The new crisis just comes on top of an already existing situation. Both Greece and Cyprus were still dealing with the previous crisis, making efforts to achieve an organic reduction of their high rates of non-performing loans. One of the sectors most affected worldwide is the travel and the tourism. In Cyprus the contribution of travel and tourism to GDP is more than 21 %. Therefore, we cannot ignore the significant impact of this sanitary crisis on the Cyprus’ economy.
Since in Cyprus insolvency is yet a last resort for both creditors and debtors in financial distress, the insolvency framework was not a major concern for authorities and legislators during this period. However, the Parliament has passed a bill at the beginning of this month regarding the set up of the Department of Insolvency. This will take over all matters related to the Insolvency Framework, as well as the activity of the Insolvency Practitioners. The very next step should be the change of the Insolvency Framework. There is an urgent need to adapt the existing legislation to the current reality of our economy.
The insolvency tools, specialised courts and insolvency advisers play a key role in the way a country deals and survives an economic crisis, limit the damages, help us go back to economic growth.
Your recommendations and thoughts for both Greece and Cyprus would be very much appreciated. We are in this together so I think sharing information is very important and good solutions should spread across all countries faster than the virus did.