Gold Magazine November - December 2013, Issue 32 | Page 38

OPINION

THE HARMFUL AND POINTLESS
DISCUSSION ABOUT WHETHER
TO KEEP THE EURO OR
ABANDON IT HAS TO STOP
most of Cyprus’ debt (including the loan
from Russia, government bonds issued
abroad, liquidity from the European Central Bank) is in euros and even if we were
to return to the Cyprus pound, it would
have to be repaid in euros. In other words,
it would increase in direct proportion to
the amount by which the national currency was devalued.
It is time that the political parties and
the media stressed clearly that there is,
there was and there can be no question
of giving up the euro. The euro and the
European Union are fully intertwined.
Perhaps because people recognise the
importance and the necessity of the EU,
especially in today’s conditions of globalisation, we hear them saying “We don’t
want to leave the EU, only the eurozone.”
They are ignoring, or they want to ignore,
the reality of the situation.
The Treaties do not provide for the possibility of a country leaving the eurozone.
Press spokespersons for the European
Commission have noted in the past that
a country’s exit from the eurozone is not
possible. According to a European Central
Bank working paper presented in December 2009, the withdrawal of a Member
State from the Economic and Monetary
Union without a parallel withdrawal from
the EU is “legally inconceivable”, suggesting that fo r a country to withdraw from
the EMU it must also withdraw from the
EU, in accordance with Article 50 of the
Treaty of Lisbon.
It has also been stated that the Vienna
Convention allows us the possibility of
leaving the eurozone. However attractive
this argument may sound, it has nothing
to do with reality and it is not by chance
that no precedent exists of a member state
attempting to do this.
Finally, I would like to stress that the
lack of a provision in the Treaties for a
withdrawal from the euro is no accident.
Economic and Monetary Union are the
foundation stones of the European edifice
and ultimately all member states (with
the exception of Denmark and the UK)

should join the EMU in a process which,
as has been noted any number of times at
the highest level, is irreversible. I hope that
there will be an end to all the talk about
this matter, which is causing enormous
harm to the banking system. Our continuing presence in the eurozone guarantees
the stability of the currency and a lack of
inflation, it contributes significantly to the
development of financial transactions and
forms the basis on which the services sector operates.

(B) THE NEED FOR FAITH
AND A SPEEDY IMPLEMENTATION OF THE MoU

When, in 2011 and 2012, I made a
point of stressing that, if we did not secure
the timely implementation of all the provisions set out by the European Commission for the member states, we risked losing our credibility and we would be considered as behaving like Greece – which
said one thing, voted for another and
did something else altogether – I was accused of exaggerating by people who said
that we ran no such risk. Unfortunately
I was proven correct. We were obliged to
request assistance, the Memorandum was
agreed on, voted unanimously and is now
in the process of being implemented.
I am satisfied by the fact that the
Troika’s first report has been positive.
After the shock of March, all services have
worked hard and the prime target has
been achieved. A simple reading of the
MoU, however, is enough to persuade
anyone that the deadlines are extremely

IF WE WISH TO EXIT
THE MoU, WE MUST BE
COMMITTED
TO IMPLEMENTING
IT TO THE LETTER

tight. The goals of the 3rd and 4th quarters
of 2013 are more difficult to reach than
they were for the first assessment of the
2nd quarter. Precisely for this reason there
is no room for disputing the terms of the
Memorandum. Unfortunately, however,
the demagogues continue and voices are
heard questioning key conditions of the
MoU. Who has not heard statements
such as “We shall not sell off our national
wealth”, suggesting a willingness to avoid
the privatisation of semi-government organisations when the surest way of selling
them off is to keep them in state ownership.
The MoU clarifies that by the 3rd quarter of 2013, the governance of semi-government organisations must be strengthened and a privatisation programme must
be completed by November 2013. In
order to achieve these aims, the Government needs to proceed immediately with
the issuing of shares in semi-government
organisations and the appointment of
Boards and Management teams with the
objective of maximising results and, with
the help of foreign experts, it must subsequently examine the possibility of finding
strategic investors.
A second example of how demanding
and difficult it will be to implement the
goals of the MoU concerns the National
Health Scheme which must be up and
running by the end of 2015. Bearing in
mind my own experience of the difficulties and reactions I faced when, in 1989,
I decided to implement the scheme, I
am extremely concerned about the likely
developments. It is enough to mention
that, in March 2012, a new Scheme had
finally been drawn up and approved by all
the political parties and was subsequently
included in the Memorandum. Nonetheless, progress since then has been minimal.
All of the above indicate how difficult
things are.
Only if the President of the Republic
personally undertakes to implement the
privatisation plan and the National Health
Scheme can we hope that their objectives
will be achieved. If we wish to exit the
MoU, we must be committed to implementing it to the letter. We must persuade
the world that we are not simply preparing
strategic plans and studies. We must not
only fulfil all the provisions but go ahead
wherever possible even faster than we are
required to. Only then will we not require
the supervision of the Troika; only then
will we regain the lost trust and esteem
of the EU and secure the ability to attract
new and necessary investments.

Info: George Vassiliou was President of the Republic of Cyprus from 1988-1993.

38 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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