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Cyprus

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1) REFERENCES

Commission Opinion [COM(93) 313 final - Not published in the Official Journal]
Commission Report [COM(98) 710 final - Not published in the Official Journal]
Commission Report [COM(1999) 502 final - Not published in the Official Journal]
Commission Report [COM(2000) 702 final - Not published in the Official Journal]
Commission Report [COM(2001) 700 final - SEC(2001) 1745 - Not published in the Official Journal]
Commission Report [COM(2002) 700 final - SEC(2002) 1401 - Not published in the Official Journal]
Commission Report [COM(2003) 675 final - SEC(2003) 1202 - Not published in the Official Journal]
Treaty of Accession to the European Union [Official Journal L 236 of 23.09.2003]

2) SUMMARY

In its July 1993 Opinion the Commission stated that integration of Cyprus into the internal market should pose no insurmountable difficulties. Nevertheless, it noted major deficiencies regarding technology, labour force skills and the quality of production.

The November 1998 Report recognised that the general principles of Cyprus's industrial policy were compatible with the European Union rules but also called for considerable further efforts to restructure industry.

In its 1999 Report, the Commission noted that considerable restructuring had been undertaken to deal with certain weaknesses in Cyprus' industrial fabric.

The November 2000 Report emphasised that Cyprus had made some progress in the field of industrial policy, particularly with regard to investment promotion. Little progress had been made, on the other hand, with privatisation and restructuring. As for policy on SMEs, the main progress had been in improving companies' access to finance.

The November 2001 Report stated that Cyprus had continued to step up its efforts to promote investment. With regard to SMEs, progress had been made in implementing an enterprise policy and in improving the business environment.

The October 2002 Report stated that Cyprus was continuing to make progress in industrial policy and in adapting its policy on SMEs.

The November 2003 Report considered that Cypriot legislation on industrial policy and on SME policy meets the commitments arising from the accession negotiations. Cyprus is, however, urged to continue to strengthen its administrative capacities.
The Treaty of Accession was signed on 16 April 2003 and accession took place on 1 May 2004.

COMMUNITY ACQUIS

EU industrial policy seeks to enhance competitiveness, thus raising living standards and increasing employment. Its aim is to encourage an environment favourable to initiative, to the development of undertakings throughout the Community and to industrial cooperation, and to foster better exploitation of the industrial potential of innovation, research and technological development policies. EU industrial policy combines instruments from a number of Community policies, and includes both instruments related to the operation of markets (product specification and market access, trade policy, state aid and competition policy) and measures related to industry's capacity to adapt to change (stable macro-economic environment, technology, training, etc.).

To cope with competitive pressure and market forces within the Union, the industry of applicant countries will need to have attained a certain level of competitiveness by the time of accession. The applicant countries need to be seen to be pursuing policies aimed at open and competitive markets along the lines set out in Article 157 (ex-Article 130) of the Treaty on European Union.

EVALUATION

Cyprus is continuing to implement its industrial policy. Its main objectives are the provision of support for the restructuring of traditional industries and the attraction of high-tech industries and foreign investment. Investment has been promoted as a result of further measures to open the market and to reduce administrative procedures.

In the field of privatisation and restructuring, Cyprus should ensure that its industrial policy is implemented in conformity with the EC state aid and competition rules. It will also be necessary to boost entrepreneurship and competitiveness by modifying the system of State aid. A National Development Plan should be ready for 2004-2006 in order to derive full benefit from the structural funds.

Cyprus has made good progress since the 1993 Opinion and the 1998 Report in adapting its industrial policy. Productivity does, however, need to rise and production costs fall.
This chapter is provisionally closed, no transitional arrangements have been requested and Cyprus has met its commitments (see 2002 Report).

In the field of SME policy, Cyprus adopted the European Charter for Small Enterprises in April 2002. Efforts have been made to improve the business environment. Particular efforts have been made to promote access to new technology, increase entrepreneurial spirit among young people and encourage access to finance. The SME definition is aligned with the Community acquis.

Cyprus has made progress in this field since the 1999 Report. It will need to facilitate access to innovation for SMEs, strengthen administrative structures and increase expenditure on research and development.
This chapter is provisionally closed, no transitional arrangements have been requested and Cyprus has met its commitments.

This summary is for information only and is not designed to interpret or replace the reference document.

 
Last updated: 08.03.2004
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