Cyprus is the only stable country in the East Mediterranean
Cyprus’ standing as an international business centre was a dealt a big blow by the events of March 2013, when the second largest bank was wound up, deposits at the biggest bank were frozen and eventually bailed in and capital controls imposed.
A country with its banks on life support, crippled by non-performing loans (NPL) and in desperate need of recapitalisation, would have trouble enough keeping the foreign businesses based here from leaving, let alone attracting new ones. Being in an assistance programme and having international lenders dictating economic policy were not the kind of selling points that attracted new business.
Two-and-a-half years later, the economy is on the recovery path, recording modest growth for two consecutive quarters, the banks have been re-capitalised although the proportion of NPLs remains high, capital controls have been lifted and the government can once again borrow from the markets.
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