Cyprus PIO: News Update in English, 02-06-26

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From: The Republic of Cyprus Press and Information Office Server at <http://www.pio.gov.cy/>

Wednesday, 26 June 2002

CONTENTS

• [01] President Clerides addresses the Annual General Meeting of the Employers and Industrialists' Federation
• [02] EU Candidate States Chief Negotiators/ Meeting Conclusions
• [03] Minister of Commerce: "Cyprus will constitute a bridge between Europe and the Middle East"
• [04] PIO film wins international award

[01] President Clerides addresses the Annual General Meeting of the Employers and Industrialists' Federation

Making reference to the crucial period marked by the terrorist attacks against the United States, he stated that the Cyprus economy proved that it can cope successfully with conditions of uncertainty and said that the "dynamism and flexibility of the Cyprus economy constitute elements that lead Cyprus to stability, even in hard times". "The role of the OEV on this level is and will be decisive," he added.

Referring to economic indicators, he said: "in 2001 and despite adverse developments in the world economy, the rate of growth of the Cyprus economy has reached 4% while inflation was kept down to 2%. Unemployment was only 3% and so we have conditions of full employment.

The fiscal deficit in 2001 reached 2.8% of the Gross Domestic Product (GDP), which meets the relevant Maastricht criterion. The public debt, which amounts to 54.5% of the GDP also meets the Maastricht criterion.

As it is well known, the comparative advantages of Cyprus are mainly in the area of Services. The contribution of the Services sector in the distribution of the GDP exceeds 75%. According to the latest figures the Cyprus economy has gradually began to reduce its dependence on the tourist product with the increase of the contribution of other Services such as telecommunications, and financial and professional services.

For the current year indications for the Cyprus economy are satisfactory. The rate of growth will be around 3%, the fiscal deficit will decrease further to 2.5% of the GDP and inflation, excluding the increases in indirect taxes, will be kept at 2%. It is expected that conditions of full employment will prevail in the job market while unemployment will be at about 3.3% of the economically active population."

The government, through its proposal to radically reform the tax system has given an impetus to its efforts for modernization. With the cooperation of the Parliament and the political parties, the proposal for tax reform has been successfully concluded, thus contributing to the closing of the chapters on Taxation and Competition. Particularly as concerns enterprises the provision to essentially decrease company tax to 10% along with the incentives given for joint ventures and company mergers, are expected to increase investments and the effectiveness of Cyprus enterprises.

Finally, the President made reference to "the Cyprus Republic's most important success since it gained its independence", namely Cyprus' accession course to the European Union.

"The process of Cyprus' accession is already materializing through the harmonization with the acquis communautaire. Cyprus is just one step away from accession, having closed almost all chapters", he concluded.

[02] EU Candidate States Chief Negotiators/ Meeting Conclusions

At the meeting, the representatives assessed the Seville European Council Presidency conclusions along with the impending developments during the Danish Presidency, and the two issues which concern all of the candidate countries, namely agriculture and the budget, Mr. Vassiliou said.

With regard to the Seville European Council Presidency conclusions, Mr. Vassiliou said the representatives shared the opinion that the enlargement timetables had been reaffirmed at Seville and that the decision about the 10 candidate countries awaiting for accession would be finalised at the Copenhagen European Council on 13 December.

Referring to Cyprus' EU accession course, Mr. Vassiliou said:

"I would like to emphasise that the Seville conclusion is very favourable, for Cyprus in particular, since it stresses that Cyprus' accession will be completed and that a solution to the Cyprus problem is desirable. Ideally the EU member states would prefer the accession of a reunited Cyprus but this is not a precondition. They emphasise that any agreement on a solution would have to comply with the relevant UN resolutions and that a unified Cyprus will participate in the EU institutions, a Cyprus speaking with one voice and capable of applying the acquis communautaire on its entire territory. This is the best answer to Mr. Denktash's demand for two separate sovereignties, and in essence two separate states."

Moreover, the negotiators of the other five EU applicant countries answered to questions raised by the press regarding the completion of the enlargement process and the difficulties pertaining to the chapter of agriculture in particular.

[03] Minister of Commerce: "Cyprus will constitute a bridge between Europe and the Middle East"

In his speech, Mr Rolandis stressed that with its full accession to the EU, Cyprus would constitute the bridge between Europe and the other countries in the region, and the boarder of Europe in south-eastern Mediterranean, through which commerce would be carried out between Europe and the Middle East.

In his speech, the Minister also said the following:

"In recent years Cyprus has become an international commercial, financial and services centre. Its central geographic location together with its entrepreneurial environment and high standard of supporting facilities compare favourably with those of the best-established centres in the world.

A clear evidence of this is the large number of international business companies established on the island. The island has also proved to be an ideal centre for transit trade and for rendering shipping services worldwide.

Cyprus has a free market economy with the role of the government limited to the provision of public utilities and the necessary infrastructure. The government also promotes and maintains favourable investment conditions which permit entrepreneurs to participate directly in the process of economic development. Indeed a large number of non-resident individuals and corporations have been quick to spot and take advantage of the business opportunities offered by Cyprus.

Undoubtedly the existing Customs Union Regime and the anticipated EU membership of Cyprus provide numerous investment opportunities to international investors, such as joint ventures with local firms and other forms of industrial and economic cooperation. This would enable them to take advantage of Cyprus/ role as a bridge between Europe and the countries of the region with which Cyprus maintains excellent relations. In the year 2004 when Cyprus is anticipated to become a full member of the EU it will constitute the EU/s frontier in the south and in the east through which trade with Europe and the Middle East can be offered.

A sector which has been instrumental in the transformation of the economy and has enabled it to operate successfully in the borderless global economy is that of professional services.

Today Cyprus provides a wide range of professional services which correspond to international standards and are successfully exported. The major sectors are those of banking, medical, education, financial and consultancy services, market research, software and information technology.

Our Government, recognising the importance of the professional services sector, takes all those measures necessary for its enhancement and its further expansion. The existence of a strong and dynamic services sector is the prerequisite for the creation of a healthy and competitive economy fully integrated into the international environment. This way, we aspire to maintain and promote Cyprus/ position as a regional business centre with financial strength.

Concluding, Mr Rolandis expressed confidence that events similar to the seminar would "further contribute to the promotion and strengthening of financial and commercial ties between Cyprus and Russia".

Finally, he availed himself of the opportunity to assure the participants of his continuous support and assistance.

[04] PIO film wins international award

It is worth mentioning that this is the second international award given to the particular film. The previous award was the "Special Jury Award of the 35th Annual Houston International Film", last April.

The film, which aims to inform on the Cyprus problem and Cyprus' accession course, was produced by the Press and Information Office in cooperation with the American Production House "Peter Vogt and Associates Inc". It makes a detailed analysis/presentation of the Cyprus problem throughout history, as well as of the advantages of EU accession for both communities on the island

From the Republic of Cyprus Press and Information Office (PIO) Server at http://www.pio.gov.cy/

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