Cyprus Mail
Business

‘Russia sanctions create additional concerns for economy’

By Constantinos Psillides

European Union sanctions on Russia created additional concerns for Cyprus economy, President Nicos Anastasiades said on Thursday, assuring Russian businessmen that Cyprus was doing its best to deal with the financial crisis.

The Russian food embargo has hurt Cyprus exports to the tune of around €13 million a year, according to data from the agriculture ministry. It affects mainly citrus farmers.

Addressing a seminar on the future of Cyprus for Russian business, Anastasiades thanked Russian investors for their interest in Cyprus.

“The fact that international investment activity in the country is maintained at a high level, proves the foreign entrepreneur’s trust towards investing in Cyprus. To this end, I do believe that the prospects for the island look extremely promising,” he said.

Yet, he added, “we are aware of the difficulties, viewing them as a challenge for the future that is to be overcome by constantly being alert and concentrating on implementing our plan for further economic improvement.”

The president also talked about Cyprus path to financial stability, noting how the island’s credit outlook was upgraded by the international ratings agencies and how the country had returned to international markets.

The president also said company registrations had gone up by 13 per cent for the period between June and August of 2014 and that public finances were significantly improved.

Referring to Russia-Cyprus business relations, Anastasiades said that recent Russian investment activity “reflects the ongoing and steady business relationship between our countries, which also includes important tourism exchanges. In fact, he said, Russia was Cyprus’ second largest tourist market, with the numbers of Russian citizens visiting our island constantly increasing in recent years. Total tourist arrivals from Russia until August 2014 rose 17 per cent compared to the same period for 2013,” Anastasiades noted.

Anastasiades said that the government was greatly facilitating investments though the application of measures that involve, among others, the reduction of the time needed for issuing permits, the licensing and encouragement of the prompt completion of projects, the licensing of joint ventures and the granting of residence permits and citizenship to foreign investors.

On his part, ambassador of the Russian Federation to Cyprus Stanislav Osadchiy thanked Cyprus for “attempting to restrain Brussels from making this war of sanctions even worse. Our country is certainly taking all necessary diplomatic efforts to assist in bringing peace to Ukraine and we believe that political dialogue between Russia and EU at the present time is vital,” he said.

As regards the Cyprus economy he said: “We have taken some steps as well, among them the decision of the Russian Government to restructure previously granted credit in favour of our Cypriot friends.”

The Russian ambassador made clear that Russia continued to support the Cypriot economy through tourism and property investment.

Cyprus’ relationship with Russia and Russian businessmen has been strained for the last year, following the 2013 Eurogroup bank  haircut, which affected Russian depositors the most.

Bi-lateral relations were also hurt at an international level recently, following a book published by author/journalist Makarios Drousiotis, in which he argued that Russia was never a friend to Cyprus and that the “good Russians” angle was a myth perpetuated by politicians. At the time Drousiotis was employed at the presidential palace as a special advisor to the president.

The book prompted a response by the Russian embassy in the form of an open letter, attacking Drousiotis on his methodology and motives and making special note that he was advising the president. Anastasiades had to issue a statement saying that Russia-Cyprus relations were and always would be strong.

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