Cyprus Economics Laureate Christopher Pissarides has proposed the creation of a fund where natural gas income will be kept under the control of the Central Bank of Cyprus, which will decide ways to invest it.
Addressing an award ceremony given in his honour by the Cyprus Employers & Industrialists Federation, Pissarides also proposed that the natural gas fund will be divested legally with the ability to fund certain infrastructure projects and that the state of Cyprus will receive an annual percentage of 4% from the fund’s profits. “In my opinion, creating a fund controlled by the Central Bank of Cyprus is the only solution” he added.
Pissarides further said that he does not agree with the view that energy prices in Cyprus will be reduced once natural gas reserves are exploited, explaining that natural gas prices are set internationally and therefore a Cypriot company will not be able to buy it at a reduced price just because it is exploited in Cyprus.
He also noted that high energy prices in Cyprus are mainly due to the monopoly enjoyed by the Electricity Authority of Cyprus.
Pissarides moreover expressed the view that investing in the Cypriot banks will prove to be very profitable. He noted that if foreigners invest in Cypriot banks offering new liquidity, he will have made a very profitable investment. “I have no doubt, that in the next three years, he (the investor) will have made major profits,” he remarked.
Concerning foreign investments, he also pointed out that the Cypriot government should try to become more competitive. “The prospects for Cyprus are to be found in foreign investments and not tourism, because we cannot compete with the Greek or the Italian islands and attract a vast number of tourists, even if we build courts or marinas”.