

On his part Captain Eugen Adami, President of the Cyprus Shipping Chamber referred to the evolution of Cyprus as a shipping hub with German shipowners opting the port-city Limassol as their base.