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Mixed messages for Cyprus economy as Greece ends capital controls

August 28, 2019 at 8:44am
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Greece has fully lifted its remaining capital controls and the messages for the Cyprus economy are mixed, according to analysts who told Phileleftheros that economic ties between the two countries are long-standing and strong. But they have also been tested through the years.

The lifting is a move signalling the Greek economy’s continuing return to stability after the tumult of three international bailouts since 2010.

And Demetris Vakis who heads the Institute of Certified Public Accountants of Cyprus (ICPAC) said: “This development is positive for the economic activity in Greece, since it will allow Greek businesses to use their resources in a more effective way when it comes to their protection and growth.”

As for the impact of this development on the Cyprus economy, Vakis said there are some financial activities going through Cyprus which may partially change.

“Those activities concern movement of capital…But the wider presence of Greek interest companies in Cyprus may increase now that restrictions have been lifted,” he added.

Another analyst said the key word following 50 months of capital restrictions is trust. The lifting is a sign of confidence in the Greek economy which is now expected to attract foreign investors and upgrade its credit ratings.

The return of deposits, not only by individuals but also from companies who preferred to keep funds abroad, is also a must.

Athens imposed capital controls in June 2015, when Greece was embroiled in a dispute with lenders over how to prop up an economy overwhelmed by a mountain of debt and its banks were bleeding cash.

 

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