13 June 2014
In an interview to the Cyprus News Agency (CNA) the newly elected Chairman of OEB Mr Christos Michaelides calls for acceleration of loan restructuring, urging those who can repay their loans to do so.
Chairman of the Cyprus Employers and Industrialists Federation (OEB) Christos Michaelides has urged those who can pay their loans, to do so without any further delay and called on the banks to accelerate the restructuring process of viable loans and do whatever they can to recover debts from whoever fails to repay their loans.In an interview with the Cyprus News Agency Michaelides notes that the problem of non performing loans (NPLs) would have been smaller, had Cyprus adopted the same definition as in other European countries.
OEB Chairman stresses that economic recovery and the solving social problems created by the economic crisis will eventually start from the businesses and therefore high priority should be given in ensuring their sustainability, creating new businesses and formulating an environment for business development.
He says that OEB focuses its efforts on three pillars:
1. Restart the economy and create conditions for growth, jobs and prosperity,
2. Reconstruct the forces of the economy, focusing on private initiative, along with redesigning Cyprus` economic model, attracting investments, accelerating privatisations and consolidating the banking system,
3. Promote innovative practices, incentives and effective measures for the enterprises to survive and develop.
“Strengthening entrepreneurship, helping Cypriot businesses to take over projects abroad and attracting investments, particularly foreign ones, will boost liquidity and alleviate problems caused by the economic crisis. To revive entrepreneurship we believe that the state`s contribution must be significant to support businesses by reducing bureaucracy and provide incentives for innovative and imaginative practices” Michaelides says.
He notes that by facilitating Cypriot businesses to take over construction projects or parts of them, abroad, will generate significant revenue for the economy and many job positions for Cypriots and he calls on the Ministry of Commerce to provide practical contribution toward that direction.
“The promotion of exports of goods and services can be done with the practical help of the Commerce Ministry and our ambassadors abroad” he says.
“We believe that the gradual loosening and lifting of restrictive measures (on capital flows) and the continuous upgrades of the economy`s creditworthiness will contribute positively towards enhancing Cyprus` credibility, which is very important for investors. We hope that the Government`s efforts to attract investors will soon yield results” he adds.
Michaelides stresses that external funding is necessary to support investments, including the upgrading and expansion of infrastructure to support private sector initiatives in fields such as renewable energy, natural gas and various forms of tourism.
“Many companies face serious financial problems and use all their forces to remain in the market” he says, noting that “is very important to utilise in a proper manner the European Bank on Reconstruction and Development, which will allocate funds to the private sector”.
He says that there is a “wide availability of young people with high educational qualifications, which paves the way to strengthen youth entrepreneurship, based on research and innovation. He sees “tremendous growth prospects” in the energy sector and opportunities for job creation in further developing various forms of tourism, such as religious, medical, sports and conference tourism.
The Chairman of OEB says that “lending is perhaps the biggest problem faced by the banking sector, in particular the NPLs”.
“We have repeatedly stressed that those who can repay their loans, must do so without any further delay. The banks must move at a faster pace regarding the restructuring of viable loans and do whatever they can to collect from debtors who fail to repay their loans” he says, adding that “it is important to hold an honest dialogue between the banks and the enterprises as the banks` ultimate goal is not to close down businesses but render them viable so as to recover the debts”.
“The problem would have not been so big, if the definition of the NPLs was not the one we have today. Had we applied the same definition as the majority of European countries, things would have been much better, both for the banks and the borrowers”, he notes.
Michaelides points out that OEB supports all measures to encourage the employment of Cypriots, provided that they are applied on a voluntary basis and do not violate the acquis communautaire. “We must keep in mind that we are a member state of the EU where employment discriminations are prohibited and we must not act contrary to our country`s interests” he says, replying to a question on the employment of workers from other EU countries. Especially for the hotels industry, he notes that “a large part of tourists (who visit Cyprus) do not speak Greek and there are hotels fully booked by foreign visitors for the entire (tourist) season”.
He expresses the view that combating undeclared work is a sole responsibility of the state.
The liberalisation of shop opening hours is a successful measure, as it “has created thousands of new jobs” OEB President says, describing as “excessive and unjustified” the reactions occurred by the small and medium sized enterprises organisation, POVEK, against the implementation of the measure.
Michaelides notes that “despite all efforts to fight bureaucracy, the problem remains serious and constitutes a major obstacle for the businesses”. Positive steps have certainly been taken but the economic crisis should have push for radical decisions, he says, adding that hopefully a new Commissioner for Public Service Reform will take over very soon to carry out the modernisation of the public sector.
Source: Cyprus News Agency