neo February 5, 2014 No Comments

gabiBilateral relations between Cyprus and Germany are getting stronger day by day, the German Ambassador to Cyprus, Dr. Gabriela Guellil, has stated in an interview with the Cyprus News Agency (CNA).

Covering a range of topics, Guellil underlined that the implementation of the economic adjustment programme will help Cyprus to stabilise the financial sector, to modernise its administration, and to become a trustworthy and competitive economic player again. – Moreover, the discovery of hydrocarbon reserves in the Exclusive Economic Zone (EEZ) of Cyprus can, and should, serve as a catalyst for the creation of conditions that will enhance a just and viable solution of the Cyprus problem.

Expressing satisfaction with the fact that Cyprus is receiving a lot of acknowledgement by its international lenders, the Troika, during its evaluation missions, Guellil credited the Government of Cyprus for taking all necessary measures to restore the confidence in the international markets.

Furthermore, the German diplomat praises the confidence of the business community in Cyprus as increasing with every positive evaluation of the implementation of the adjustment programme by the Troika.

The full text is transcribed below:

Do you believe that relations between Cyprus and Germany remain the same after the events before and after the Eurogroup in March last year?

I believe our relations are getting stronger day by day. Cyprus and Germany are partners. We are members of the European Union (EU). We are members of the Eurogroup. The previous Government applied for the European Stability Mechanism (ESM) in June 2012; the new Government took over in March 2013 and had to take action to avoid bankruptcy, which would have resulted in a collapse of the banking system.

In this crucial moment the Eurogroup and Germany stood firmly by the side of Cyprus to provide much needed financial support when Cyprus had no access to other resources. The agreement reached in March 2013 resulted in the economic adjustment programme. The implementation of this programme will help Cyprus to stabilise the financial sector, to modernise the administration and to become a trustworthy and competitive economic player again.

The challenge for Europe today is to avoid that a crisis similar to the one we have been experiencing will happen again. Therefore, we are working hard to bring about a ‘banking union’, providing the frame to stabilise the eurozone in a sustainable way.

We have to pull our act together and be prepared. We have to face realities and act responsibly.

What counts is the way forward. Germany is committed to European integration and partnership. With this in mind, we offer support and solidarity.

Chancellor Angela Merkel and President Nicos Anastasiades have been friends and allies for years. Our leaders meet regularly and they communicate directly. A further positive step in the relationship between our two countries will be the President’s visit to Berlin in the upcoming months.

Cypriot Minister of Finance, Harris Georgiades, has said that Moneyval and Deloitte have found that Cyprus meets the conditions for countering money laundering. He said: “The situation for Cyprus is far better than what perhaps many abroad wished to portray,” adding that “the investigations that have taken place do not corroborate what various quarters were accusing us of”. Was Germany wrong in its statements about Russian oligarchs and money laundering in Cyprus?

The Memorandum of Understanding (MoU) agreed upon between Cyprus and the Eurogroup stipulates that the anti-money laundering framework will be strengthened in line with best practice. While Cyprus’ anti-money laundering regime had received an overall positive evaluation in the 2011 Moneyval report, the authorities are committed to further enhancing their standing by taking a number of measures, in line with recommendations made by the International Monetary Fund (IMF) staff. The authorities are following an action plan to implement commitments.

The best way to counter negative allegations in the media is to restore trust. If there is confidence that business transactions are carried out in a transparent way based on recognised standards and principles, Cyprus will regain the image it deserves. I feel a certain pride that my host country, Cyprus, has received a lot of acknowledgement by the Troika evaluation missions – and also my government – for the efforts to implement the provisions of the MoU. I trust that the Minister of Finance is taking his job very seriously, that he is taking all the measures needed to re-establish confidence in the international markets. Working hard on issues is a legitimate and convincing approach to silence criticism.

Do German businesspeople have confidence in the Cypriot economy after the Eurogroup events, in order to come to Cyprus and invest? Are there any future concrete investments underway from Germany to Cyprus?

Generally speaking, the confidence of the business community increased substantially after the Eurogroup decisions, if compared to the situation of a potential bankruptcy of the state before the events. It continues to increase with every positive evaluation of the implementation of the adjustment programme by the Troika. So far, this increasing confidence has not led to specific sizeable investment projects that we know.

We should avoid raising expectations to an extent that we cannot live up to. We should base assumptions on empirical knowledge. I do not know of statistical data about how the German business community sees Cyprus or something like a business climate barometer regarding German investments in Cyprus.

Of course, as the German Ambassador in Cyprus, I would like to see German businesspeople get interested in Cyprus, to have them invest and thereby contribute to the recovery of the economy of the island. However, we live in a competitive world. Cyprus has to attract investors, it has to offer opportunities and it has to eliminate potential obstacles.

How often do we read and hear complaints about bureaucratic procedures frustrating the local – and foreign – business community? I would like to encourage the authorities to continue reforms of administration in order to make it more efficient and transparent.

German business will go wherever the conditions are favourable. They are not likely to dive into activities that they cannot overlook, and they prefer to calculate risks from the beginning. Individually as well as collectively, Cypriots can contribute a lot to create a positive perception. The Embassy is in contact with the Cyprus Chamber of Commerce and Industry and individual companies to discuss possibilities for further bilateral engagement.

Berlin has always supported the reunification of Cyprus. Do you believe that efforts to reunify the island can yield results, given the fact that the two sides have not agreed yet on a joint declaration?

The reunification of the island will succeed if the political will on both sides is strong enough. It needs favourable external conditions. It needs courage to make concessions because any compromise will include disappointment to either side. To unfreeze a frozen conflict after so many years and so many failed efforts is an uphill battle and bears the risk to turn out to be a Sisyphus endeavour. It needs self confidence to overcome obstacles and it needs confidence in the other. There is not enough confidence – and this is a major concern.

We are waiting for a restart of negotiations; we are waiting for progress in matters of substance. Any deadlock of the negotiations costing further delay will not be beneficial for neither of the sides. We would like to see progress. We know that President Anastasiades and his Government are dedicating all their efforts to a just and viable settlement. Efforts can yield results.

Does Germany believe that Turkey should join the EU, given its refusal to meet its EU obligations (as outlined in the EU – Turkey negotiating framework in 2005) regarding the Cyprus problem, the Ankara Protocol, Turkey’s veto when Cyprus wishes to enter an international organisation, etc?

Germany discusses the process of accession of Turkey with its EU partners on a step-by-step basis. On government level, the European Council conclusions of December 2013 paved the way for further negotiations, including the opening of new Chapters as the recent positive decision of the Council on Chapter 22 has shown. Other Chapters blocked – in particular 23 and 24 – should follow in due course. Germany stands firm in its position on the Ankara protocol, that is, the obligation of Turkey to implement the provisions of the protocol.

Does Germany see any connection between the findings of hydrocarbon reserves in Cyprus’ EEZ with the solution of the Cyprus problem?

The discovery of hydrocarbon reserves in the EEZ of Cyprus can and should serve as a catalyst for the creation of conditions that will enhance a just and viable solution of the Cyprus problem. The exploitation of the natural resources can bring about political space of manoeuvre – and enormous economic benefits. The Cyprus problem and the hydrocarbon issue will converge if the desired settlement is reached. At the same time, I do believe that the settlement can be facilitated if cooperation is achieved.

How does Berlin comment on Turkey’s aggression in Cyprus’ EEZ, or Ergodan’s statement that ‘there is no such country called Cyprus’?

There is a country called Cyprus, in the Southeastern Mediterranean, member of the European Union. It disposes of an EEZ in accordance with International Law. Cyprus, however, is a divided country. For now 50 years, the United Nations Peacekeeping Force in Cyprus (UNFICYP) has been deployed to prevent a recurrence of fighting and to contribute to the maintenance of law and order and a return to normal conditions. Normal, for me, would be that Cyprus will be able to exercise full sovereignty over all its territory and that Cyprus and Turkey develop good neighbourly relations, recognising each other: maybe – let me be courageous – both being members of NATO.

Is there any possibility for Germany to involve itself in the Cyprus energy sector?

The energy sector is undergoing changes. Many questions trouble the industry. With regard to exploration, the big stakeholders in the upstream business – international holdings – have to allocate huge investments and financing binding them for a very long time, 25 years or even more. There are many alternatives out there in the markets. Cyprus in its geostrategic location is an attractive option. German firms are more likely to get involved if projects are concretised and feasibility studies available. Complimentary to the hydrocarbon issue there is the renewable energy sector that Germany is focusing on. There are many possibilities for business cooperation in the private sector.