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EU accession created important opportunities-challenges,says minister
2005-05-03 15:17:38

by Gregoris Savva

Nicosia, May 3 (CNA)--Cyprus' accession to the European Union has brought about important changes as well as major challenges for the local economy and the business world, Cypriot Commerce, Industry and Tourism Minister George Lillikas has said.

In an interview with CNA to mark one year since accession, Lillikas called on Cypriot businesspeople to end its ''inward-looking policy'' and ''launch an attack'' to find partners in Europe and elsewhere to exploit Cyprus' central position in the region.

According to the Minister, efforts to promote Cyprus as a regional business hub have borne fruit since one of the largest global shipping companies is in consultations with the Cyprus Ports Authority to use the island as a transit station, something which is expected to double the capacity of Limassol port, on the south-eastern coast.

Lillikas said that no department at his Ministry has remained unchanged since accession, adding that before May 1, 2004, when Cyprus joined the EU, some departments were barely kept in existence, whereas now they have a pivotal role to play.

One of the departments that has received a new boost is the division dealing with energy matters, both because of accession but also due to the continuing rise in the price of oil globally.

The EU, Lillikas explained, demands that member states reduce their dependency on oil imports and the ministry aims at increasing the use of natural gas to replace of crude oil for the production of electricity.

He said Cyprus is obliged to establish by 2008 an Energy Centre where the Electricity Authority will use natural gas to produce electricity. The Energy Centre will also include a station to liquidate natural gas imported from countries of the Middle East.

''We will be ready by 2008. We can meet the deadline and we will not deviate from these timeframes,'' he noted, adding that the liberalisation of the electricity sector, an EU obligation in compliance with the acquis communautaire, has provoked the interest of private firms to produce electricity and also to import gas to Cyprus.

One of the main challenges the Energy Department has to tackle is the Renewable Energy Sources programme for which the Ministry has produced the National Action Plan 2002-2010. This envisages that by 2010 Renewable Sources would contribute some nine per cent to Cyprus' total energy production.

Lillikas said the EU does not provide subsidies for such programmes, adding that he intends to point out the need for the creation of a European fund to finance national Renewable Energy Plans.

''This could assist the European economy to save resources and to rid the Union of oil dependency,'' he added.

Regarding trade and commerce, Lillikas said that EU membership has terminated Cyprus' long-standing policy of protection policy to private firms and especially imports, something which has caused some adverse reaction from various quarters.

''If Cypriot businesspeople exploit Cyprus' central position in the region, there will be significant advantages both for local business and the economy,'' Lillikas added.

Referring to trade between the Greek and Turkish Cypriot communities, Lillikas said that with the introduction of the Green Line Regulation, trade between Greek and Turkish Cypriots was rather limited in December 2004 but by June last year it had increased to 130.00 Cyprus pounds.

Trade, he pointed out, was one-way, from the southern government-controlled areas to the northern Turkish-occupied part of the island because the illegal Turkish Cypriot regime did not allow Greek Cypriots to trade their produce in the north.

''We believe that trade between the two communities and two-way trade will generate common interests which could help to create the necessary favourable climate for the solution of the Cyprus problem,'' Lillikas added.

As regards trade with Turkey, an EU candidate, Lillikas noted that the interest shown by Turkish businessmen to cooperate with Cyprus is faced with Ankara's policy of non-recognition of the Republic of Cyprus.

Turkey does not allow Cypriot-flagged vessels to approach its ports nor does it give access to its air corridors to airlines with Cypriot interests at stake.

Responding to questions, Lillikas said one of the major challenges the ministry has to deal with is the reform of the local economy and the industrial sector.

''Cypriot products are no match to the products coming from giant states like China in terms of competitiveness, so we must give emphasis on quality,'' Lillikas added, noting that this challenge will be met by Cyprus' new industrial policy, that incorporates the promotion of high technology industry.

''The challenges come from our policy to transform Cyprus into a regional research centre and to seek cooperation with neighbouring countries and other friendly states which have tradition in this field,'' he said.

The minister said agreements reached with universities abroad and the goal to create the island's first technological park are ''decisively significant'' as they will give the local economy a new impetus within the next twenty years.

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