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Cyprus economy may shrink by 40 percent – opinion

March 27, 2013, 1:12 UTC+3

Sofocleous said what happens in Cyprus presently means its fiasco as a financial services center

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NICOSIA, March 27 (Itar-Tass) – The Cyprus economy may shrink by 40 percent as a result of the measures coordinated by the Cyprus government and international creditors for restructuring the country’s leading banks and averting default. Chrisis Sofocleous, partner with Andreas Sofocleous law firm, a major law firm in Cyprus, told ltar-Tass.

He said what happens in Cyprus presently means its fiasco as a financial services center. It is precisely the services, mostly financial services that account for some 70 percent of the country’s GDP and are the main source of the state’s revenues.

Sofocleous said he does not see how the state is going to make payments for the loans to Europe and the IMF. He remarked that the Troika would be back in Cyprus in three months and would ask about the money.

Sofocleous believes the only way out for Cyprus is to quit the eurozone as soon as possible and to get rid of dependence on the Troika. Then it may be attempted to regain confidence of foreign investors in Cyprus as a financial center, Sofocleous said. He believes the resumption of the national currency use would make it possible to increase cash circulation for economic development. If the authorities refrain from steps to withdraw from the eurozone, there will be no way of Cyprus recovering. It will become a hostage of Europe, mainly of Germany, which will lead to the loss of the country’s mineral resources, Sofocleous said.

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