A settlement of the Cyprus problem would boost economic activity on the island and remove instability which hampers investments, officials from the European Commission and the World Bank, told the Economist Summit on Wednesday.

“As every economist knows, instability is the enemy of the economy as it hampers investments. As long as Cyprus remains divided it will remain inherently unstable. This is one of the main reasons why the EU remains fully committed to the reunification of Cyprus,” Mario Nava, head of the European Commission DG for Reforms, said in a video message.

He added that the Commission has translated this commitment into practical measures, recalling that the Commission is implementing the EU aid programme for the Turkish Cypriot community worth more than €30 million per annum year, supporting the economic development for the Turkish Cypriot community.

He also highlighted the Green Line regulation, an EU regulation governing trade across the dividing line in Cyprus, recalling that in 2022 the volume of trade across the divide amounted to almost 50 million euro, the best result ever achieved.

“But this result could still be improved many times over,” he said, noting that the Commission has opened a one-stop in Nicosia where interested traders from both communities can receive information about the procedures for Green Line trading.

He also recalled the designation of Cypriot white cheese, Halloumi, which received a PDO designation, benefiting both sides of Cyprus.

On his part, Goran Tinjic, Programme manager for southern Europe at the World Bank, said that economic integration matters, as it alleviates poverty and boosts productivity.

He said that the €50 million in trade volume between the two communities is “a drop in the ocean” compared with the potential capabilities of economic integration.

As he said, last year the World Bank carried out an assessment identifying 200 products and services produced by Greek Cypriot firms from which Turkish Cypriots could benefit, whereas similarly there are products and services available from Turkish Cypriot firms.

“There is a huge benefit of economic integration”, he added, noting that the scarcity of trust “hurts economic growth.”

Tinjic also pointed out the need for free movement of capital across the island, persons as well as commercial vehicles, stating that the Bank is carrying out a study to assess the impediments to free movement of vehicles across the island.