NICOSIA - - Speaker of the Cyprus House of Representatives Yiannakis Omirou has stressed that it is important that any allegations against Cyprus about money laundering are well-founded, substantiated and reported to the Government of Cyprus.

Speaking Wednesday before the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament, in Strasburg, Omirou stressed that the island’s request for a bailout is mainly the result of its banking sector’s excessive exposure to Greek bonds and private loans and underlined that the European Council’s decision on a Greek haircut has caused losses of 4.5 billion euro, equal to 25% of Cyprus GDP.

He stressed that Cyprus 2013 state budget has been adjusted to the Troika’s demands, however Cyprus “is not given the time to prove that it implements the reforms approved by the Parliament and that it is in a position to fulfill her promises”.

“Cyprus only needs to be allowed to reduce its public debt to sustainable levels”, he underscored.

The House President described as “disappointing, unfair and unfounded” allegations about Cyprus being a tax haven and a money laundering centre.

Cyprus has adopted and fully complies with all international conventions and EU legislation against money laundering and this is recorded in reports of international organisations, such as the IMF and Moneyval, whereas the House of Representatives has adopted all the bills discussed with the Troika on money laundering, he said.

Omirou went on to say that Cyprus has one of the most competitive corporate tax regimes in Europe, approved by the competent bodies of the EU upon the country’s accession to the Eurozone and added that the effective corporate tax rate in Cyprus reaches 28% if other fees and charges are added.

He explained that as a result of a wide range of agreements signed with other countries to avoid double taxation, Cyprus is used by many international groups in their restructuring.

Russian deposits in Cyprus “do not belong to fraudsters and oligarchs, but to Russian companies operating through Cyprus”, said Omirou who explained that “Cyprus is a major gateway for investments in Europe”. Nor are foreign business activities in Cyprus dominated by Russians, but by EU countries, such as Germany, and the USA, he added.

“Cyprus’ efforts for economic restructure, sustainability and growth, will require great sacrifices on the part of Cypriot people, who has been living for almost four decades with the devastating consequences of the Turkish military occupation”, he stressed.

We expect that recent discoveries of natural gas reserves in Cyprus’ exclusive economic zone will boost our economy, said the Speaker of the House.

“It is therefore very important that any allegations be well-grounded, substantiated and reported to the Government of Cyprus”, he underscored.

The Speaker of the House of Representatives noted that the eurozone debt crisis highlights the urgent need to address critical policy and institutional issues, which determine the actual existence of the Union and pointed out that “desperation and uncertainty among European citizens increase”.

“The Union is presented with a unique opportunity to emerge politically and institutionally stronger from the crisis, with enhanced democratic legitimacy in decision making” Omirou said.

He noted that the balanced approach of the European Socialists – a humanistic approach, adjusted to the needs of the society- maintains safe distances from neoliberal models and full statism models, which have led to dead ends and have collapsed.

Strict austerity measures, resulting in sharp drop of the demand and sharp increase of unemployment, turn to be anti-development measures and rigid sustainability policies imposed by the Troika further deepen recession and recycle the crisis, he added.

Omirou said that debt sustainability, competitiveness, structured economic growth and job creation, must be combined with social cohesion.

“Solidarity with the countries that face the greatest financial pressures must be translated into generous political decisions that range from disconnecting the public debts from the banking sectors’ debts to fairer distribution of the Union’s resources”, he noted.

The Speaker of the House expressed sincere appreciation to the President of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament Hannes Swoboda, “for his continued support towards Cyprus and its people”.

Cyprus applied on June 25 for financial assistance from the European Stability Mechanism estimated at 17.5 billion euro which is equivalent to its GDP. The programme is expected to be agreed on Eurogroup level in March.