Around €140 million from loans approved for projects in Cyprus have not yet been released due to delays caused by the economic recession, said Governor of the Council of Europe Development Bank (CEB), Rolf Wenzel in an interview with Cyprus News Agency (CNA).
The Governor who said that he was impressed from the briefing he had from the Central Bank of Cyprus and by the improvement of all the economic indicators, noted that “now is time to look at the projects that have been approved by our boards and the bank and to move forward to the disbursement”.
“We have altogether about €140 million awaiting disbursement. So we have seen unfortunately that the crisis led to some delays in project implementation, understandably though because the country was busy addressing the macroeconomic issues…”, he said. He added that now that is time for the projects to proceed since the economy is registering economic growth again.
He also pointed out that the bank is in constant touch with Cyprus` representatives to see what they could do to make progress on some of the projects.
“We didn`t stop our cooperation when the crisis started in 2013, on the contrary we continued to work very closely, we continued to work on the projects that were there. We agreed and we discussed downsizing some of the projects but we didn`t do that”, he said. He added that they have agreed with the Cypriot authorities to wait for the economy to improved.
“ So that means that some of the projects were extended”, he said.
Wenzel also said that he had seen and heard some ideas for financing new projects in the future and that he had discussions at the most senior level with the government representatives of the country.
“My visit here is a signal of our trust and confidence and we are grateful for the strong commitment that Cyprus has shown to the bank in a difficult time for the country. Cyprus always met its obligations to the bank”, he said.
He added that he was very positive about Cyprus, the improvement of its macroeconomic situation and the future cooperation with CEB.
Cyprus joined the bank since 1962 and since then had received loans of about €2 billion. CEB has financed projects for tourism, water sewage facilities, schools, villages and communities in Cyprus. It also grand a loan to the University of Cyprus of 70 million for the construction of the new campus.
The Governor who met with the rector of the University of Cyprus noted that the University has very modern research facilities and has already attracted very high-caliber teaching staff, helping Cypriot academics to return to their country and work there.
CEB also approved a loan of €40 million for the rehabilitation of Nicosia`s city centre. During his visit in Cyprus he met with the Mayor of Nicosia Constantinos Yiorkadjis and told him that there were still €20 million outstanding from the loan, that have not yet been released because of delays in the construction works.
CEB is the oldest European Development Bank founded in 1956 originally to help refugees from World War 2. The bank is supposed to finance projects that support social cohesion within Europe but also within a country, such as social housing for low income families, financing Small and Medium Enterprises, and projects to prevent natural catastrophes.
Financing a future solution in Cyprus
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Asked about the prospects to finance a reconstruction and reunification of the island after an eventual solution to its political problem, the Governor of CEB said that they will have to wait for the final outcome, saying however that the international community will appreciate and welcome a solution to the division of the island.
“Then we will have to see what we can do to help. But we will have to wait for the final outcome”, he said.
He also said that his institution as other financial institutions the International Monetary Fund, the European Bank for Reconstruction and Development and the European Investment Bank are all watching and hoping for the best and then they will see that their contribution could be.
“Clearly there will be huge investment opportunities also for the private sector”, he said, especially in the fields of tourism and services industry.
UN-led peace talks resumed in May this year between Cyprus President Nicos Anastasiades and the Turkish Cypriot leader with a view to finding a negotiated settlement that would reunite the country, divided since the 1974 Turkish invasion.
A Migrant and Refugee Fund from CEB
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During Wenzel`s visit, Cyprus announced a contribution of €100,000 for the bank`s proposed Migrant and Refugee Fund, becoming the first country that officially announced its support to the fund.
The CEB Governor told CNA that he has proposed a new migrant and refugee fund that should be a grant based fund and called the member-countries to contribute.
“This is a human tragedy and we have to act. That obviously can not afford waiting for countries to come and to agree on a joined approach”, he said. He explained that according to his proposal the bank would contribute from its own resources €5 million, aiming to raise total grants to €20-25 million.
As he said the purpose of the fund is to help countries to provide the appropriate shelter, transit and reception facilities, giving the example of the island of Lesbos in Greece, where thousands of refugees arrive and seems not in a position to provide the appropriate facilities. The fund will provide food, medical services, shelter and some clothing to refugees coming in Europe, until the countries decide whether they will grand or deny asylum.
“But when they come to Europe, Europe must be able to provide the necessary, basic facilities and services. Otherwise we will fail in meeting this humanitarian challenge” Wenzel pointed out.
He added that in the medium to long terms, the Bank could provide loans to support countries to integrate migrants and refugees in their societies with projects for social housing, schools and medical centres.
Other priority projects
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Referring to other priority projects of the Bank, Wenzel said that since Europe is only slowly moving out of recession and unemployment in many countries is still a big issue, the bank has over the last 2-3 years increased its financial support to small and medium size enterprises and has provided micro – loans to help start-ups.
As he said, unemployment can threaten the social cohesion in Europe and if people don`t see a future in their country they will just leave. He added that countries need young well -educated people to build up a future for their economy.
Asked if there are some ongoing or future projects for Greece, the Governor said that no projects are currently running in the country and that the Bank will wait for the election outcome and the priorities to be set up by the new government.
