July / August 2012 / 13 July 2012 / Steve Shaw, Editor, FX-MM
Cyprus has made a considerable effort in recent years to establish itself as an important regional financial centre. Of late, the problems in nearby Greece have begun to impact the island significantly, making for an increasingly uncertain future. In the wake of Cyprus’ recent request for EU/IMF bailout funds, Steve Shaw looks at the benefits on offer to financial firms which establish a presence in Cyprus and considers the island’s future economic prospects.
Cyprus is the easternmost outpost of the European Union and currently the only EU member state with a U.N. peace – keeping force deployed on its territory. This has kept the larger Greek-speaking part of the island separate from the Turkish enclave since a war in 1974. Nicosia, the capital, remains a divided city.
With a population of around one million, and a well-developed infrastructure, Cyprus has an economy which is dominated by tourism and financial services – the island’s services sector contributes around 80% of GDP. Since 1 January 2008 the euro has been the country’s national currency (albeit not in the Turkish administered part of Cyprus, which uses the Turkish lira). The Turkish part of Cyprus is less well developed, and has been handicapped by a lack of private and public investment. (more…)