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WORLD BANK: Cyprus settlement would boost economy

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A settlement of the Cyprus problem would boost economic activity and remove instability, which blocks investments, officials from the European Commission and the World Bank told the Economist Summit.

“As every economist knows, instability is the enemy of the economy as it hampers investments.

“As long as Cyprus remains divided, it will remain inherently unstable,” Mario Nava, head of the European Commission DG for Reforms, said in a video message.

He added: “This is one of the main reasons why the EU remains fully committed to the reunification of Cyprus”.

The Commission is implementing the EU aid programme for the Turkish Cypriot community worth more than €30 million annually.

He also highlighted the EU Green Line regulation governing trade across the divide, recalling that in 2022, the volume of trade across the divide amounted to almost €50 mln, the best result ever achieved.

“But this result could still be improved many times over.”

Nava said the Commission has opened a one-stop in Nicosia where interested traders from both communities can receive information about the procedures for Green Line trading.

He also highlighted the designation of Cypriot white cheese, Halloumi, which received a PDO designation, benefiting both sides of Cyprus.

Goran Tinjic, Programme manager for Southern Europe at the World Bank, said economic integration matters, as it alleviates poverty and boosts productivity.

He said that the €50 mln in trade volume between the two communities is “a drop in the ocean” compared with the potential capabilities of economic integration.

Last year, the World Bank assessed 200 products and services produced by Greek Cypriot firms from which Turkish Cypriots could benefit.

Similarly, there are products and services available from Turkish Cypriot firms.

“There is a huge benefit of economic integration”, he added, noting the scarcity of trust “hurts economic growth.”

Tinjic urged the need for free movement of capital across the island, people, and commercial vehicles, stating the World Bank is carrying out a study to assess the impediments to free movement of vehicles.