Economic activity, especially in small and medium size enterprises in Cyprus, needs to be re-launched, European Parliament President Martin Schultz said on Monday.
As a means to do that he proposed a European Investment Bank credit programme targeted to small and medium size enterprises, an idea he will put forward on his return to Brussels.
In statements he made after a meeting he had with President of the Republic Nicos Anastasiades, Schultz, who is visiting Cyprus for an EU parliamentary event, said that their meeting was “a serious meeting”. It is, he noted, “a serious situation”.
He went on to say that he “agreed with the President that he should try and do as soon as possible the utmost for the revitalization of the economy and the country”, adding that short term measures are needed.
“I will try to discuss in Brussels with the European Investment Bank – taking into account that the overwhelming majority of enterprises here in the country are small and medium enterprises – to find a way for a credit programme to overcome the credit crunch for most of these enterprises”, he said.
He couldn’t promise that the programme would in fact happen but he pointed out that “we must have fantasy to find measures giving hope to people in the country”.
“I just walked in Makarios road and the biggest problem is that people have no trust in their own future”, he noted, adding that what people must be told is that “this is a difficult situation but there are solutions”.
“It is our duty as Europeans”, he stressed.
Earlier on, during his walk in Makarios avenue, one of the capital’s central spots, Schultz had said he was worried by the lack of activity he saw.
During the day, he said, he had had meetings with representatives from Cyprus’ Universities, the Chamber of Commerce, Trade Unions, research companies and banks.
“We all agreed that the urgent measure is the re-launch of economic activity”, he pointed out, adding that “we can debate about the restructuring of the banking system and about long term projects but in the short term people need hope and activity”.
Following a Eurogroup decision on March 25 and an agreement concluded between the Cypriot authorities and the Troika (European Commission, ECB, IFM), a bailout deal for Nicosia foresees – among other provisions – losses on Bank of Cyprus’ uninsured depositors (over 100,000 euros).
Excluded from international markets, Cyprus applied in June 2012 for financial assistance, after its two largest banks sought state aid, following massive write downs of their Greek bond holdings amounting to €4.5 billion or 25% of the island`s GDP, as a result of the Greek sovereign debt haircut.
