The Cypriot economy may experience strong shocks in the aftermath of the Russian-Ukrainian crisis, which are not limited only to the tourism aspect, as “P” presented yesterday, but also extend to the financial sector, such as banks. Market people who spoke to the newspaper expressed their concern about the imposition of strong European sanctions on banks and companies of Russian interests, several of which are in Cyprus. It is noted that the Cypriot banks do not have direct exposure to Russia, but the scope of Russia-Cyprus economic relations is such that any pressure on the Russian economy and Russian business will have an impact on Cyprus as well. Therefore, yesterday's decision of the EU to cut off Russia's access to the EU financial markets undoubtedly puts pressure on the Cypriot economy as well.
Indicatively, based on recent data of the Central Bank of Cyprus for Foreign Direct Investment (FDI), the stock of incoming FDI, ie the money that entered the country, reached 388.814 billion euros in 2020, of which 101.962 billion. euros come from Russia. At the same time, the stock of outgoing FDI reached 399.313 billion euros, of which 134.422 billion euros went to Russia. It is understood that Cyprus, as a financial center, operates as a bridge for investments and this bridge will be severely damaged in the event of sanctions which will directly or indirectly affect Russia's economic interests. However, everything will depend on what exactly the sanctions are, which persons are affected and which operations in Cyprus.
In a communication of “P” with the president of the Association of Chartered Accountants of Cyprus (SELK), Pierre Markou told us that there are certainly concerns regarding the financial sanctions against Russia and depending on the scope of these sanctions will depend on their impact on the Cypriot economy. As Mr. Markou explained, it is not only the services sector that will be affected but also similar sectors that contribute a lot to the economic activity of the place. The statements of a competent source of the Ministry of Tourism were on the same wavelength, stating to KYPE that it is not only the tourism sector in Cyprus that will be affected but also various sectors. “Various sectors of the economy, and not just the tourism sector, may be affected, depending on the sanctions to be decided and the duration of those sanctions,” the source said.
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