Brexit to threaten Cypriot economy as well as expat lives

Published:  3 Apr at 6 PM
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British expats and the British economy aren’t the only sectors expected to suffer due to Brexit.

The upcoming disaster known as Brexit won’t just wreck the British economy and several million expats’ lives as it will also hit on the economies of a good number of the remaining EU member states. According to a report from Standard and Poor, the Netherlands, Ireland and Luxembourg will be worst hit, with Cyprus also extremely susceptible to the effects of new rules on the export of a variety of services and goods to the UK.

The S&P report states disruption to Cyprus’s important financial, tourism and auditing sectors as well as its historic UK connections will cause real problems for the island’s businesses due to their exposure to the worst effects of the EU/UK divorce. The S&P Brexit Sensitivity Index is based on bi-directional migrant flows, foreign direct UK investment and financial sector claims on an ultimate risk basis to UK counterparties. In addition, the Cyprus expatriate community is mostly made up of UK pensioners as well as including two UK army bases regarded as British Overseas Territories.

Brexit is also expected to have a negative effect on the island’s tourist industry, as British visitors make up 33 per cent of the four million tourists arriving every year. Some 60,000 Britons live and work on the island, spending their wages in local businesses, and some 2,500 Cypriots are employed at the military bases. At the same time as the Brexit threat, Cyprus is facing possible political instability caused by its government’s recent and extremely unpopular public sector austerity cuts. Although the island isn’t a stranger to externally-caused unrest, the combination of the Brexit effect and local issues could well result in another period of major instability.
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