Statement By The President Of The Republic Of Cyprus, Mr Nicos Anastasiades, On The Economy

During the last few days the situation of the economy and the banking system worsened dramatically. This resulted in the convening of the extraordinary meeting of the Eurogroup in Brussels, with the ultimate goal being the achievement of a loan agreement and the approval of a rescue programme. Otherwise, we would have been led to the collapse and the bankruptcy of the state.

Our going to Brussels for an extremely difficult mission had only one aim: To succeed in saving our homeland through the stabilization and the rectification of our banking system.

The hours were difficult, at some moment they were dramatic. Cyprus was a breath away from economic collapse. Our choices were not easy, and the environment not the most ideal. However, through tough negotiations, with persistence but also with a sense of responsibility we reached a result that safeguards the prospects of our country.

The agreement we reached is painful but the best we could secure under the circumstances. The danger for the bankruptcy of Cyprus is definitely left behind and the tragic consequences for the economy and the society are averted. The banking system will be stabilized. We succeeded in avoiding the bankruptcy of the Popular Bank and whatever that would mean. We secured the complete capitalization of the Bank of Cyprus. Through the merger of the Bank of Cyprus with the healthy section of the Popular Bank a strong bank is created able to serve the needs of the depositors and the national economy.

I don't even want to think what our day would be tomorrow without an agreement. During these critical hours I shared your agony about the course of the negotiations. My thoughts were constantly with you and I drew strength from the will of our people to overcome this obstacle too.

My friends,

Together, the people and the political leadership engaged in a big battle from which we came out wounded, but standing up and determined to make a new beginning. We leave behind us the uncertainty and the agony that we all lived through during the last months and we look to the future with optimism.

As of tomorrow a new period begins for Cyprus. In the following days difficult decisions will start to be implemented. Given the situation we found ourselves in there are no easy solutions. I was obliged to take difficult, painful but also bold decisions in order to secure a manageable tomorrow.

The Central Bank of Cyprus, on the basis of legislation adopted by the Parliament, will implement as of tomorrow certain restrictive measures with regard to financial transactions. It concerns a very temporary measure, which will gradually be relaxed. As a government, I want to assure you that we will do whatever possible so that we can return soon to full normalcy. That is why I call on everyone to work together calmly, patiently and resolutely in order to succeed the earliest possible the restarting of our economy.

The European Central Bank from now on safeguards the liquidity of the banking system. Through the loan agreement we succeed in drawing ten billion euro, a fact that proves that we restore our credibility, but which also constitutes actual proof that our creditors have confidence in the resourcefulness of our people and the prospects of our economy.

My friends,

During these difficult hours, all of us, state and society, we ought to stand by our compatriots who will be in need. We have an obligation to stand on our feet and to get out of the vicious cycle of recession. The government is committed to do everything so that through specific measures it will stand by the side of those who will shoulder the painful consequences. As a first measure, all pension funds of the affected banks will be safeguarded.
With the termination of the uncertainty we focus our attention on policies that will help in attracting investments and on development projects that will create new employment positions.

Compatriots,

In all these days there were voices heard calling for the exit of Cyprus from the euro. Despite the bitterness and disappointment that we all felt from the stance that some of our partners held towards Cyprus, I don't think that the disengagement from the European family would address the crisis.

My friends,

Understanding the justifiable sense of rage occupying you because of the responsibilities of those who led us to the current situation, I commit myself that in the next days the Council of Ministers will appoint criminal investigators with clear and expanded terms of reference in order to seek for and attribute responsibilities where they belong.

We have fought the battle for the sake of today, as well as of tomorrow, for the sake of our children and our grandchildren. As from today we start together the effort of reconstruction. Our country has gone through worse situations. The people of Cyprus, with the obstinacy, the love for their country, the industriousness and the sense of responsibility that characterize them will reverse the negative state of affairs and will take again the road to creation. Let’s convert the crisis into an opportunity making a new start so as to build the future on more solid and healthy foundations.

It would be a gross oversight of me not to thank warmly my colleagues, both those who accompanied me to Brussels and those who worked incessantly in Cyprus in order to be able to reach the agreement for the rescue of Cyprus economy. I cannot but thank warmly the political leaders with whom I was in continuous consultation at all the stages of the talks.