I am delighted to participate in the 1st Greece - Cyprus Business Summit, which aspires to further strengthen the cooperation between Cyprus and Greece, on an institutional, administrative and economic level.
The ties between Cyprus and Greece are strong, timeless and undeniable. Historical, national, cultural and economic ties. Trade between Cyprus and Greece dates back to antiquity, to around 2000 years BC. Outward-looking, both Cyprus and Greece since the Bronze Age. Extroverted also in modern times, as two EU Member States facing common political and economic challenges, but also opportunities for cooperation.
Needless to say that BOTH national issues, and especially security issues, are fully intertwined with economic and energy issues. And it is for this reason that close cooperation between the two countries in the era of geopolitical instability we live in today is not only vital but imperative.
Friends,
We had hoped that this year would mark a return to growth and normalcy after more than two years of crisis due to the pandemic. An unprecedented crisis, which was not due to structural weaknesses in the economy, but for the first time in modern history we were forced to prohibit by law the operation of the market for an extended period of time, with all the risks that this entails. A crisis that we used many tools and huge reserves of our fiscal capacity to cope with. But we managed it in the best possible way, both Cyprus and Greece, protecting the incomes of workers, preventing the loss of jobs, giving appropriate liquidity to businesses, thus opening up a very positive perspective for the post-pandemic era.
Unfortunately, a new crisis succeeded the pandemic crisis before it was well over. The Russian invasion of Ukraine, the European Union's sanctions on Russia, and energy developments mark in my view an irreversible new economic era in the economic history of Europe and the world.
A new era that will have the following characteristics:
- First: If not the end of globalisation, at least, for the first time in modern economic history, its partial reversal is beginning. Policies will aim more at concentrating production closer to consumption to avoid asymmetric exogenous crises due to either geopolitical or other reasons such as health crises. The European Union is already drawing up its own roadmap for more autonomy.
- Second: The significantly higher energy price, which in the medium term will hurt general prosperity, because let's not forget that the prosperity of the last decades in the EU was built on the relatively cheap price of energy. This is being reversed both because of the green transition and geopolitical situations.
- Third: The potential loss of competitiveness of the European economy, at least in the coming years, due to the fact that climate change policy, sustainable development and the green transition will not be pursued with as much zeal and at as much cost in the same way by regions such as Asia, Russia and even possibly the US.
- Fourth: Increased fiscal risks that European economies will face. Increased fiscal needs will arise in the coming years to meet the extremely high targets now being negotiated under both the "Fit for 55" package and the needs that will arise as compensatory measures to avoid energy poverty and inflationary inequalities. For example, the extraordinary measures we have taken after the pandemic to mitigate the effects of inflation are already approaching 1% of GDP, at the same time that inflationary trends are not expected to decrease any time soon, with the risk of creating further income inequalities, with implications for the labour market and growth. At a time when recurrent crises intensify the need to shield public finances, so that in time of need there are reserves to deal with impacts, which is what happened at the time of the pandemic.
Ladies and gentlemen,
Economic management needs boldness, realism and a good understanding of the challenges we face in the coming years, so that we can formulate the appropriate policies.
Ensuring sustainable growth and strengthening the resilience of the economy is one of the most important priorities of both the Greek and the Cypriot governments. There is also an urgent need to further diversify our economic model through a holistic approach, through very specific policies, investments and reforms.
And it is here that Cyprus and Greece, despite the peculiarities of each economy, share the same direction.
We have both proven that with the right policies we can manage crises.
We agree on
- As much growth as possible.
- As much use as possible of the Cyprus and Greece Recovery Fund and the use of co-financing from the private sector, both of which have received praise from the European Commission itself for the quality of their programmes.
- As much private investment as possible through a favourable business environment and incentives.
- As much private investment as possible through a favourable business environment and incentives.
- Rational management of public finances and public resources.
- Reforms
In this context, as Cyprus we have developed the new Long-Term Strategy for the Sustainable Development of the Cyprus economy and a new, modern economic model, oriented towards enhancing the sustainability, resilience and international competitiveness of the Cyprus economy. This is achieved through more than 200 reforms and specific actions and programmes aimed at broadening the productive model of the economy and developing specific sectors on which our country's reform and investment policy will focus for the next 15 years.
Friends,
These are difficult times. The challenges are mostly common to both countries.
The funding we have received from Europe is of huge importance and should be fully utilized. Both countries, Cyprus and Greece, have received credit from the European Commission for the quality of the Programmes contained in the recovery funds.
Any under-utilisation of these funds either for political reasons or for reasons of administrative inefficiency would be criminal against our countries and against future generations. We will manage.
It is also an opportunity to promote projects of regional importance in the field of energy and telecommunications for the benefit of both countries.
Of particular importance is regional cooperation through the new East Med Corridor submarine and terrestrial cable system for telecommunications connectivity between Asia and Europe, which will pass through Saudi Arabia, Jordan, Israel, Israel, Cyprus and Greece and end in Italy. A project worth around €700 million that creates for the first time a new telecoms route in the eastern region of Europe, with huge business potential and stability, involving telecoms companies from Greece and Cyprus with a share of around 40%.
It is also with great satisfaction that the "Euro Asia Interconnector" project, a project of common interest concerning the electrical interconnection of Israel-Cyprus-Greece (Crete) systems, has been included in our National Plan. A project whose need is also intertwined with the challenges of the times and with energy connectivity.
The plans and European initiatives exist and it is up to us to make appropriate use of them, both at the level of governments, public institutions and especially among businesses and the business world. As I mentioned before, the development of synergies between countries with common bonds and objectives is particularly important in the era of uncertainty and geopolitical instability we are living in. Further cooperation on projects of common interest and exchange of know-how is imperative for both countries.
It is up to us to seize all opportunities for our common goal, that of sustainable development.
In conclusion, let me congratulate the organisers for this excellent initiative of organising today's conference, which is expected to provide everyone with valuable information and lead to fruitful discussions.
Thank you.
(MB/EXP)
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