Christodoulides was giving a speech on ‘Cyprus and the Eurocrisis: Novelty and Lessons Learnt’ at the College of Europe Conference ‘Money and Democracy: The Euro Dilemma’.

“Notwithstanding theleaps of progress achieved by Cyprus, challenges remain, such as high unemployment and non-performing loans. As Cyprus decisively continues to reform and restructure, we are confident that we will overcome the remaining challenges”, he said.

He added that the completion of the bailout programme is not the end of the road for Cyprus but signifies “the continuation of our plans, with a strong emphasis on structural reforms”.

In the past three years, said Christodoulides, Cyprus has proven that it has learned from past mistakes, that its economy and its people are resilient, that it has the commitment and the capability to build and sustain a stable economy and to be a credible member of the EU and the euro-zone.

The results of this effort, he added, have undoubtedly been a product of close cooperation among the Government, political parties, social partners and above all the Cypriot people and in this regard, this collective effort will continue.

The Spokesman said that Cyprus, as well as all other countries affected by the crisis, paid the price of an incomplete economic and monetary union, lacking a strong economic governance framework - with strict fiscal rules - as well as a banking union.

Referring to the situation in March 2013, he said that President Anastasiades, with an economic Armageddon in sight, with the second largest systemic bank already at the point of no return, and with EU solidarity mostly nowhere in sight, was forced to accept an unprecedented and questionable Eurogroup decision, which included a severe haircut of bank deposits.

“I would not call it a “dilemma” as much as I would call it a most un-European political and financial act of blackmail, with no room for negotiation: you either accept the totality of what is proposed or we will make sure the banks collapse, with a risk of exiting the euro in sight. This to a newly elected, pro-European, pro-integration leader of the EU’s only divided, and under military occupation country”, he noted.

Explaining how Cyprus managed to overcome the crisis, he said the Government took ownership of the bailout programme, persistently conveying the message to its citizens that this was not a programme imposed on us but rather a programme owned by Cyprus for the benefit of the country and its people. As he explained that was perhaps a key point of difference between Cyprus and other countries under troika-administered programmes.

“In March 2013 no one – neither in Cyprus nor internationally – could have predicted that three years later the Cypriot economy would register growth, that Cyprus would not need to make use of the full amount of the bailout funds, and that that there would be no request by Cyprus for a new programme. Though the path was not easy, that is exactly what Cyprus went on to do. And Cyprus gave the EU a positive achievement story”, said Christodoulides.

Key to this success, he added, was the fact that Cyprus managed to successfully turn the crisis into an opportunity, and, through robust reform, bank restructuring and fiscal consolidation, to effectively address and correct long-term weaknesses, and to re-build a strong economy anchored on solid foundations.

The Spokesman also referred to the wider crisis of the European project, saying that the Cypriot case microcosmically embodied the wider EU crisis – a crisis that significantly damaged the EU integration process and the relationship among EU member states and was also manipulated by populists to attack the EU, and bring to the surface a dangerous political debate about the possibility of the EU’s disintegration.

The crisis also revealed, as he said, the flaws of the Euro-system: a mainly political experiment that provides a monetary union without a complete political union, or at least an effective mechanism for fiscal consolidation.

“The EU was lacking effective monetary supervision from the European Central Bank, with significant structural reforms nowhere in sight. It was these systemic weaknesses that allowed, or even encouraged many Euro-member countries to build excessive fiscal deficits and external indebtedness; the end result was excessive risk taken by the banking sector, and it nearly caused total collapse in Cyprus. It is clear that the prosperity of our citizens is at risk if the right framework is not put into place”.

As he also said “while we are very much encouraged by the fact that significant action has been taken at EU level in order to address these systemic weaknesses, with new institutions being built and new common rules agreed, there are still some important steps to be taken in achieving a true Economic and Monetary Union”.

Cyprus, and other member states, he added, have paid a heavy price not only as a result of its own misguided policies, but also as a result of the weaknesses of the economic governance and supervision of the Eurozone and the EU.

“This is why Cyprus has actively supported and will continue to support reforms at the level of the Union. I am convinced that Europe learned its lesson and that it will succeed in evolving, as it did many times in the past. This is why the European project serves as a guide for all, especially Cypriots”, he said.

Finally he said he is adamant that the answer to the challenges that the EU is facing – including the current unprecedented migration crisis - always has to be not less, but more Europe.

Source: Famagusta Gazette