Cyprioteconomy copes well with financial crisis,says Finance Minister

The Cypriot economy copes relatively well with the current financial crisis and the economic recession, despite an unavoidable deceleration in its rate of growth, resulting from the particularly adverse external environment, Minister of Finance Charilaos Stavrakis has said here Thursday.

Speaking during a dinner hosted to the participants of the informal Economic and Financial Committee meeting (EFC), Stavrakis said that ''our financial sector remains sound, with a strong liquidity position and a comfortable capital adequacy as well as sufficient profitability''.

''The Cypriot economy is growing at a rate of growth, which we expect to be of 1% for 2009, under conditions of near full employment and price stability'', he noted.

He added that the public finances will inevitably show deterioration this year, being negatively affected by the slowdown of the economy, as well as the changed composition of growth.

''A deficit of around 2-2.5% is expected. In this respect, I want to stress that our fiscal policy will remain prudent. Indicative, I believe of the sound fundamentals of the Cypriot economy, has been the response of European investors to our Euro bond issue yesterday. The issue was oversubscribed by over 450%, at a relatively favourable cost'', he said.

He acknowledged with satisfaction, that there was an adequate and co-ordinated response to the crisis at the EU level via the implementation of the European Economic Recovery Plan.

Stavrakis said that undoubtedly Cyprus has benefited most from its accession to the EU, inter alia, via the implementation of long standing structural reforms, whereas the phase of preparation and eventual accession to the Eurozone, as from 1.1.2008, has protected the Cypriot economy from the severe implications of the current financial crisis.

He also pointed out that ''we have recently started the preparations for the assumption of the EU presidency in the second half of 2012 and we will do our utmost for an effective and constructive cooperation with the EU institutions so as to have a successful presidency''.