President Nicos Anastasiades said that a probable settlement of the Cyprus Problem would be “the most important” economy-boosting structural reform in the coming decades, in addition to those proposed by the government.
“However, as well as the obvious advantages for the entire people of Cyprus, a solution will transform Cyprus into a model country of stability strengthening our role as security provider in one of the most turbulent areas of the world,” he told delegates at a conference on Tuesday according to the emailed transcript of his speech.
It would also boost the European Union’s ties to Turkey, he said.
Anastasiades said that for the moment Cyprus’s banking sector continued to face challenges following the 2013 banking crisis and its recapitalisation – mainly through deposits – which included the restructuring of bad loans, half of banks’ loan portfolio.
“It is however an important fact that a comprehensive legislative framework has been shaped by the government which facilitates restructuring procedure by providing incentives to borrowers and lenders to find mutually beneficial solutions,” he said.
“It is encouraging that the upwards trend in non-performing loans has started to reverse after rising for two years, while borrowers’ ability to service their loans will improve as economic recovery consolidates,” he continued.
Anastasiades said that the Cypriot economy which exited last year a prolonged period of recession and expanded 1.7 per cent will grow this year at a rate between 2.7 per cent and 3 per cent.
Anastasiades said that in addition to the proposed reform package consisting of seven draft bills to reform the public sector submitted to the parliament more than a year ago, the government’s reform agenda includes a modernisation of the governance system by establishing three politically independent under-secretariats with “extended responsibilities” on the areas of growth, tourism and shipping.
In addition, the government aims at simplifying licencing and operation of companies, the introduction of e-governance and to reform local administration.