“They think Cyprus is implementing a plan, which will create the prospects to exit the crisis and most important, that the Cypriot economy has prospects,” the Minister said.
He warned however, that investors looked to the mid and long term “and we should not think that billions will flow in from one day to the next and that our problems will be solved in the same way.”
The government, he said, was making moves that may look isolated but they had their importance. “Like, for example, the clear political pledge that the tax regime will not be disturbed again,” Georgiades said.
Cyprus was forced to raise taxes as part of the terms of its bailout, including its much-coveted corporation tax, which rose to 12.5% from 10%.
“Moves that must be made are being made but do not expect premature announcements from this government,” the Minister said.
Last week the government announced its intention to reintroduce a savings bond programme for retail investors every month starting in June. The six-year bonds will bear a 5.75% coupon until maturity but can be redeemable with a lower interest rate starting at 2.75% two years after acquisition.
The minimum subscription for the issue is €1,000, the Finance Ministry said. It was a small step in the effort to return to international markets, Georgiades said.
In an interview with Reuters earlier in April 2014, President Nicos Anastasiades said the government hoped to return to the markets at the end of next year. “It is a very short period of time compared to countries under similar (bailout) programmes,” he added.
Last year, Cyprus teetered on the brink of default from a banking system crippled by its exposure to Greece and a cash-starved government deprived of access to international markets.
It became the first nation in the history of the eurozone to impose capital controls to prevent a collapse of its banking system. The island lost its foothold in markets in May 2011 after yields on benchmark 10-year bonds spiked rapidly. But from a high of close to 15% last March yields have now tumbled, hovering at around 5.0%.
Source: Cyprus Mail
