ECONOMY

Greece and Cyprus closer

Greece and Cyprus have seen spectacular growth in their economic, trade and business relations since the island republic’s entry into the European Union on April 1, 2004. «Within four to six years, we could be speaking about a full economic union, a single economic area,» the newspaper Politis quoted economic and diplomatic circles as saying. Greek products represented 17 percent of Cypriot imports this year, up 33 percent from 2004, as well as 26 percent of imports from other EU members. Greece received 13.5 percent of all Cypriot exports, or 24.5 percent of the island’s exports to other EU members. According to sources in Nicosia, Greece’s exports to Cyprus are likely to break the 1-billion-euro barrier in 2006, while the reverse trade flow is projected to approach 200 million euros. Bilateral trade is but one factor in the fast-growing economic ties between the two countries. The newspaper refers to an estimate of 500 Cypriot businesspeople increasingly active in Greece in the financial, hotel, real estate and construction sectors. Reversely, many Greece-based companies seem to have tapped the low corporate tax in Cyprus (15 percent – the second lowest in the EU after Ireland’s 12 percent) and have established hundreds of internationally oriented economic activities. In the first half of 2005, the number of Greek tourists visiting Cyprus rose 23 percent to 77,000, while there were 270,000 entries of Cypriots into Greece (up 11 percent – the number is largely accounted for by the many Cypriots who either study in Greece or reside here permanently).