Cyprus PIO: News Update in English, 03-01-23

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

Thursday, 23 January 2003

CONTENTS

• [01] Maurer: Cyprus will be among first new member states to adopt euro
• [02] UN-led direct peace talks continue

[01] Maurer: Cyprus will be among first new member states to adopt euro

Mr. Maurer was speaking after his meeting with the Finance Minister, Mr. Takis Klerides, yesterday morning, with whom he discussed mainly the Government's tax reform package, the further convergence of the Cypriot economy with EU levels, and the adoption of the euro once Cyprus joins the Economic and Monetary Union (EMU).

The Commission official expressed satisfaction over the work achieved by the Finance Ministry with regard to reforming the country's tax system and implementing the reform package.

"Changing the [tax] system was a successful effort, since we were able to resolve problems in the sector of international businesses stationed in Cyprus, so as to render investments of such businesses profitable", Mr. Maurer said.

As regards Cyprus' efforts for complying with the Maastricht convergence criteria - that must be fully met in order for an EU member state to join the EMU - he noted a positive process, adding, "If Cyprus follows this process, we are certain that Cyprus will be among the first member states to adopt the euro".

On the same issue, the Finance Minister, Mr. Takis Klerides, said that Cyprus "might be the only country, or maybe among the only two countries that have expressed readiness to adopt the euro two years after accession, that means in May 2006", adding that the Cyprus pound had been pegged with the EU currency since 1992, something that indicated Cyprus' aspiration to achieve full convergence with the EU economic indicators.

"I believe that the euro will acquire more and more significance, from today until accession - as a first step - and also after accession, with Cyprus' entry into the Eurozone and the adoption of the euro. It will acquire particular significance after the full liberalisation of currency restrictions", Mr. Klerides said.

Asked to comment on the status of International Business Units (IBU's) stationed on the island, the Finance Minister noted that the IBU's that were registered before 2002 would sustain their advantages until and 2005. These advantages included a low tax rate of 4,25%. On the other hand, the IBU's that were registered in 2002 and after, would be subject to the new tax system, providing for a tax rate of 10%.

Mr. Klerides stated, overall on the issue of tax reform, that the European Union gave the impetus for achieving such major changes, which were to the benefit of not only the Cypriot economy but also, first and foremost, the citizens.

[02] UN-led direct peace talks continue

The meeting took place in the context of the UN-led direct talks for reaching an agreement on a comprehensive settlement of the Cyprus problem, on the basis of the revised UN solution plan, submitted by the Secretary- General on 10 December 2002.

Their next meeting is scheduled for tomorrow afternoon.

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

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