Finance Minister to Euronews: "Mistakes have been made in the past - We have no close ties with Russia"

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The skepticism, but also the reservations, caused in many EU capitals by the forthcoming sixth package of sanctions against Russia, reveals in his exclusive interview to euronews, the Minister of Finance, Konstantinos Petridis.

“The sixth package (of sanctions) is being discussed at the moment,” he told us. “We started more conservatively, then more sanctions began to be added. There are differing views on several issues. In Cyprus, we have reservations about sanctions related to shipping, the banning of Russian-flagged ships or the transport of Russian gas, there are issues with trusts, the purchase of real estate by Russian citizens. We must also take into account the impact on the European economy. “Sanctions should have at least more impact on Russia than on the European economy itself, because otherwise it is like imposing sanctions on ourselves.”

In particular, regarding the embargo on Russian oil, K. Petridis warns of the consequences:

“The embargo on Russian oil is an issue that must be analyzed and its economic aspect. Russia seems to have alternative sources. Cyprus does not oppose this measure. But we should know that it is a measure, which will lead to a further increase in energy prices, affecting the European economy accordingly. But it is also a matter of principle: the EU can not fund weapons for Putin's current war. “

Petridis:” Mistakes have been made in the past & # 8211; We do not have close ties with Russia “

“I admit that mistakes have been made in the past,” the Cypriot finance minister replied when asked about the general impression that Cyprus has close ties with Russia. “We are talking about decades ago. Many things have been fixed since 2013. Under the strict supervision of the EU, the IMF and the European Investment Bank, very strict regulations have been put in place to combat money laundering. In Cyprus we have closed 70,000-80,000 bank accounts, some of which were opened in other European countries, precisely because of this strict supervision. I believe that there are no close ties that there is a perception that they exist. Okay, there was the naturalization program, which, indeed, with mistakes in management, to put it bluntly, contributed to this perception. This is over. Some passports are recalled where improper naturalizations have been identified. “

Cyprus: Properties of citizens and companies from Russia” frozen “

In Cyprus, a special commission set up under the Ministry of Finance has undertaken the search and seizure of assets of citizens and entities from Russia that are on the list of European sanctions. Although the Cypriot authorities avoid making official announcements, the Deputy Minister of Finance of Cyprus revealed to euronews that asset freezes have already been made:

“At the moment I can not give numbers,” K. Petridis told us. “We are & # 8220; frozen & # 8221; bank accounts, real estate, but also shares of individuals and companies that are on the sanctions list. Relevant announcements may be made in the future. There is a false impression that we are very exposed to the Russian factor. For example, there was an impression that the banking system of Cyprus is very exposed to Russia. But deposits from Russian entities account for only 3.8% of total deposits. Before 2012, it was about 60% of the total. Our exposure for bank loans is 0.8%. Cyprus does not hold any reserves of the Central Bank of Russia. As far as Russian investments in Cyprus are concerned, there do not seem to be any investments by companies that fall on the sanctions list. In Cyprus, indeed, we have a Russian community, which for many years has chosen to operate with healthy businesses in Cyprus, as some did in Greece, because Cyprus is an EU country with a flexible business environment. These investments are not affected, except perhaps to a very small degree when there is some influence when doing business with some Russian companies. “Most of those operating in Cyprus trade with the EU and are not on the sanctions list.”

Cyprus: Extending life expectancy for natural gas

One solution to addressing the energy crisis affecting households and businesses across Europe immediately is to extend the life of fossil fuels, something that would require an EU decision to modify energy transition timetables.

“I personally am in favor of a more gradual adjustment, given the evolution of the geopolitical situation,” said the Minister of Finance of Cyprus. “At the moment there is no intention on the part of Brussels to revise the energy transition plan. “On the contrary, there is a need to speed up the recovery from fossil fuels, especially from Russia, which is logical.”

The fate of the EastMed pipeline will depend on the relevant EU decisions.

“Everything depends on economic viability,” explains K. Petridis. “Now with rising prices, economic viability seems more likely. Especially if geopolitical reasons are taken into account, which also concern the countries through which the pipeline will pass, so that they are not so vulnerable or become hostages of geopolitical developments. “But this also contradicts the policy of green transition, which does not give much depth to the development of deposits,” he added.

At the same time, various RES development programs are “running” in Cyprus, with incentives for households and businesses to adopt green energy. However, K. Petridis clarifies that these projects will not yield immediate results:

“RES penetration policies will not yield the next day. It will take some years, given the effectiveness of existing technologies. Therefore, we must be prepared that the coming years will be difficult “, he stressed.

Horizontal measures for inflation

The government of Cyprus has taken a a series of measures to support households and businesses against inflation.

“We are one of the few countries that have taken horizontal measures because we believe that inflation is something that affects everyone, especially the middle class,” explained the Minister of Finance of Cyprus.

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