The need to simplify complex regulations, reduce bureaucracy, and incorporate flexibility mechanisms—in light of the current economic situation—into European economic governance, Finance Minister Makis Keravnos noted on Friday. He also stated that fiscal stability should be the primary and non-negotiable framework and objective of European economic policy.
On Friday morning, while welcoming participants to the 17th Limassol Economic Forum and speaking about the EU’s role in turbulent times, the Minister of Finance noted that we are living in a political and economic context in which the world around us is changing so rapidly that it is not only difficult to predict, but often difficult to interpret as well.
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“Wars in the wider European region, geopolitical tensions and shifts, the deregulation of international trade, the global energy crisis and energy challenges, the technological revolution, and climate change are shaping an unprecedented and uniquely complex international economic and political environment,” he added.
These challenges, he noted, do not appear to be isolated or temporary, “while, on the other hand, they are multidimensional and often reinforce one another,” and he emphasized that no country, no matter how powerful, can address them on its own.
This fact highlights the enduring value of the European Union, said Mr. Keravnos, noting that the EU is not—and should not be—merely a common market or an economic union, but “a community of values, solidarity, and shared responsibility.”
“In times of uncertainty, European cooperation proves to be the most important tool for maintaining economic stability and social cohesion,” he noted, emphasizing that, in the face of the challenges posed by intensifying international competition and geopolitical developments, “the European response clearly cannot be international isolation.”
On the contrary, he added, it must be based on a two-pronged strategy—autonomy on the one hand, and an open economy on the other—and noted that this strategy must strengthen Europe’s capabilities, without undermining the multilateral trading system that has been the cornerstone of European prosperity.
At the same time, he emphasized that resilience and competitiveness are not conflicting goals, but “two sides of the same strategy,” and pointed out that “a competitive economy is more resilient to external crises, while a resilient economy creates the conditions for sustainable growth and quality investments.”
Referring to Cyprus, he said that the country’s economy has demonstrated remarkable resilience in recent years and that “prudent fiscal policy, the gradual reduction of public debt, the stability of the financial system, and the implementation of reforms have strengthened the country’s credibility and competitiveness.”
Beyond that, he continued, the technological transition is transforming our economies at an unprecedented pace, with artificial intelligence, the digitization of public services, cybersecurity, and new digital infrastructure becoming essential prerequisites for economic growth, productivity, and international competitiveness.
“Therefore, Europe must invest more in innovation, research, and the skills of its workforce. Strengthening the single market and completing the Savings and Investment Union are crucial steps in this direction,” he added.
Noting that the EU possesses significant internal strengths and potential, a strong cultural tradition, high-quality universities, technical expertise, substantial capital that must be channeled into productive investments, as well as a capable and specialized workforce, Makis Keravnos noted that all of these must be harnessed in a coordinated manner, within the framework of a shared European vision, with a clear strategy and effective leadership.
To this end, he said, complex regulations must be simplified, reduce bureaucracy, and incorporate flexibility mechanisms—in light of the economic situation—into European economic governance.
At the same time, he added, fiscal stability should be the primary and non-negotiable framework and objective of European economic policy, while noting that flexibility and a commitment to fiscal stability are not mutually exclusive; on the contrary, “inflexibility and rigidity, without taking into account the economic conditions of each period, may undermine the very stability they seek to ensure.” “Current developments in European countries demonstrate the consequences of a disruption to economic stability,” he added.
In his speech, the Minister of Finance emphasized that Cyprus is actively participating in this collective European effort and that “despite its small size, our country has proven that it can make a substantial contribution to shaping European policies and promoting common solutions.”
He also recalled the promotion of a large number of legislative measures and initiatives for the benefit of European citizens through the Cypriot EU Presidency, while noting that Cyprus’s geographical location confers particular strategic importance.
“As a member state of the European Union in the Eastern Mediterranean, Cyprus plays an important role as a bridge of cooperation between Europe and the broader Middle East region,” he said, adding that “we actively contribute to promoting stability, dialogue, and regional cooperation, with a particular emphasis on the sectors of energy, transportation, connectivity, security, and investment.”
At the same time, he continued, “we recognize that energy security remains a key priority for the European Union. Diversifying energy sources and supply routes, accelerating the green transition, and developing cross-border energy infrastructure are common European goals, to which Cyprus seeks to contribute substantially and actively.”
The Minister of Finance noted that the current situation calls for responsibility, foresight, and collective action, as the challenges we face transcend national borders and require common European responses.
Europe, he added, possesses all the necessary elements to play a leading role in the new global reality: strong institutions, high-quality human capital, expertise, and, above all, democratic values that form the foundation of its identity.
However, he pointed out, the challenge is to capitalize on these strengths with greater determination and at a pace that does not merely react to events and developments, and he underscored the need to strengthen the competitiveness of the Europeaneconomy, while ensuring that growth is not accompanied by a widening of social inequalities.
“We must strengthen Europe’s security and resilience, while maintaining the open nature of our economy and our commitment to free international trade and international cooperation,”he said, reiterating that Cyprus remains committed to this common European mission.
We believe that, through cooperation, solidarity, and the implementation of common European policies, we can not only respond effectively to today’s challenges, but also build a future that is more resilient, more competitive, and more prosperous for all European citizens,” Mr. Keravnos added in his remarks.
