ECONOMY

Cypriot officials are optimistic about the future of the economy once a negotiated political solution is reached

NICOSIA – Cyprus’s chief negotiator with the European Union, George Vassiliou, and Takis Clerides, the Finance Minister, on Saturday expressed their certainty that a successful conclusion to the negotiations on the Cyprus issue, on the basis of the plan presented by UN Secretary-General Kofi Annan, will open new prospects for the already strong Cypriot economy. Each mentioned a climate of enhanced security and reduced uncertainty as reasons that would attract foreign investment. Clerides added that an agreement on the status of the island would allow the central government to divert 250 million euros out of the 350 million currently spent on defense to more productive purposes. Their viewpoints contradict those of the skeptics who argue that the financially backward northern third of Cyprus, occupied by Turkey since 1974, would prove a burden. Vassiliou and Clerides point out that, on the contrary, this would result in significant inflows in EU aid and private investment to bring the northern territories on a par with the rest of the island. Clerides pointed out that if negotiations were to fail and the division of the island were to become permanent, no EU Structural Funds would be forthcoming, since the Republic of Cyprus, as a new EU member, would be sufficiently rich not to warrant aid from such funds. Greek Finance Minister Nikos Christodoulakis, who visited the island and met with several top politicians, including Cypriot President Glafcos Clerides, said the Annan plan was «a chance, albeit with several asterisks,» for Cyprus and recommended that Cyprus accelerate the introduction of the euro. Cypriot central banker Christodoulos Christodoulou said economic fundamentals were strong, with inflation and debt under control.