The possible impact on the Cypriot economy should the United Kingdom leave the European Union was examined during a meeting held on Tuesday at the Ministry of Foreign Affairs with the participation of key government Ministries and departments and private sector stakeholders.
Reliable sources have told CNA that a document containing the views of all parties will be drafted and a new meeting will be held following the referendum in the UK, scheduled for June 23.
Rating agencies such as Standard and Poor`s believe that Ireland, Cyprus, Luxembourg and Malta stand to lose the most from a possible Brexit.
Speaking to CNA, Zaharias Ioannides, General Director of the Cyprus Hoteliers Association, said that due to longstanding and close trade ties between Cyprus and the UK, a possible brexit would have negative consequences on the island`s tourist sector on two counts.
The first, he said, concerns a weakened British pound compared with the euro that would adversely affect the competitiveness of tourist destinations in the euro area, among which Cyprus, as 40% of tourist arrivals come from the UK generating revenue amounting to €1 billion annually.
However he stressed that the impact will not be immediate as tourist bookings for 2016 have already been made. “For this year the impact will be limited,” Ioannides said.
“It is imperative to be proactive, in case of a brexit, with a view to minimising the medium-term and long-term impact from such a development, offsetting losses from other destinations either from the region or from far-away destinations,” he said.
The second issue relates to visas for British citizens, whether EU member-states will be required to issue visa for British citizens in the transitional period.
Such an event would affect the last-minute tourist bookings from British citizens, a rapidly developing sector, Ioannides added.
“There are solutions for such an eventuality such as the PROVISA, a visa electronic issuance implemented for Russian and Ukrainian citizens with very positive results,” he added.
“There are solutions for every possibility, provided that we act timely and immediately on all possibilities,” he concluded.