Cyprus, officially called the Republic of Cyprus, is an island country in the Eastern

Mediterranean. The third larges and third most populous island in the Mediterranean, it is

located south of Turkey; west of Syria and Lebanon; north of Egypt, Israel, and
the Palestinian region of the Gaza Strip; and southeast of Greece.

BACKGROUND:

A former British colony, Cyprus became independent in 1960 following years

of resistance to British rule. Tensions between the Greek Cypriot majority and
Turkish Cypriot minority communities came to a head in December 1963, when
violence broke out in the capital of Nicosia. Despite the deployment of UN
peacekeepers in 1964, sporadic intercommunal violence continued, forcing
most Turkish Cypriots into enclaves throughout the island. In 1974, a Greek
Government-sponsored attempt to overthrow the elected president of Cyprus
was met by military intervention from Turkey, which soon controlled more
than a third of the island. In 1983, the Turkish Cypriot administered area
declared itself the "Turkish Republic of Northern Cyprus" ("TRNC"), but it is
recognized only by Turkey. An UN-mediated agreement, the Annan Plan,
failed to win approval by both communities in 2004. In February 2014, after a
hiatus of nearly two years, the leaders of the two communities resumed formal
discussions under UN auspices aimed at reuniting the divided island. The most
recent round of negotiations to reunify the island were suspended in  July 2017
after failure to achieve a breakthrough. The entire island entered the EU on 1
May 2004, although the EU acquis - the body of common rights and
obligations - applies only to the areas under the internationally recognized
government, and is suspended in the "TRNC." However, individual Turkish
Cypriots able to document their eligibility for Republic of Cyprus citizenship
legally enjoy the same rights accorded to other citizens of EU states.

border sovereign base areas: Akrotiri 48 km, Dhekelia 108 km

Trade and economy
The most important sectors of Cyprus’s economy in 2018 were wholesale and retail trade,
transport, accommodation and food services (25.3%), public administration, defence,
education, human health and social work activities (19.3%) and professional, scientific and
technical activities; administrative and support service activities (10.4%).
Intra-EU trade accounts for 28% of Cyprus’ exports (Greece 6% and Italy 2%), while
outside the EU 15% go to Cayman Islands and 9% to Libya.
In terms of imports, 57% come from EU Member States (Greece 18% and Italy 8%), while
outside the EU 7% come from South Korea and 6% from Israel.

6 districts; Ammochostos (Famagusta); (all but a small part located in the

Turkish Cypriot community), Keryneia (Kyrenia; the only district located
entirely in the Turkish Cypriot community), Larnaka (Larnaca; with a small
part located in the Turkish Cypriot community), Lefkosia (Nicosia; a small
part administered by Turkish Cypriots), Lemesos (Limassol), Pafos (Paphos);
International organization participation :
Australia Group, C, CD, CE, EBRD, ECB, EIB, EMU, EU, FAO, IAEA, IBRD,
ICAO, ICC (national committees), ICCt, ICRM, IDA, IFAD, IFC, IFRCS, IHO,
ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC
(NGOs), MIGA, NAM, NSG, OAS (observer), OIF, OPCW, OSCE, PCA, UN,
UNCTAD, UNESCO, UNHCR, UNIDO, UNIFIL, UNWTO, UPU, WCO,
WFTU (NGOs), WHO, WIPO, WMO, WTO
National symbol(s) :
Cypriot mouflon (wild sheep), white dove; national colors: blue, white

Agriculture - products :
citrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb;
dairy, cheese
Industries :
tourism, food and beverage processing, cement and gypsum, ship repair and
refurbishment, textiles, light chemicals, metal products, wood, paper, stone
and clay products

Exports :This entry provides the total US dollar amount of merchandise exports on an
f.o.b. (free on board) basis. These figures are calculated on an exchange rate basis, i.e., not
in purchasing power parity (PPP) terms
$2.805 billion (2017 est.)
$2.7 billion (2016 est.)
Exports - partners :
Libya 9.4%, Greece 7.7%, Norway 6.7%, UK 5.3%, Germany 4.1%  (2017)
Exports - commodities :
citrus, potatoes, pharmaceuticals, cement, clothing
Imports :
$7.935 billion (2017 est.)
$7.153 billion (2016 est.)
Imports - commodities
consumer goods, petroleum and lubricants, machinery, transport equipment
Imports - partners :
Greece 19%, Italy 7.5%, China 7.4%, South Korea 7.3%, Germany 7%,
Netherlands 5.1%, UK 5%, Israel 4.1% (2017)
Refugees and internally displaced persons :
refugees (country of origin): 6,259 (Syria) (2018)
IDPs: 228,000 (both Turkish and Greek Cypriots; many displaced since 1974)
(2019)
note: 10,690 estimated refugee and migrant arrivals (January 2015-November
2019)

Economic cooperation

An association under the auspices of the Cyprus Chamber of Commerce and Industry has
been established with the name "Cyprus-China Business Association" hereinafter referred
to as the "Association". To promote, expand and encourage economic and services, trade
relations between Cyprus and China and organise meetings with officials of the two
countries with a view to safeguarding the smooth operation and flow of trade between the
two countries.[1]
Trading relations and bilateral investment have maintained positive development
throughout the years. By the end of July 2012, China's non-financial investment to Cyprus
amounted to US$17.4 million and Cyprus' investment to China amounted to US$121
million. Over the same period, the cumulative amount of engineering project contracts
signed by Chinese companies in Cyprus is US$235 million, and the accumulative turnover
is US$265 million. The governments of both sides remain committed to promoting
investment flows between the countries to further harness the potential of their deepening
economic relationship. Increasingly Chinese business delegations have visited Cyprus to
explore the investment environment and to learn more about the opportunities and policies.
The arrival of Chinese visitors in 2011 was recorded as an increase of 45 percent.

Political relations

As from 2004 Cyprus has been a full member of the European Union. As Chinese officials
have announced Cyprus Presidency of the EU from July 2012 has been a chance for China
to count on a trustful friend to bridge the gap between China and Europe and serve as a
middle link in this effort. Already Cyprus Government has liberalized the Foreign Direct
Investment policy for not only EU Nationals. Administrative procedures have been
simplified and no limitations apply in most sectors of the economy. Consequently, foreign
companies now have the opportunity of investing and establishing business in Cyprus on
equal terms with local investors. Further to that a new policy has been implemented
allowing Chinese property buyers applying for a Permanent Residence with a minimum
investment of 300,000 Euros.

Bilateral & Strategic Relationships[edit]

Relations between the United States and Cyprus can be described as being excellent due to
many factors.[4] Cyprus is seen as democratic state that can serve as a forward base for the
United States. In numerous occasions military bases, ports and airports such as the Port of
Limassol and the Larnaca International Airport respectively, have been used for
humanitarian and support purposes by the US.[5] Cyprus has also given exclusive rights to a
US oil extracting multinationals such as ExxonMobil to extract natural gas from
its Exclusive Economic Zone.[6][7] U.S. imports from Cyprus agricultural products and
minerals while business ties encompass several services.[8]
The US also works closely with Cyprus in order to advance shared priorities both
bilaterally and in the context of strategic partnership with the European Union, which
Cyprus is a member state.[9] The Bilateral partnership focuses in areas of common interest,
such as peace, security, trade and investment, diversifying European energy sources, and
protecting cultural heritage across the island.[10][11][12] The Cabinet of Israel approach of
Cyprus over the recent years, and especially after the Gaza flotilla raid, has
boosted Cyprus–Israel relations even further. The United States supports this approach
with an Energy Triangle between Cyprus, Israel and Greece.[13][14]
In 2018, the United States and the Republic of Cyprus signed a Statement of Intent to also
strengthen and develop their security relationship. The agreement encompasses efforts to
combat terrorism, enhance maritime security and further promote regional stability in
the Eastern Mediterranean.[15][16] The U.S. Embassy in Cyprus is located in Engomi area,
within the capital city of Nicosia. The current U.S. Ambassador to Cyprus is Judith G.
Garber. Cyprus maintains an embassy at Washington, D.C. and a consulate general in New
York City. The United States Department of State retains detail information about Cyprus
and US relations and operations.[17][18]
Wilbur Ross, the acting United States Secretary of Commerce, was a major shareholder
and vice chairman of the board of Bank of Cyprus, after he invested €400 million in the
bank in 2014. Prior to his appointment, Ross was a successful banker known for acquiring
and restructuring companies and later selling them for a profit once operations have been
improved. Ross is a hall of fame member and past director of the Turnaround
management Association.


On 9 March 2020, Cyprus confirmed its first two cases: a 25-year-old man
from Limassol who had returned from Italy and a 64-year-old health professional
from Nicosia who had returned from the UK.[6]

On 11 March, Cyprus confirmed four more cases: two Greek Cypriots who
returned from the UK the day before and one taxi driver from Paphos, whose grandson
was also hospitalised.[7] All three men were taken to Famagusta General Hospital. The
fourth case was in self-isolation at home.[citation needed]

On 12 March, four new cases were confirmed: a person who had travelled to the
UK and contacted the authorities after developing symptoms,[8] a person who had
returned from Italy, a person with symptoms after returning from Greece, and an
individual returning from Germany with no symptoms.[citation needed]

On 13 March, 11 new cases were confirmed.[9] President Nicos Anastasiades, in a
special appearance, announced the closing of all borders except for nationals for 15
days from 15 March.[10]

On 21 March, the first death was confirmed.[11][12]

On 25 March, 8 new cases were confirmed.[13]

On 26 March, 14 new cases were confirmed.[14]

On 27 March, 16 new cases and two deaths were confirmed.[15]

On 3 April, 40 new cases and one death were confirmed.[16]

On 4 April 30 new cases were confirmed.[17]

On 5 April, 20 new cases were confirmed.[18]

On 6 April, 19 new cases were confirmed.[19]

On 7 April, 29 new cases were confirmed.[20]

On 8 April, 32 new cases were confirmed.[21]

On 9 April, 38 new cases and one death were confirmed.[22]

On 10 April, 31 new cases were confirmed.[23]

On 15 April, 20 new cases were confirmed.[24]

On 16 April, 20 new cases were confirmed.[25]

On 17 April, 15 new cases were confirmed.[26]

On 18 April, 11 new cases were confirmed.[27]

On 19 April, 6 new cases were confirmed.[28]

On 20 April, 5 new cases were confirmed, two patients recovered.[29]

On 21 April, 12 new cases were confirmed.[30]

On 22 April, 6 new cases were confirmed, one death and one patient recovered.[31]

On 23 April, 5 new cases were confirmed and 1 patient recovered.[32] A total of 148
people have recovered, according to the Ministry of Health.[33]

On 27 April, 5 new cases were confirmed and 1 person died.[34]

On 30 April, 7 new cases were confirmed.[35] According to the updated statistics
released by the Ministry of Health, a total of 296 people have recovered.[36]

In early May, repatriation flights for Cypriots and legal Cypriot residents in the UK
began; upon arrival, all those coming back into the country are required to spend at
least two weeks in quarantine at certain hotels which have been designated and funded
by the government.[37]

On 16 May, a few days after some students had returned to school as part of the
easing of restrictions, 4 new cases were confirmed in students and staff members.[38]

On 21 May, the lockdown ended and repatriation flights continued, although those
coming back to the country no longer have to be quarantined for two weeks. The
government also announced that airports will reopen fully on 9 June, though flights
from countries heavily affected by the virus—most notably the UK and Russia, from
where Cyprus' two biggest tourist groups come—will not be permitted until further
notice.[citation needed]

On 23 May, no new cases were reported for the first time since 23 April.

On 8 June, 6 new cases were reported [39
Cyprus’ economy faces significant downside risks due to the coronavirus crisis, with
tourism being impacted the most, according to a European Commission report released on
Tuesday.

In its Summer 2020 Economic Forecast, the European Commission said that Cyprus’
tourism revenues are expected to be only 25 percent of last year’s level, which stood at
2.683 billion euros, according to the Statistical Service of Cyprus.

Tourists have started to trickle in since flights resumed in early June, but the real test for
the recovery of the country’s tourism sector is expected after August 1, when the British
market – the largest source of tourists to Cyprus – will open.

The European Commission forecast said that as a further consequence of the drop in
tourism, unemployment in the services sector is expected to significantly increase.
The European Commission projected Cyprus’ gross domestic product to contract by 7.75
percent in 2020 and to expand by 5.25 percent in 2021.
The Cypriot government has enforced a strict lockdown with a wide restriction on the
freedom of movement of individuals, school closures and the suspension of all non-
essential business operations. Extraordinary measures were adopted to deal with the
emergency challenges on the economy and the labour market, including the protection of
jobs by compensating the costs of wages and the provision of special allowances to self-
employed persons and working parents.

-need to supervise the health of the bank

-in order to thoroughly resolve non-performing loans, banks need to have serious

investment, it is necessary to consider and assess the benefits of such loans and impacts on

politics and sovereignty of the country.

-use loans effectively, avoid loss and waste, set goals to reduce budget overspending to the

budget balance.

-find out the source of the problem, the solutions that should be put in the interests of the

majority, not for the benefit of an individual organization or group

-not letting any economic sector grow too big forcing the government to rescue during

the crisis to avoid the risk of economic collapse.

The government adopted the measures below:

- Expenditure measures
- Strengthening of the public health sector (buffer of up to EUR 100 million). This
provision aims to strengthen health services by supporting spending and investment in: (i)
employment of additional medical staff, (ii) enhancing of equipment and infrastructure,
(iii) enhancing ambulance services, (iv): centre of testings (Institute of Neurology and
Genetics) and (v) helpdesk services. Some of this could be requested under CRII. - Income
support to affected workers ‘Special Plan for suspension of business’ (EUR 252 mn
disbursed for the partial and full suspension schemes over the period 16/03-12/06/2020).
The scheme provided wage compensation to the employees of the businesses that were
forced to suspend their operations (or /experiencing at least 25% decline in their turnover
compared to the year before due to the Covid-19 pandemic) by a decree of the Minster of
Health and/or a decision of the Council of Ministers.
Businesses of which operations are directly related to the above mentioned businesses
experiencing at least 80% loss of their turnover due to the Covid-19 pandemic are also
eligible. An important requirement is that businesses taking part in the scheme shouldn't
have dismissed any employee as from 1/3/2020, for the period that the company is in the
scheme and an additional period equal to the period the company benefits from the scheme
plus 1 month.
- As of mid June, the partial suspension of business scheme is discontinued, and two new
targeted schemes take effect, namely a ‘Special Scheme for Hotel Units and Tourist
Accommodation’, and the ‘Special Scheme to Support Businesses’ related to the Tourism
Industry or businesses directly affected by Tourism or associated with Businesses that are
subject to Mandatory Total Suspension. The total expected budget costs of the income
support schemes to affected workers amounts to about EUR 500 mn in total.
- Self-employed workers support Scheme ‘part of the Special Plan for suspension of
business’ for the period March 16, 2020 to April 12 ( EUR 33mn over the period 16/03-
12/06/2020 – the scheme is not extended). This will take the form of a special
unemployment allowance. This excludes certain categories, inter alia, supermarkets,
doctors, pharmacies. Estimates indicate that 40,000 self-employed workers will be able to
benefit from the scheme.
- Special Absence Leave (actual disbursements of EUR 17.81 mn over the period 16/03-
12/06/2020 – the scheme is not extended beyond). Subsidised leave to parents working in
the private and public sector, when schools, private or public, nurseries, childcare or other
educational institutions are suspend their operations. Estimates is based under the
authorities working assumption of 50.000 recipients during one month. It is possible that
this measures will last for more than 1 month – as schools could stay closed for longer.
- Special support allowanve for the self-employed (EUR 4 mn).
- Subsidised sick leave related to the coronavirus measures (EUR 45 million for three
months). This measure will compensate individuals in quarantine and vulnerable workers
(estimated number of receipients of 20,000 employees).
- Overseas Student Allowance (EUR 15 million). A EUR750 allowance is provided to
cover the costs of students attending university overseas so they do not return to Cyprus
during Easter.
- Subsidisation scheme for small enterprises and self-employed. As of midJune, EUR
100 million (0.5% of GDP) is earmarked for direct funding (one-off grants) to small and
very small companies and the self-employed in order to cover part of their rent and
operating costs.
- Interest subsidy scheme for new loans for businesses and the self-employed, as well as
for household house purchases1. According to preliminary estimates by the MoF, the
subsidy cost would amount to EUR 180 million for businesses and another EUR 45 million
for household’s loans (house purchases) for a fouryear period starting from 2021 until
2024.
 - Tourism Support. Additional budget (EUR 11 million) for the implementation of
actions to support tourism between June and September 2020, in cooperation with Airlines
and Travel Organizers, as well as actions to enhance initiatives to attract tourists during the
period October 2020 - March 2021. Co-promotional program with tourist agents for the
projection of Cyprus as a safe destination for tourists (10 mn).
- Special plan for the agriculture sector: Temporary suspension of fishing activities as a
specific measure to mitigate the possibility of the spreading COVID-19 (€10 million)
- Repatriation scheme (EUR 6 million)
- Tax measures (distinguish tax deferrals from other measures)
- Suspension of the increased contributions to the NHS (cost of EUR 52.5 million). This
measure will delay the increase of NHIS contribution originally planned in April 2020 by
three months, for employers, employees and the state, in order to support the disposable
income of employees, self-employed and lower business cost. The estimated net cost is at
about EUR52.5 million of the foregone extra contributions from private sector employers,
pensioners and employees. The timetable for the implementation of Phase 2, due to start in
June 2020, of the NHS is delayed by three months at least.
- Extension by one month of the submission period for objections to social security for
self-employed persons until 30 April 2020 (expires 31 March 2020).
- Tax credit for voluntary rent reduction. Income Tax Law amendment for the grant a
tax credit equivalent to 50% of the reduction granted to the amount of rent (rent reduction
between 30-50%). Valid for any three months in the tax period of 2020. Cost is estimated
at EUR 47 mn in 2020.
- Reduced special VAT rate from 9% to 5%, for tourist accommodations and restaurants
as of July 1 and continuing to January 10, 2021. The estimated cost is EUR 15 mn.
- Tax deferral/liquidity provision
- Temporary suspension of VAT payments [liquidity measure of EUR 300 million]. All
suspended obligations will be paid back with a delay, by 10th November 2020. Note this
could have a major impact on financing needs in the short term.
- The government agreed to the following three lending schemes, in cooperation with the
EIB, amounting to up to 1.7 billion (or about 8.5 % of GDP):
- increase by €500 million, or about 2.5% of GDP, of the existing credit line of
loans to SMEs and mid-caps available under the so-called ‘Cyprus Banks Loan for SMEs
and Mid-Caps’ Scheme, the instrument for MultiBeneficiary Intermediated Lending
(MBIL) of the European Investment Bank (EIB). The scheme was set up in 20142 .
- Up to of EUR 800 million of loans to SMEs, (or about 4% of GDP) through an
extended lending capacity of the Cyprus Entrepreneurship Fund (CYPEF), a joint venture
between the EIB (European investment Fund) and Cyprus which was already implemented
since 20153.
- Participation in the Pan-European Guarantee Fund. Cyprus is expected to draw
€300-€400 million for SMEs, or about 1.5-2% of GDP. All loans schemes will have
clauses to protect jobs. Contributions to the Guarantee Fund will take the form of
guarantees (unfunded obligation).
- Liquidity measures to support airports and mitigate the impact of the COVID19
pandemic at Larnaca and Paphos Airports (above EUR 70 mn in 2020-2021)
- Special arrangements for those involved in the Settlement of Overdue Taxes. Based
on legislation adopted in 2020 (Ν11(Ι)/2020) and entered into force from 14/2/2020, for
taxpayers that have been included in the Settlement of Overdue Taxes and for those who
are eligible to join by 30/6/2020 it was arranged that failure to pay up to 5 instalments (out
of 3 previously applicable) would not lead to the cancellation of the right to this settlement.
- Temporary suspension for income tax return for submission for companies and self-
employed with accounts or obliged to submit a statement with notification issued by the
Tax Department
- Applications for VAT or corporate tax refunds will be processed as soon as possible
in particular tο the businesses most affected (e.g. restaurants, hotels, tour operators, self-
employed, etc.)
- Advance payment of VAT by certain categories of taxpayers in the interest of the
national economy (e.g. supermarkets, pharmacies).
- Sectorial, regional measures, or measures other than fiscal (e.g. labour) - (as mentioned
above) Tourism Support. Additional budget of EUR 11 million for the implementation of
actions to support tourism between June and September 2020, in cooperation with Airlines
and Travel Organizers, as well as actions to enhance initiatives to attract tourists during the
period October 2020 - March 2021.
- Other
- Introduction of ceilings on the prices of personal hygiene products (masks, antiseptics,
antibacterial liquids, soaps, etc.) to counter the effects of profiteering.
- Extension of the requirement to submit the necessary supporting documents for 3 months
for those who have already applied for the ESTIA Scheme.
- Decision to Cyprus Energy Regulatory Authority (CERA) for a universal reduction of the
electricity tariff by 10% for a period of 3 months.
- Freezing of loan’s repayment (decree voted on 29.02.2020). For nine months, loans’
capital and interest payment is postponed, while interest is compounding in the meantime.
[voted on 29/3]. Given the approval from the European Banking Authority any debt not
served in the next nine months is not considered as NPL.
- Ceasing of foreclosures (3 months) and house eviction (2 months)
- Temporary suspension of the process of foreclosures by KEDIPES for a period of 3
months. Also from banks – Announcement of the Association of Cyprus Banks.
- Forbearance of calling in guarantees under public and private contracts for the supply
of services or products that will be delayed by the crisis. The freezing on the calling of
guarantees would also benefit the government when it is a guarantor.
- Banking sector measures decided by the ECB. Measures concern the release of capital
reserves, which for the Cyprus systemic banks are estimated by the CBC in excess of EUR
1.3 billion.
- Banking sector measures decided by the Central Bank of Cyprus. It is considering
further local measures which will are expected to be announced by the Governor of the
Central Bank. Already, the Central Bank issued a press release on its suggestions to the
Commercial banks for temporary freezing of foreclosures, for temporary allowing for loan
restructurings and temporary easing of lending. The Cyprus Asset Management Company
(government owned) has already adopted these.