Progress report on Cyprus's accession course
says Cyprus economy grows strongly

November 8, 2000

On November 8, 2000 the European Commission issued its progress report on Cyprus’ accession course. The report was satisfactory in that it stated that Cyprus continues to fulfill the Copenhagen political criteria. The European Commission stressed that the Cypriot economy continues to grow strongly and is operating at its full potential. Cyprus is a functioning market economy and should be able to cope with competitive pressure and market forces within the Union. The report also highlighted that although the predominant problem of the island is its continuous division, Cyprus has made tremendous efforts within the last year to find a political settlement that complies with the Accession Partnership.

During the period covered by this report, Cyprus has achieved a substantial amount of progress. With regard to administrative capacity, Cyprus continued with the upgrading of its existing infrastructure, including the recruitment of new staff. Over the last year, there has been a great deal of progress in adopting legislation in key areas of the internal market. Regarding the field of indirect taxation, the standard rate of Value Added Tax (VAT) has increased from 8% to 10%. Other areas of improvement are in the fields of agriculture, transport and fisheries, justice and home affairs, company law and the environment. Cyprus has also strengthened its administrative capacity in several areas such as the Department of Social Insurance with regard to social security coordination, liberalization and structural reforms, the fields of regional policy and social control and the areas of taxation and home affairs.  

The report of the European Commission also suggests several areas of improvement and extra attention as a way to achieve accession quicker and with a more successful manner. The country still has to set up regulatory authorities, and build institutions in the field of free movement of goods, agriculture, energy, telecommunication and justice and home affairs. Further recruitment of staff in areas such as company law, transport, taxation, environment and justice and home affairs is still necessary.  

Judging from this report of the European Commission, Cyprus has successfully made progress in addressing the medium-term Accession Partnership priorities, and has worked to its full extent to fulfill a number of them. Despite its improvement within the last year though, Cyprus still has to fully prepare its private sector so that it may operate in the open environment that integration into the European Union requires.

Cyprus’ chief European Union negotiator George Vasiliou described the report as “very positive and favorable.” He also stated that there is still a great deal of work to be done with regard to Cyprus’ accession into the Union.

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