S PEECH BY THE M INISTER OF F INANCE , M R .
C HARILAOS S TAVRAKIS , AT
THE D INNER OF EFC P ARTICIPANTS IN L IMASSOL , 28 MAY 2009
It is a great pleasure for me to welcome the informal Economic and Financial Committee meeting in Cyprus. I am fully aware of the vast importance of the role of the Committee in the effective preparation of the ECOFIN Council and I urge you to continue with the very good work.
I use this opportunity to reconfirm that undoubtedly Cyprus has benefited most from its accession to the EU, inter alia, via the implementation of long standing structural reforms, whereas the phase of preparation and eventual accession to the Eurozone, as from
1.1.2008, has protected the Cypriot economy from the severe implications of the current financial crisis.
The Cypriot economy copes relatively well with the current financial crisis and the economic recession, despite an unavoidable deceleration in its rate of growth, resulting from the particularly adverse external environment. Our financial sector remains sound, with a strong liquidity position and a comfortable capital adequacy as well as sufficient profitability. The Cypriot economy is growing at a rate of growth, which we expect it to be of the order of around 1% for 2009, under conditions of near full employment and price stability. The public finances will inevitably show deterioration this year, being negatively affected by the slowdown of the economy, as well as the changed composition of growth. A deficit of around 2-2.5% is expected. In this respect, I want to stress that our fiscal policy will remain prudent. , Indicative of the sound fundamentals of the Cypriot economy, has been the response of European investors to our Euro bond issue yesterday.
The issue was oversubscribed by over 450%, at a relatively favourable cost.
I have to acknowledge with satisfaction, that there was an adequate and co-ordinated response to the crisis at EU level via the implementation of the European Economic
Recovery Plan. I am confident that the recovery of the EU economies and the world economy will not wait for long.
Finally, I would like also to point out that we have recently started the preparations for the assumption of the EU presidency in the second half of 2012 and we will do our utmost for an effective and constructive cooperation with the EU institutions so as to have a successful presidency.
I wish you a constructive discussion during the workings of your Committee and a pleasant stay in Cyprus.