The CEB stands ready to financially support a solution of the Cyprus problem

The CEB stands ready to financially support a solution of the Cyprus problem

We stand ready to support the country in case of reunification and to make reunification really a success, the Governor of the Council of Europe Development Bank (CEB), Mr Rolf Wenzel, stressed today, during a press conference, at the Ministry of Finance, on the occasion of the annual meeting of the CEB, to take place in Cyprus, on 15-17 June.

Speaking to the media, Mr Wenzel thanked the Government of Cyprus for hosting the annual meeting of the Bank.

Founded in 1956 by eight countries (Belgium, France, Germany, Greece, Iceland, Italy, Luxembourg and Turkey), the CEB has now 41 member countries. Cyprus joined the CEB in 1962. The Bank finances social projects, which provide, inter alia, affordable housing to low-income families, revitalize urban and rural areas, address the consequences of natural and ecological disasters, support job creation and preservation, and facilitate the integration of migrants and refugees.

Since Cyprus became a member of the institution, the Bank has been very active in the island by supporting with its financial means projects on the island. Mr Wenzel referred to the 2.5 billion euro loans to support social projects in Cyprus.

“Our mandate is to support projects that have a social value and this makes us different from the EBRD and the EIB. We are Social Development Bank and we are financing social development projects”, he highlighted. Mr Wenzel made special reference to the signing, on Saturday, 17 June 2017, of the first release of the loan for the extension and modernization of the University of Cyprus, being the first and for many years the only financial institution to support the University of Cyprus. Its social mandate distinguishes the CEB from the other European financial institutions. Its aim is to finance and support social cohesion in Europe and within European countries. The CEB only lends to European countries and only European countries can become member.

He further referred to the efforts for reaching a settlement to the Cyprus problem, underlining that the CEB has been and will continue to monitor the ongoing talks on the reunification of the island. “I think that if that happens it will be very positive development for the communities of the island. I expressed again to the Government officials and the politicians in Cyprus that we stand ready to support the country in case of reunification and to make reunification really a success. Despite all the costs that might be involved, I think we all agree that the positive benefits are clearly much higher from the reunification”, he stressed.

Moreover, speaking about the social projects the Bank is financing, Mr Wenzel said that the aim is to strengthen social cohesion among European countries at a time of high unemployment and migration.

Asked whether he held meetings with stakeholders in Cyprus to discuss the financing of a potential solution of the Cyprus problem by the CEB, Mr Wenzel said that he has done so. “I met, for example, with the Mayor of Nicosia; we are financing projects in the city center, to finance the renovation of some buildings, pavements, rain water drainage systems. I also met with the Rector of the University of Nicosia to discuss new projects we could finance. We also discussed the financing of a number of projects in cities related to tourism. We are supporting the tourism sector, which is very important for the Cyprus economy, by providing access to water treatment facilities and we will continue with these projects. Our shareholders will visit some of these projects and discuss with our partners on how they value and assess the use of our support to them.

I just met and we will continue to meet with Government officials. We have a member of the Ministry of Finance in our Administrative Council, where we discuss strategies. We have people in our staff, a country manager, who particularly visits the country and talks to the people in Cyprus to identify with the locals here new projects that we could finance. We are very open to discuss new projects we could finance here in Cyprus, hopefully sometime in the not so distant future, in a reunified Cyprus”.

Invited to say if he had any specific discussions about financing a solution in Cyprus and whether the CEB has prepared any reports or estimates regarding the cost and the benefits of the solution, the Governor of the CEB underlined that the CEB’s manager for Cyprus has held discussions on what else could be done in some of the regions and the Municipalities in Cyprus once the current projects have been implemented. He added that “it is an ongoing discussion also with our colleagues and partners in the EBRD on what we can do together. As I mentioned the water treatment facility is what we are financing in Limassol and Paphos. There might be more needed in these areas. We are also talking about the University; we have still one ongoing project in the field of education. We are constantly discussing with the Government and the Municipalities to identify what else we can do.

We are financing projects and this is important: We are not financing budget. We are financing very concrete projects. So it is not just giving the money to finance projects and then each country does whatever it wants to do with that money. We are financing concrete projects and especially social projects.

There was a meeting a couple of weeks ago initiated by EBRD, which brought together the international community and international financial institutions. Of course, the EBRD and the World Bank, the EU Commission, were represented. I was attending the meeting, just to discuss what kind of demands could fall on the international community, on the country and the Government of Cyprus in case of reunification. Obviously, you will have to make a very thorough analysis of the needs in the two communities in the country, leaving of course the Property issue, which is a very delegate and sensitive issue, and I am not party of any discussion on this. But leaving that point aside, there was a consensus emerging from that discussion. The immediate costs and benefits, like infrastructure investment were not very high when you look at numbers, but the benefits for tourism, investments coming to the island, I think this is clear of what the international community is looking forward, waiting to come back to Cyprus with investments in Famagusta for example, in the tourism sector, at a time when Cyprus is experiencing a boom of tourism. The number of arrivals is very high. The good news would be better if we see these investments coming to the island, private investment but also support from the international financial institutions. It is not only us, but everybody is ready to come and finance projects. But we need to have a better understanding of what is needed. It is a matter of question on what the local communities actually want; we are not imposing anything. There was a clear consensus that if you make up a cost benefit analysis, the benefits are much higher than the costs”./IBNA