Cyprus Mail

Cyprus hoteliers fear consequences of Brexit

Legislation could lead to the public having to pay a fortune to be able to use some of our beaches

The possible impact on the Cypriot economy should the United Kingdom leave the European Union was examined during a meeting held on Tuesday at the foreign ministry with the participation of key government departments and private sector stakeholders, it emerged on Wednesday.
At the same time, however, the finance minister urged MPs at the House finance committee on Wednesday to refrain from discussing the potential effects of a Brexit in public.
Reliable sources have told the Cyprus News Agency (CNA) that following Tuesday’s meeting a document with the views of all parties will be drafted and a new meeting will be held following the referendum in the UK on June 23.
Rating agencies such as Standard and Poor`s believe that Ireland, Cyprus, Luxembourg and Malta stand to lose the most from a possible Brexit.
Speaking to CNA, general director of the Cyprus Hoteliers Association, Zaharias Ioannides, said that due to longstanding and close trade ties between Cyprus and the UK, a possible Brexit would have negative consequences on the island’s tourism sector on two levels.
The first, he said, concerns a weakened British pound that will adversely affect the competitiveness of tourist destinations in the euro area, including Cyprus, as 40 per cent of tourist arrivals come from the UK, generating revenue amounting to around €1bln annually.
However, he stressed, the impact will not be immediate as tourist bookings for 2016 have already been made.
“For this year the impact will be limited,” Ioannides said. “It important to be proactive, in case of a Brexit, with a view to minimising the medium-term and long-term impact of such development,“ he said.
In such an event, Cyprus will try to offset potential losses by attracting more tourists from countries in the region such as Israel and Lebanon, or from further east, like India and China.
The second matter relates to visas — whether EU member-states will be required to issue visas for British citizens in the transitional period.
This would affect the last-minute bookings market, which is growing rapidly as low-cost airlines increase, he said.
“There are solutions for such an eventuality such as the electronic prior approval used for Russian and Ukrainian citizens with very positive results,” he added. “There is a solution for everything provided we act immediately and in a timely manner.”
He also pointed out that depending on the final arrangements between London and Brussels, there could be other opportunities for Cyprus such as citizenships. Observers expect a rise in British nationals who would seek a European passport.
On Wednesday, Finance Minister Harris Georgiades urged House finance committee members to refrain from commenting on the possible impact of Britain’s exit from the EU.
Asked whether the government has a plan in place to address such impact, Georgiades said he would prefer not to “advertise” any such repercussions, should they be identified.
“Even if we thought there will be repercussions, this is not something I would advertise,” he said.
“I am not sure it is right for us to keep arguing the possible risks – both deputies and government ministers. The messages we send abroad should be reassuring.”
He added that Cyprus must never again appear to be “shooting ourselves in the foot”, as we have in the past.
“The ministry is closely monitoring the issue of Brexit,” was all Georgiades was prepared to say.
“At this point, there is not much more that can be done.”
What is most important in the event of a Brexit, he noted, is the negotiation of the terms of the country’s exit, which will last approximately two years.
“Actions will take place at that stage,” he said.
European Union President Donald Tusk, on the other hand, said recently that in the event of a Brexit it would take at least seven years to negotiate a new Britain-EU relationship.

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