Cyprus’ Finance Minister, Makis Keravnos, issued a stark warning Friday, labeling the island’s economic outlook “alarming.”
On CyBC radio, he stressed Cyprus’ service and tourism-dependent economy faces risks amid shifting EU trade dynamics. The EU, he said, is under global economic pressure, challenging trade norms.
Finance Minister Makis Keravnos
“The EU was prepared, but unexpected extremes occurred,” Keravnos stated. “It’s deeply concerning, affecting global trade rules. Major uncertainties are unfolding.”
His comments reflect fears of profound global economic order changes. Recent market shocks fuel concerns about trade agreements, like those backed by the WTO. For Cyprus, reliant on EU trade, the impact could be severe.
“Global trade turmoil puts Cyprus on edge,” Keravnos said. “Existing rules are questioned, creating extreme uncertainty.”
He noted major EU economies, nearing recession, could drag Cyprus down. Stagnation in key partners, like France, poses a direct threat.
“EU’s large economies face recession, impacting Cyprus,” he warned.
Cyprus, with its small, service-based economy, is vulnerable. A European economic downturn could sharply reduce tourism. While some see delayed impact, Keravnos is cautious.
“Initial reactions suggest delayed impact, but prolonged stagnation in major EU economies will affect us,” he said.
Keravnos’ outlook contrasts post-COVID optimism. Global uncertainty worries smaller nations like Cyprus.
“Prepare for the worst, hope for the best,” he urged, calling for rapid adaptation.
Cyprus may need a fundamental economic shift. Tourism may not suffice. The minister urged a robust, flexible approach.
“We must remain resilient,” Keravnos said. “Adaptability is key to Cyprus’ future.”