Gold Magazine April - May 2013, Issue 25 | Página 32

COVER STORY

YES
XXX
WE
CAN

A New Start for Cyprus?
THE BAILOUT HAS HARMED THE COUNTRY AND ITS
FINANCIAL SECTOR BUT THEY WILL ULTIMATELY
EMERGE STRONGER

T

here always comes
a time when unresolved negligence
and mistakes that
accumulate over years
of inaction catch up
and inevitably create an explosive situation that cannot be
easily corrected. The Cyprus crisis is no
exception. However, every crisis is a passing phenomenon, so long as the right steps
are taken to ease the pressures
and, slowly but surely,
rectify the situation.
Recent events
in Cyprus over
the past few
weeks, especially the
resolution
of Laiki
Bank
and the
restructuring
of Bank
of Cyprus,
have dealt a
serious blow to
the professional
services sector.
The final agreement poses
great difficulties for the
industry and
it has brought
harm both to
the country
and the finanBy Olga
cial sector.
Rybalkina Had certain
economic
issues been

addressed earlier, it is very likely that they
could have been handled with less pain and
this situation could have been avoided. But
there is no point in dwelling on the ‘what
ifs’; the banking sector is now undergoing what I call essential “surgery”. This
“surgery” will restore its health and give it
strength. The reaction to the 2.5% increase
in the corporate tax rate was fuelled by the
uncertainty which was felt by everyone
but, in essence, it is not such a significant
increase and should not affect the financial sector at all. Very few other European
countries offer a lower corporate tax rate
than Cyprus, or even the same one; in fact,
the majority have a higher rate.
To deal with the recent events on the
island, the Cyprus government will have to
undertake an enormous an