European Commission President Jose Manuel Barroso has welcomed Cyprus to the Εuro area of 15 European Union countries, stretching from the Mediterranean to the Artic Circle.
In a written statement on the occasion of the adoption of the euro by Cyprus as from 1st January 2008, Barroso said the arrival of the Euro, marks a new chapter of Cypriot history.
”This momentous step will bring Cyprus to the very heart of the European Union. It means that Cyprus has joined a world class currency and a powerful economic area of nearly 320 million citizens, with an almost 15% share of world GDP,” he said.
For Cyprus, the Commission President noted, the economic benefits of the Euro will be substantial. The solid credibility brought by the Euro should give a healthy boost to Foreign Direct Investment while the disappearance of exchange rate risks and transaction costs will make Cyprus a more attractive trading partner and be very beneficial for business. For Cyprus, this represents a significant advantage as more than half of Cypriot trade in goods is with Euro area members. Trade in services with the Euro area accounts for around 30% of the total.
Like all other EU Member States, Barroso added, Cyprus is at the moment facing rising prices for energy and some other commodities.
”However, in the longer term Cyprus’s adoption of the Euro will, as well as helping create growth and jobs, ensure that low inflation can be preserved and anchored in a sustainable manner. This will, of course, also require the right economic policies, including a sound budgetary policy and the promotion of open competitive markets.”
The Commission President pointed out that joining the Euro area also offers significant political benefits. ”It will give Cyprus a greater say in international financial institutions and fora and greater sway within the European Union. Cyprus will also gain membership of the Eurogroup at a time when the Euro area finance ministers group is exerting a growing influence over the direction of EU economic policy.”
He said these are not the only benefits that Cyprus can look forward to. Cypriots can now travel more easily within the Euro area without the hassle of changing currencies and paying fees every time they cross a border, and are better able to compare prices since they can use their own currency anywhere in the Euro area. Traveling outside the Euro area is also easier since the Euro is an international currency and therefore widely accepted in many places outside the Euro area, particularly in tourist destinations.
”The Euro is a symbol of our common identity, shared values and the success of European integration in bringing the peoples and nations of Europe together. It acts as a stimulus to further integration by showing that common action by Member States can bring widespread benefits to all those who take part. The whole of Europe is pleased that Cyprus is now firmly part of all of this too,” Barroso added.
On the occasion of the New Year, the European Commission President reiterated his wish for a speedy solution to the Cyprus problem that would allow the whole of Cyprus and all of its people to fully enjoy the benefits of membership of the EU and of the Euro area.
”The European Commission will continue to do everything humanly possible to help move forward on this question, which I know concerns everyone in Cyprus,” Barroso concluded.
Cyprus, which joined the European Union in 2004, has been divided since 1974 when Tukish troops invaded and occupied 37 per cent of its territory.
