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Minister of Finance Charilaos Stavrakis briefed the House of Representatives Finance Committee on the international financial crisis, noting that Cyprus' banking system was the most stable in Europe, giving it a significant advantage to tackle possible consequences.
He said the robustness of the banking sector in Cyprus and the contingency plan to salvage any banking institution that may be at risk in the future meant that no customer of Cypriot banks would be losing any money.
Stavrakis noted that Cyprus is at an advantage because there have been no investments in ''toxic products,'' the banks depend on household and small and medium enterprise deposits, they do not seek loans from other banks to cover their needs, there is capital adequacy, and profitability is high.
He pointed out that recent EU decisions provide the Cypriot government with the capacity to guarantee deposits and intervene in order to support any banking institution in trouble.
The Minister of Finance pointed out that Cyprus' economy is mainly based on tourism, trade, foreign investment and services, noting that if the crisis continues, Cyprus may be affected but will be able to tackle the situation and at the same time maintain its growth rate, which is almost double that of the EU, combining its social features with the sought after growth rate.
Referring to measures adopted by the EU, Stavrakis said they are of ''theoretical significance'' for Cyprus, since the baking sector is strong.
Stavrakis said Cyprus' growth rate is expected to drop from the projected 3.7% to 3% in the year 2009, and that inflation during 2009 will drop from the projected 3% to 2% or 2.5%.
Regarding the development projects announced through the state budget for 2009, Stavrakis said they will maintain the high growth rates, adding that the budget provides for thirty large projects that will cost over a million euros each.
He furthermore noted that there has been a spectacular drop in the public debt from 60% of the GDP to 49%, giving the state the capacity to use two billion euros to boost the economy, if necessary.
Minister of Commerce, Industry and Tourism Antonis Paschalides presented to the House of Representatives Finance Committee specific proposals and programmes being prepared to tackle the consequences from the international financial crisis on Cyprus' tourism and especially the drop in bookings from the United Kingdom.
Briefing the Committee, Paschalides said the banking sector remains robust and unaffected and that the drop in tourist bookings from the United Kingdom can be balanced by tourists from Russia and other countries.
He noted that a special programme is being prepared to boost the tourist flow from the UK, and other measures to attract more tourists from Russia and Scandinavian and central Europe countries.
Paschalides said other measures were also being examined in cooperation with the Ministry of Communications and Works, in the framework of the Open Skies programme.
He also said the sectors of industry and commerce have not been affected by the international financial crisis.
