MONDAY, 23 JUL 2018

 

CONNECT

Facebook Linked In Twitter
GAP_Group_2018_728x90px
GloriaJeans_266x90px
IMH LTD

Eurofast Appoints New Director

Georgiades: Credit Rating Agencies Reports In Line With Government Estimates

IMH LTD
GAP_Group_2018_468x60px

OPINION

Opportunities for Cyprus from Brexit

Opportunities for Cyprus from Brexit

Brexit is expected to have a marginally negative but manageable impact on the Cyprus economy, as confirmed by the annual report of the Central Bank of Cyprus of December 2016. This conclusion is based both on the flexibility demonstrated by the tourism sector over the years and a gradual decline in reliance on the United Kingdom market, as well as the partial mitigation of the impact of a drop in the export of services to the United Kingdom from lower costs for the import of goods and services.

At the same time, it should be noted that Brexit can also create opportunities, given that Cyprus’ membership of the EU and of the Eurozone, the Cypriot legal system which is based on English law, the low tax environment, Cyprus’ geographical position and the high quality of its human capital may attract companies which want to retain access to the European Economic Area.

At EU level, Brexit is expected to create additional market volatility. On the one hand, we see a slowdown in GDP growth in the United Kingdom which is estimated to average 1.6% over the next few years (Bank of England projections). On the other, there is growth in a number of EU countries which are benefitting from increased ECB liquidity as well as from the relocation of some services from the UK to EU member states because of Brexit. However the long term financial impact on EU member states as a whole will depend on the future context of trade relations.

All the possible negotiating models between the UK and the EU (bilateral agreements, a commercial agreement of the Norway type, an agreement modelled on the EU-Canada agreement, an interim agreement etc.) will make trade between the United Kingdom and the EU more expensive, which is harmful to the potential economic growth of both partners. However, the structure of the Member States of the European Union and their economic size will to a large extent determine the further development of the negotiations. It is estimated that only 2.6% of the European Union's GDP is directed in the form of exports to the United Kingdom (ECB data June 2016).Particularly if the EU, to a large extent, retains free trade with the UK where it has a surplus and curbs obstacles in the financial services sector where there is a deficit (where most companies of the financial sector have their headquarters in London), the financial impact on the EU is expected to be much lower than on United Kingdom.

In any case, a framework is expected to be formulated in the coming months as regards the future of the negotiations. It is essential that during this time Cyprus makes the best of its close ties and the competitive advantages set out above, so as to achieve a beneficial agreement with the United Kingdom post-Brexit.

As CFA Society Cyprus, we are monitoring developments and participating in advisory bodies so as to contribute with our expertise and experience to forging the best possible continuation of Cyprus’ relationship with the United Kingdom after it has left the EU.

 

*Vice president of the CFA Society Cyprus, member of the Brexit Steering Committee of the Association  of Cyprus Banks 

MORE ON OPINION

Efforts from EU Reduce Air Pollution from Shipping

Sulphur Oxides (SOx) are emitted when marine or other liquid fuels containing Sulphur are ...

Tax Department Aims to Streamline Payment of Tax Liabilities

One of the Tax Department's main priorities is to streamline and modernise its ...

Hodeida and the Intervention of the Arab Coalition in Yemen

The intervention of the Arab Coalition in Yemen, as well as the ongoing operations around ...

FROM AROUND GOLDNEWS

   

Syllouris – Varemenos Discuss the Cyprus Problem, the Economy and Current Affairs

Acting Cyprus President and House Speaker Demetris Syllouris and 2nd Deputy Speaker of the Hellenic Parliament Georgios Varemenos had a meeting in Nicosia ...
   

Cyprus Records Largest Annual Decrease in Public Debt

Public debt in Cyprus recorded the largest annual decrease in the EU, with -11.3 points, moving from 106% of GDP a year ago to 94.7% in Q1 2018, according to ...
   

Signing of Agreement for the Operation of a ‘Satellite Casino’ at Larnaka International Airport

Hermes Airports Ltd and Integrated Casino Resorts Cyprus Ltd (ICR Cyprus) announce the signing of a commercial agreement with which the airport operating ...
   

Pound Drops below $1.30 as June Retail Sales Fall

The pound has fallen under $1.30 after a surprise fall in retail sales in June, confounding expectations of an increase. The Office for National Statistics ...
   

Ryanair Flight Cancellations Affect 4,000 People

Ryanair pilots have gone on strike, resulting in 4,000 people having their flights between the Republic of Ireland and the UK cancelled. It is the second of ...
   

Burberry Burns Bags, Clothes and Perfume worth Millions

Burberry, the upmarket British fashion label, destroyed unsold clothes, accessories and perfume worth £28.6m last year to protect its brand. It takes ...
   

Trump Slams EU over $5 Billion Fine On Google

U.S. President Donald Trump on Thursday 19 July criticized the European Union over a record $5 billion fine EU antitrust regulators imposed on Google, saying ...
   

Georgiades: Credit Rating Agencies Reports In Line With Government Estimates

Finance Minister Harris Georgiades said Thursday 19 July that the latest reports of credit rating agencies about Cyprus were in line with the ...
 

YOUR COMMENTS

HEADLINES

MOST POPULAR

Invest Career 19/04-26/08
Gold_Digital_Edition_300x250px

IMH LTD