By Hamza Hendawi
GEORGE VASSILIOU, Cyprus’ chief EU accession negotiator, yesterday sought to allay the fears of the offshore sector over its future on the island, saying its maintenance would serve the island and the European Union equally.
Offshore businessmen have in recent months repeatedly voiced their concern that the sector could fold with the island’s accession to the EU, and have urged the government to heed their views as it formulates its argument in talks with Brussels in defence of the offshore business.
The government has repeatedly assured them that it would do its utmost to keep offshore businesses after accession, but yesterday’s remarks by Vassiliou were particularly emphatic and by far the most reassuring.
A former president and a millionaire-businessman, Vassiliou, addressing a business conference organised by the Popular Bank, said: “I say that these worries are understandable but not justified because in my opinion we should be able to secure the future of the offshore sector.
“Because, as I said, Cyprus and the offshore sector cannot be split apart and for that reason I believe that yes, there is a future for the offshore sector in Cyprus, not outside the EU, but in the EU.”
Finance Minister Christodoulos Christodoulou, addressing the same conference, also sought to reassure the offshore business community, saying the regime did not significantly distort conditions of competition within the Union as most of its dealings was in fact with parties outside the EU.
Other arguments to be used by Cyprus in defence of its offshore sector, according to Christodoulou, included its importance to the island’s economy, and the fact that similar regimes already existed within the EU, such as Madeira in Portugal, Dublin in Ireland, and Trieste in Italy.
“We will spare no effort to make sure that the offshore sector will continue its growth pattern for decades to come,” the minister said.
Cyprus and five other eastern and central European countries began accession talks with the EU late in March. The island is not expected to become a member before the year 2002. Vassiliou was named head of the island’s delegation to the accession talks in reward for his support of President Glafcos Clerides in the February elections and in recognition of his credentials as a respected negotiator and economist.
“The offshore sector is indispensable to Cyprus,” declared Vassiliou yesterday. “It is not just useful, it is not just a good addition to our income, it is just part of our life which you cannot take away.”
Cyprus, in a bid to rebuild an economy devastated by Turkey’s 1974 invasion and the loss of resources in the northern third of the island, first introduced laws to attract offshore businesses in the mid-1970s.
More than 20 years on, there are more than 30,000 offshore companies registered on the island, of which more than a 1,000 have fully-fledged offices offering employment to thousands of Cypriots. The sector contributes about 4 per cent of GDP and 11 per cent of invisible receipts.
“If Cyprus has a future, it is a future as a world services centre,” declared Vassiliou who, perhaps exaggerating to make a point, noted that the sun and fair weather were about all the resources available to the island.
“The offshore sector in Cyprus is useful for the people involved, but it is also extremely useful for the development of the EU because it provides a useful window to the outside world and an important service sector in the most strategic position in the world between Europe and the East.”
