articles | 05 August 2013

‘We’ll turn the crisis into an opportunity’

President Nicos Anastasiades has expressed his conviction that Cyprus would pull through and overcome its problems, saying the fruits of today’s labour would be properly felt by 2015.

Speaking at the Presidential Palace after briefing party leaders on the troika’s review of the bailout programme, Anastasiades said he was satisfied because “through hard and systematic work, through determination and perseverance, we managed to be judged by our lenders themselves as credible partners”. The results of the troika’s first review of Cyprus’ implementation of a Memorandum of Understanding (MoU) signed ahead of a €10 billion international bailout constitutes a step towards restoring the credibility of Cyprus abroad, he said. “We have averted any new measures,” he added. At the same time, the president warned this was no time to be complacent but rather to work hard. He expressed his conviction that “we will make it because we are tenacious, we are effective and bold and we will turn the crisis into an opportunity”.

The first troika assessment, concluded on July 31, judged that Cyprus was “on track” to meeting its obligations, but that there was still a great deal of uncertainty regarding the future. The international lenders acknowledged, however, that this was not necessarily in the hands of the government. Anastasiades referred to the many in Cyprus and abroad who in the last four months where “not only pessimistic but, many a time, unjustifiably absolute in their criticism that we would not manage to meet the targets set”. He also highlighted the exit of the Bank of Cyprus from its resolution status and its reinstatement as an eligible counterparty by the European Central Bank.

The state has ensured the full recapitalisation of the co-operative movement through the purchase of €1.5 billion shares using public funds, he said, adding, the government was determined to safeguard the sector’s character and its social role. The state will become the exclusive owner of the co-op banks under the deal agreed with the troika. According to the EU’s state aid rules, for ownership to return to the co-op societies in the future, assuming they become profitable again, they would have to buy back the shares at the same value, plus dividends calculated annually at ten per cent of the total value. The president acknowledged that unemployment would only really be tackled when the economy is put back on a healthy footing.

A top goal of the government in the coming months is to attract investments while cultivating a friendly environment for investors, both foreign and local. “We have already started setting the foundations for the measures that have been announced. We will, however, intensify our efforts both with regard to the attraction of targeted investments as well as through changing the structures and procedures that facilitate investments horizontally across the spectrum of the state,” he said. Asked when economic recovery could be expected, Anastasiades said he anticipates positive outcomes will be evident certainly after the end of 2014.

Regarding the lifting of capital controls, banking sources told the Cyprus Mail that no timeline has been set, but instead a gradual relaxation linked with certain steps taken and defined milestones.

Source: Cyprus Mail

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