Finance Minister Konstantinos Petridis participated in the informal teleconference of the EU Council of Finance Ministers on developments in Ukraine, which took place today, Wednesday, 2 March 2022.
The teleconference discussed the impact of the sanctions on both the Russian and the European economy. From the data to date, it appears that the sanctions are having a direct impact on the Russian economy. As far as the EU is concerned, the impact varies from country to country with the main risks being an increase in inflation, especially fuel and grain prices which will hit European economies. It was agreed to monitor developments in a coordinated manner and to explore ways of dealing with them.
In his intervention, among other things, the Finance Minister said that Cyprus stands in solidarity with Ukraine and supports its sovereignty, independence and territorial integrity against its internationally recognised borders. We are strongly in favour of EU unity, he stressed, as it makes us stronger as can be seen from the first effects of the sanctions, while expressing the hope that they will soon bring about the desired change in Russia's behaviour. Undoubtedly, he noted, these sanctions will also have a negative impact on the economies of the member states which we have to deal with.
The Minister pointed out that the decision to close Cyprus' airspace to aircraft operated by Russian carriers will negatively affect Russian tourist flows to Cyprus, which represent a significant percentage of annual tourist traffic.
As regards the financial sector, it is estimated that there will be no significant impact, given the minimal exposure of Cypriot banks to the Russian economy, as well as the fact that Russian deposits in Cyprus have decreased significantly in recent years. He also said that Cyprus has no exposure to Russian Treasury bonds or other types of investments in the Russian economy.
In conclusion, Mr. Tiridris said that the lack of compliance with sanctions by EU candidate countries, such as Turkey, is unacceptable as it erodes the effectiveness of the sanctions, while profits are made at the expense of the European economies that apply the sanctions.
In conclusion, Mr. Petrides stated Cyprus' decision to offer humanitarian aid to Ukraine and its readiness to receive a number of Ukrainian refugees.
IK
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