Cyprus is and will remain an excellent destination for international business and the government is ready and willing to take action in this direction in order to rectify the shortcomings and determine improvements in what Cyprus has to offers in terms of strictures, policies, incentives, laws and regulations, Finance Minister Harris Georgiades has said.

Addressing Thursday a conference in Nicosia, titled “The future of Cyprus for Russian Business, the Minister said that being an international business center and maintaining the competitive edge requires an economy to be in permanent mode of reform and innovative change.

“In our case, the deepening recession and the damage sustained require that efforts are doubled, this is a clear commitment by President Anastasiades and his government”, the Minister said.

He went on to say that the goal is to create a new partnership between the private and the public sector, between state and enterprise, adding that this requires a complete reform of the civil service so that bureaucracy gives way to efficiency and transparency.

“This also requires a correction of public finances which will allow us to maintain an attractive and stable tax regime,” he added.

Finance Minister pointed out that restoring the viability of public finances by implementing reform will be crucial in reestablishing the credibility of Cyprus in the eyes of the markets.

Referring to the banking sector, the Minister said that a combination of reckless business decisions, poor corporate governance and weak supervision as well as some negligent political decisions or indecisions have led the local banking system to a crisis. “We must learn from our mistakes and look ahead.”

“The restructuring and recapitalization of our baking system is proceeding and we must all ensure that this is completed without delay”, he said.

The Minister noted that Russian business has been instrumental in the development of the Cypriot economy, adding that the Cyprus service sector was beneficial for Russian business as well.

“I am sure that our business, financial and commercial relations can be maintained and enhanced and this will provide the best boost to the already excellent political relations between Russia and Cyprus”, he concluded.

Addressing the seminar, the Russian Ambassador to Cyprus Stanislav Osadchiy, expressed his conviction that Russian capitals will remain on the island, following the Eurogroup decision last March and the haircut in the deposits.

He said that he has been exchanging views with business circles in Moscow and they too feel that they must remain in Cyprus and provide assistance to the Cypriot economy.

“Cyprus, one of the strongest financial centres, has been exposed to irreversible damage and today nobody can say for sure how soon the banking sector is able to regain its position for enterprises”, he said.

He however noted that sooner or later “the negative ground will be overcome and the economies will rise again, therefore it is important to rebuild the confidence of investors, many of them Russians”.

The Russian Ambassador said the seminar provides the opportunity to exchange views and suggestions for Cyprus to exit the crisis and referred to the long-lasting trade and business cooperation between Cyprus and Russia, adding that Cyprus was among the first countries to invest in the Russian economy.

Marios Tsiakkis, Secretary General of Cyprus Chamber of Commerce and Industry (CCCI), co-organiser of the seminar, expressed his conviction that there is a future for business from Russia.

He said that despite the events following the Eurogroup decision on Cyprus, the economy did not collapse, expressing his conviction that “we will regain all lost ground.”

“Our banking system is slowly and steadily recovering. So much so, that in the Board of the Bank of Cyprus, 6 board members are Russians. That says a lot but more importantly it reiterates the confidence of the Russian business community in our system. A system that maintains all its advantages, which of course we are ready to improve further, taking into account your views and concerns”, he added.

Chairman of the Cyprus-Russia Business Association Evgenos Evgeniou said that Cyprus is regaining its credibility as a business center and an investment destination and dedication must continue.

He expressed his certainty that the deliberations of the seminar, which concludes today, will provide the ground for a fruitful debate adding that it is important to draw lessons from the rest of the world.

Evgeniou announced that a similar seminar is expected to take place in Russia next November.

Cyprus and the European Commission, the European Central Bank and the IMF, collectively called as the Troika, agreed last March on a €10 billion EU bailout which featured a unprecedented conversion of 47.5% of uninsured deposits in the island`s largest lender, Bank of Cyprus (BOC), in a bid to plug its capital shortfall, in what is being called as a bail in.

BOC also absorbed the “good” part of Laiki Bank which will be wound down. As a result BOC is currently recording capital adequacy ration (Core Tier 1 capital) of 12% well above of the 9% threshold set out by the regulating framework.

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