Cyprus Mail

Cyprus needs to clear its name after failed citizenship scheme, leading economist says

It will take a long time for Cyprus to clear its name after the citizenship by investment programme debacle, according to economist Marios Clerides, former chairman of the Cyprus Securities and Exchange Commission (Cysec).

The government said on Tuesday it would be scrapping the scheme in its current form from November 1 as police launched an investigation following an undercover video implicating House President Demetris Syllouris, who resigned from his position on Thursday.

Akel MP Christakis Giovanis was also implicated in the damning report by Al Jazeera, which showed them ready to assist a Chinese businessman with a criminal record secure a Cypriot passport. Giovanis resigned on Tuesday.

“In order for the country to redeem itself, it is now necessary to convince everyone that laws and rules are followed to the letter,” Clerides said.

“Foreign investors should not have to think they will do business with unreliable and shady people.”

According to Clerides, as the fallout from the documentary destroyed Cyprus’ reputation abroad and will prevent bona fide investments from taking place in the island for the time being.

“The scandal could act as a deterrent for legitimate investors. What kind of investments can the country attract with such a reputation?”

“Should the programme be reinstated, it will have to be much more transparent so that no one could have doubts on whether it will retort to an illegal activity,” he said.

Clerides also stressed that the new potential and revisited programme should be supervised by third parties who will not be able to benefit from it, including EU observers.

Regarding the impact on state revenues from the suspension of the scheme, Clerides said that no one exactly knows what the real loss is.

He added that former finance minister Harris Georgiades said that its contribution to Cyprus’ GDP amounted to only 0.3 per cent.

“We do not know how much money that entered in the country through the scheme was actually spent or remained here, that is another thing to take under consideration should it return in a different form,” he said.

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