PRESIDENT of the Cyprus Employers and Industrialists Federation (OEV) Christos Michaelides has urged those who can pay their loans, to do so without any further delay. He also called on the banks to accelerate the restructuring process of viable loans and do whatever they can to recover debts from whoever fails to repay their loans. In an interview with the Cyprus News Agency, Michaelides said the problem of non performing loans (NPLs) would have been smaller had Cyprus adopted the same definition as in other European countries. "Lending is perhaps the biggest problem faced by the banking sector, in particular the NPLs," he said. "We have repeatedly stressed that those who can repay their loans, must do so without any further delay. The banks must move at a faster pace regarding the restructuring of viable loans and do whatever they can to collect from debtors who fail to repay their loans. It is important to hold an honest dialogue between the banks and the enterprises as the banks' ultimate goal is not to close down businesses but render them viable so as to recover the debts". "The problem would not have been so big, if the definition of the NPLs was not the one we have today. Had we applied the same definition as the majority of European countries, things would have been much better, both for the banks and the borrowers," he notes. He stressed that economic recovery and the solving of social problems created by the economic crisis will eventually start from the businesses and therefore high priority should be given in ensuring their sustainability, creating new businesses and formulating an environment for business development. He said OEV is focusing its efforts on three pillars: 1. Restarting the economy and creating conditions for growth, jobs and prosperity, 2. Reconstructing the forces of the economy, focusing on private initiative, along with redesigning Cyprus' economic model, attracting investments, accelerating privatisations and consolidating the banking system, 3. Promoting innovative practices, incentives and effective measures for the enterprises to survive and develop. "Strengthening entrepreneurship, helping Cypriot businesses to take over projects abroad and attracting investments, particularly foreign ones, will boost liquidity and alleviate problems caused by the economic crisis. To revive entrepreneurship we believe that the state's contribution must be significant to support businesses by reducing bureaucracy and provide incentives for innovative and imaginative practices," he said. He said by facilitating Cypriot businesses to take over construction, projects or parts of them, abroad, will generate significant revenue for the economy and many job positions for Cypriots and he called on the Ministry of Commerce to provide practical contribution toward that direction. "We believe that the gradual loosening and lifting of restrictive measures (on capital flows) and the continuous upgrades of the economy's creditworthiness will contribute positively towards enhancing Cyprus' credibility, which is very important for investors. We hope that the government's efforts to attract investors will soon yield results," he added. Michaelides stressed that external funding is necessary to support investments, including the upgrading and expansion of infrastructure to support private sector initiatives in fields such as renewable energy, natural gas and various forms of tourism. "Many companies face serious financial problems and use all their forces to remain in the market," he said, noting that it "is very important to utilise in a proper manner the European Bank on Reconstruction and Development, which will allocate funds to the private sector".
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