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Cyprus ‘worse off’ after EU accession

cyprus business now

By Stefanos Evripidou

CYPRUS has been “a clear loser” of EU membership, according to a comparative report by The Economist.

The influential publication looked at how the ten EU member states that joined the bloc as part of the ‘big bang’ enlargement in 2004 have fared in the last decade.

In 2004, the EU went from being a club of 15 members to 25, taking in eight former Warsaw Pact countries and the small Mediterranean island-states of Malta and Cyprus.

According to a comparative look at GDP per person for each country in 2004 and 2014, Cyprus came out “the clear loser” of the pack since EU membership.

“Cypriots have actually become less well-off, suffering a 13 per cent decline in living standards since 2004,” said The Economist.

From the new member states, Slovenia, which also experienced a big banking crisis also did relatively poorly, with GDP per capita rising by only 7 per cent.

Slovenia’s lot does not look so poor when compared to Cyprus but if one looks at the winners of EU membership, the difference is stark.

The Baltic countries, Lithuania and Latvia, together with Poland and Slovakia, registered gains of over 40 per cent in GDP per person.

The Economist notes that the advances in the Baltic economies (including Estonia’s 30 per cent gain) are particularly notable “since all three experienced savage downturns in 2009, after the financial crisis”.

From the ten new members of the biggest enlargement in EU history, six have since adopted the euro, with Latvia the latest country to adopt the single currency.

The article argues those countries that joined the single currency before the financial crisis peaked in late 2008, such as Slovenia in 2007 and Cyprus in 2008, performed worse than those joining after it, such as Estonia in 2011.

“But Cyprus’ reckless banking expansion dated back to joining the EU rather than the euro. And Hungary, outside the euro, has done almost as badly as Slovenia, within it,” said The Economist.

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