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A Cyprus settlement entails challenges and long-term opportunities, IMF and EC say

Vincenzo Guzzo, IMF rep in Cyprus

A settlement of the Cyprus problem would entail “tremendous” investment opportunities in the long term but would be accompanied by short-term challenges, the European Commission and the IMF have said.

Their remarks come as the two Cypriot leaders are about to engage into a discussion on territorial adjustments in case of a settlement, to take place in Mont Pelerin, Switzerland, in what has been described as crucial turning point in the UN-sponsored talks.

The IMF and the EC have been advising the two communities on the economic and financial aspect of a settlement.

“The potential is tremendous opportunity in terms of investments and trade in the long run,” Vicenzo Guzzo, the IMF`s Cyprus representative told an Economist conference in Nicosia and added that “obviously what is required is a sustainable economic and financial basis which requires a long of preparation and requires important economic policy decisions.”

Without elaborating on the advice given by the IMF on the Cyprus settlement, Guzzo noted however that “I cannot emphasise more what is the relevance of this type of preparatory wrong if and when the solution would be agreed.”

On his part, Daniel Daco, head of the EC mission for Cyprus, noted that “a Cyprus settlement is a tremendous opportunity in the long-term but there will be also tremendous challenges in the short to medium term.”

“And preparedness is very important and we are also in discussions with the two sides to see what can be done to make sure that if this occurs this will be a success and that we can cope with the challenges.”

He underlined the need for continued reform drive in Cyprus as “the challenges Cyprus now faces will be magnified if reunification occurs.”

However, Undersecretary to the President, Constantinos Petrides pointed out that Cyprus should reflect on the cost of non-solution rather on the challenges.

“There is an opportunity cost. When we are talking about the short-term cost of reconstruction and solution which are the opportunities of non-solution for this country. Let’s all reflect on that,” he underlined.

“I don`t think that there is need to increase public spending for infrastructure projects such as in other cases. There will be some short-term cost, we will see how there are financed but we have to see the big picture,” he concluded.


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