Cyprus News Agency: News in English (PM), 98-06-05

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From: The Cyprus News Agency at <http://www.cyna.org.cy>

CONTENTS

[01] Government determined to maintain offshore sector

[02] EU officials meet Vassiliou

[03] Cyprus Stock Exchange

[04] Government welcomes Greco-Turkish statement

[05] Government appeal to Turkey

[06] EU official meets Finance Minister

1525:CYPPRESS:01

[01] Government determined to maintain offshore sector

Cyprus' policy regarding the offshore sector during the EU accession negotiations was presented by Minister of Finance, Christodoulos Christodoulou and the head of the island's negotiating team with the European Union (EU) George Vassiliou.

They were speaking at the one-day Conference "The Cyprus Offshore Sector at the Crossroads: Prospects and Policy Options", taking place in Nicosia today.

The offshore sector is so important for Cyprus that the government puts it "on the top of the priority list of issues" to be negotiated with the EU, Christodoulou said.

Listing the island's comparative advantages, Christodoulou referred to its favourable entrepreneurial climate, the high educational level of its labour force, the island's strategic geographical position, its relatively high quality of life, good infrastructure, and its legal, accounting and banking system.

These factors, together with its preferential tax regime for offshore activities and the double-tax agreements with a number of countries, "have contributed to the transformation of Cyprus into a reputable international offshore centre", he noted.

The offshore sector currently employs directly about 1,5 per cent of the island's labour force, while foreign exchange revenue from offshore activities amounted in 1997 to around 180 million pounds (one Cyprus pound is equal to 1,9 US dollars).

The offshore sector also contributes also to upgrading the skills of the island's labour force, facilitates the transfer of know-how and has positive effects on tourism, Christodoulou pointed out.

Referring to the concern expressed regarding the sector's future after Cyprus' EU accession, he assured that the maintenance of the existing offshore regime "will be a top priority in the context of the accession negotiations".

On his part, Vassiliou stressed his confidence that "there is a future for the offshore sector in Cyprus", adding that, given the island's poor natural resources, "its future lies with the development of services".

Cyprus' ambition is to become EU's gateway to East Europe and the Middle East, he said, noting that goal is achievable.

Referring to the role of offshore sector, he said it "has put Cyprus on the map", as many people worldwide know the island only because of the offshore companies operating here.

"In my opinion the offshore sector is more than important to Cyprus; it is indispensable", he added.

Vassiliou described the concern regarding the sector's future in Cyprus after EU accession as "understandable but not justified".

He explained that there are ways to maintain the offshore status on the island, adding that for certain issues such as the "tax differentiation", the government could secure transitional periods.

Since the introduction of fiscal incentives for offshore companies in 1975, more than 27.000 permits have been issued by the Central Bank of Cyprus for registration of such companies.

About 1.100 offshore enterprises currently have offices on the island, employing 3.000 expatriates and 2.100 Cypriots.

CNA GG/MCH/1998

ENDS, CYPRUS NEWS AGENCY

1610:CYPPRESS:02

[02] EU officials meet Vassiliou

Speaking after a meeting with the head of the Cyprus negotiating team, George Vassiliou, Director General of the European Commission's Task Force for accession negotiations, Nikolaus van der Pas said he expected free movement of goods would raise some difficulties.

"That is the first issue I expect, not only for Cyprus but for all the (applicant) countries, some difficulties to be raised."

Van der Pas, who is accompanied by the Task Forces' negotiator for Cyprus, Leopold Maurer, added that later on difficult issues such as agriculture and the environment will also be looked into.

"I have the impression that Cyprus is determined to make quick progress and we will be as supportive as we can" the EU official said.

Describing the meeting with Vassiliou as "very good", Van der Pas pointed out that it "is important to see eye to eye on the way in which we proceed in the preparation of the negotiation which are to come".

On his part, Vassiliou said he had a very good meeting with Nikolaus van der Pas and Leopold Maurer.

"We were able to look at some practical issues, concerning the accession of Cyprus into the EU", Vassiliou said.

He also expressed his thanks to Van der Pas "for the support we have from the Commission and the excellent work that the Commission is doing during this screening process".

CNA/AA/MCH/1998

ENDS, CYPRUS NEWS AGENCY

1710:CYPPRESS:03

[03] Cyprus Stock Exchange

   CSE General Index                          85.05 ( 0.95)

   Traded Value            CYP 1,274,740

   Sectural Indices

   Banks                   CYP   626,095      99.07 ( 0.84)
   Approved Investment
   Companies               CYP    29,883      61.66 ( 1.28)
   Insurance Companies     CYP   100,580      62.73 ( 0.67)
   Manufacturing Companies CYP    42,949      76.56 ( 1.14)
   Tourism Companies       CYP    38,107      67.80 ( 1.91)
   Trading Companies       CYP   108,853      46.33 ( 0.22)
   Other Companies         CYP   115,492      71.08 ( 1.82)

CNA MCH/1998

ENDS, CYPRUS NEWS AGENCY

1740:CYPPRESS:04

[04] Government welcomes Greco-Turkish statement

The government noted however that the Turkish side must give evidence of its political will to iron out its relations with Greece.

"We consider the reaffirmation of the 1988 memorandum of understanding as a positive event. Any move to ease tensions in the Aegean creates a positive climate for developments in Cyprus," Government Spokesman, Christos Stylianides, said here today.

The spokesman said the Cyprus question is not linked to this agreement. "The Turkish side still has to prove its political will to smooth out Greco-Turkish relations", Stylianides said.

A statement by NATO Secretary-General Javier Solana announced yesterday in Brussels that Greece and Turkey intend to "implement fully the agreements reached in 1988" in which they recognise the obligation to respect the sovereignty and territorial integrity of each other and their rights to use the high seas and international air space of the Aegean.

The statement, Solana added, is "a manifestation of the political will of the two governments to continue to respect these principles and to carry out in good faith the range of confidence building measures that have been agreed as well as those that may further be agreed" in talks between Solana and the two countries.

The two sides also declared their willingness to continue their talks to clarify where necessary and to strengthen and complement where possible the set of confidence building measures which the 1988 agreements provide for.

CNA RG/MM/1998

ENDS, CYPRUS NEWS AGENCY

1825:CYPPRESS:05

[05] Government appeal to Turkey

"Turkey should not expect something from the European Union summit in Cardiff to demonstrate its intention to show some kind of shift in its position on the Cyprus question," the Spokesman said.

He said the Cyprus problem is an issue which Turkey must see through the international norms and must disengage it from any other developments that relate to its own strategic goals.

Stylianides said the government will await the Cardiff conclusions before it comments on the forthcoming summit.

Replying to questions, he said the EU considers Cyprus' accession course independent of efforts to settle the Cyprus problem.

The Spokesman announced that the National Council will meet on Tuesday to exchange views about future moves on the Cyprus question.

CNA MK/MM/MCH/1998

ENDS, CYPRUS NEWS AGENCY

2010:CYPPRESS:06

[06] EU official meets Finance Minister

Speaking after a meeting with Finance Minister, Christodoulos Christodoulou, Director General of the European Commission Task Force, Nikolaus Van der Pas, said at this point no precise answer concerning the issue of economic assistance to Cyprus could be made.

"I know the issue is being discussed, we will carry the messages which we have received here to Brussels and see with our colleagues what can be done about this", he added.

The EU official pointed out, however, that one should "be careful with comparisons with the assistance that was given to the Eastern European countries".

He explained that "the assistance for the Eastern European countries was created very specifically after the fall of communism, in the light of the enormous needs that existed. At that time there was no such need for Cyprus", he added.

Van der Pas said he has the impression that "there is great determination among the Cypriot authorities and especially the Finance Minister to make sure that those criteria (necessary for EU accession) will be fulfilled".

He pointed out that "one of the criteria for accession is to be able to stand the competition within an internal market and that means to correspond and fulfill a number of economic criteria".

Van der Pas added that Christodoulou convinced them "with many interesting figures that a lot of effort is being made in order to fulfill the criteria which EU member states apply for qualification for a single currency".

On his part, Christodoulou described the meeting as "very interesting" and said there was special reference to pre-accession assistance, both technical and economic, offered to applicant countries.

"We put forward once again the issue of economic assistance", he added. Christodoulou also said they exchanged views concerning the field of offshore companies.

"I pointed out that offshore companies are a matter of priority to us and explained that their status has to be maintained or any reforms introduced should not alter its character", Christodoulou said.

The Finance Minister stressed that the Cyprus economy fulfills the preconditions for accession to the EU.

CNA MCH/RG/1998

ENDS, CYPRUS NEWS AGENCY

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