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Cyprus On Alert As Global Trade Tensions Rise

The island of Cyprus stands on the brink of economic uncertainty as tensions escalate within the European Union’s trade landscape. While not a focal point of these disputes, Cyprus faces significant economic repercussions, particularly impacting its vital tourism and export sectors.

Concerns From The Government

Deputy government spokesman Yiannis Antoniou expressed concern over the evolving economic landscape, noting, “The economic environment is becoming increasingly negative, raising multiple uncertainties.” Antoniou highlighted how Cyprus’s limited trade partnerships might still be affected: “While Cyprus isn’t a major export player, the broader EU economic impact will influence living standards for many Europeans.”

Impact On Tourism And Exports

As tourism remains the cornerstone of Cyprus’s economy, any economic downturn across Europe could directly affect travel budgets. Antoniou pointed out, “When disposable income falls, travel is among the first luxuries to be cut—which we must prepare for.”

Beyond tourism, key exports like halloumi could experience setbacks. Antonis Fragoudes from the Federation of Employers and Industrialists stated, “With nearly €9.5 million in halloumi exports to the US, rising tariffs would challenge our competitiveness.”

Explore how Greek feta producers are handling similar challenges.

Broader Economic Implications

Amidst broader global turmoil, local businesses remain cautious. Economic instability in key markets, due to actions like US tariffs on European vehicles, poses risks. Andreas Andreou from the Cyprus Chamber of Commerce noted, “Declines in EU jobs or consumer confidence could limit tourism inflow to Cyprus.”

While the European Central Bank may consider adjusted policies, some analysts suggest Cyprus diversify its trade alliances outside the EU and the US, reaching out to newer markets in the Middle East and Asia.

Economist Tassos Yiasemides emphasized, “Strategically seeking alternative trade agreements is vital for sustaining our economic resilience.”

As global trade volatility persists, the importance of preemptive strategies to protect Cyprus’s economic future becomes critical.

EBA Unveils 2024 Report to Strengthen Supervisory Convergence Across the EU

Overview

The European Banking Authority’s 2024 annual report details a comprehensive effort to harmonize supervisory practices across the European Union. The report outlines strategic initiatives across prudential supervision, resolution and crisis management, digital finance, consumer protection, and the interim AML/CFT framework until the end of 2025. This marks a decisive step in implementing further recommendations from the EBA’s evaluation of regulatory efficiency.

Consolidating Prudential Supervision

The EBA’s European Supervisory Examination Programme for 2024 focused on critical areas such as liquidity and funding risk, interest rate risk, and the operationalization of recovery measures. With risk levels remaining stable amidst ongoing challenges in data quality, stress testing, and modelling assumptions, the EBA is set to intensify its monitoring activities for online deposit platforms and oversee compliance with Supervisory Outlier Tests in 2025.

Advances in Resolution And Crisis Management

In the realm of resolution, the report highlights significant progress in operationalizing resolution tools, notably the bail-in mechanism in cross-border environments. Improved coordination among authorities, enhanced management information systems, and persistent efforts to refine data quality and legal recognition issues underpin this advancement.

Strategic Developments in Digital Finance

With digital finance at the forefront, the EBA has prioritized its preparations for the implementation of the EU’s Markets in Crypto-Assets Regulation. Efforts include the supervision of asset reference tokens and e-money token issuers, the development of an EU-wide supervisory handbook, and the coordination of workshops aimed at establishing a unified supervisory approach from the outset.

Enhancing Consumer Protection And AML/CFT Measures

The report also underscores improved cooperation and risk-based supervision among national authorities in consumer protection and AML/CFT. Notable progress has been achieved through AML/CFT college monitoring and implementation reviews, as the EBA prepares for the eventual transfer of AML/CFT supervisory responsibilities to the new EU Anti-Money Laundering Authority by the close of 2025.

Fostering A Common Supervisory Culture

Beyond sector-specific improvements, the EBA continues to champion supervisory convergence through robust cross-border initiatives including peer reviews, Q&A sessions, breach of Union law investigations, and comprehensive training programmes. In 2024 alone, 23 courses were delivered to over 3,000 participants, reinforcing best practices and aligning supervisory standards throughout the EU.

Future Trajectory

Looking ahead, the EBA is set to place greater emphasis on the effective implementation of the Single Rulebook. This strategic pivot will enhance supervisory outcomes and ensure the consistent application of regulatory measures, as reflected in the annual reports to the European Parliament and the Council under the Supervisory Review and Evaluation Process.

With these measures, the EBA reaffirms its commitment to building a unified and resilient supervisory framework, essential for navigating the complex regulatory landscape of the European financial sector.

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