Exiting the financial crisis: Cyprus’ investment in the environment
Cyprus’ economic situation does not fare much better than its larger Mediterranean neighbours. It is the fifth EU Member State to seek financial bailout from the EU and its debt in 2012 sits at EUR 13 billion with a 6.3% deficit. Furthermore, Cyprus has had a heavy exposure to the Greek financial crisis contributing to its precarious economic position.
The rise of tourism as a prime economic activity has led Cyprus into rapid unsustainable infrastructure development (especially in coastal areas), urbanisation, agricultural abandonment and intensification. Many of the most severely threatened habitats have been altered by development of holiday housing and for sport and leisure activities, such as water intensive golf courses.
Cyprus’ focus on unsustainable economic activities hampers its economic resilience against the financial crisis. Other European countries have already illustrated the reality and consequences of fast track solutions at the expense of the environment. Spain, which currently (2012) has the highest unemployment rate in the EU, based its temporary economic growth on a short-term holiday housing boom.
These activities have little impact on local economies; create stress on water and land resources and damage biodiversity. Although Cyprus is a net payer to the EU Budget, paying net EUR 6.5 million in 2010, Cyprus receives EUR 178 million from the EU. It has been missing a major opportunity to the potential use of European funds for achieving economic prosperity through environmental investments.