EUROPEAN Commission President Jose Manuel Barroso has welcomed Cyprus to the euro area of 15 EU countries, stretching from the Mediterranean to the Artic Circle.
In a written statement on the occasion of the currency’s adoption, Barroso said the arrival of the euro marks a new chapter of Cypriot history.
“This momentous step will bring Cyprus to the very heart of the European Union. It means that Cyprus has joined a world class currency and a powerful economic area of nearly 320 million citizens, with an almost 15 per cent share of world GDP,” he said.
For Cyprus, the Commission President noted, the economic benefits of the euro will be substantial. The solid credibility brought by the euro should give a healthy boost to foreign direct investment while the disappearance of exchange rate risks and transaction costs will make Cyprus a more attractive trading partner and be very beneficial for business.
For Cyprus, this represents a significant advantage as more than half of Cypriot trade in goods is with euro area members. Trade in services with the euro area accounts for around 30 per cent of the total.
Like all other EU Member States, Barroso added, Cyprus is at the moment facing rising energy and commodity prices.
“In the long term, Cyprus’ adoption of the euro will, as well as helping create growth and jobs, ensure that low inflation can be preserved and anchored in a sustainable manner. This will, of course, also require the right economic policies, including a sound budgetary policy and the promotion of open competitive markets.”
The Commission President pointed out that joining the euro area also offers significant political benefits. “It will give Cyprus a greater say in international financial institutions and fora and greater sway within the European Union. Cyprus will also gain membership of the Eurogroup at a time when the euro area finance ministers’ group is exerting a growing influence over the direction of EU economic policy.”
He said these are not the only benefits that Cyprus can look forward to. Cypriots can now travel more easily within the euro area without the hassle of changing currencies and paying fees every time they cross a border, and are better able to compare prices since they can use their own currency anywhere in the euro area. Travelling outside the euro area is also easier since the euro is an international currency and therefore widely accepted in many places outside the euro area, particularly in tourist destinations.
“The euro is a symbol of our common identity, shared values and the success of European integration in bringing the peoples and nations of Europe together. It acts as a stimulus to further integration by showing that common action by Member States can bring widespread benefits to all those who take part. The whole of Europe is pleased that Cyprus is now firmly part of all of this too,” Barroso added.
Meanwhile, European Commissioner for Economic and Monetary Affairs Joaquin Almunia has said that with the euro’s adoption, Cyprus has become even more integrated in the heart of the European Union, less than four years after it joined the EU.
“This is thanks to the stability-orientated economic policies pursued by Cyprus, which I hope will continue after it adopts the euro,” Almunia said.
He encouraged the Cypriot people “to embrace our shared currency with confidence because they are entering a monetary union that has proven its worth in terms of price stability and low interest rates.”
President Barroso and Commissioner Almunia will be in Nicosia on January 18 for ‘Euro Day’, a special ceremony to celebrate the adoption of the euro at the Nicosia Municipal Theatre.
