Page 61 - Ekonomija i Biznis_noemvri 2015.indd

NORTHERN CYPRUS
IS PREPARING FOR
THE EURO
As the correspondent Turkish
media announce, a delegation
of the European Central
Bank is expected to arrive on
the island in November and
together with the Turkish
Cypriot authorities to prepare
the process of adoption of the
euro as the official currency of
Northern Cyprus. Currently,
the two Cypriot communities
negotiate an end to the Cyprus
problem, and after the expected
unification, the Turkish unit in
the new Cypriot federation will
be able to use the Turkish lira
for one more year, before finally to 0% is expected to remain
switching to the euro. Since
1974, Cyprus has been divided
into two entities, when Turkey
occupied the north of the island
after the military coup prepared
by Greek Cypriot nationalists
supported by Athens, which
aimed to attach the country to
Greece. The Turkish Republic
of Northern Cyprus declared its
independence in 1983, and has
been recognized only by Ankara.
The internationally recognized
Republic of Cyprus became a
member of the European Union
in 2004. Policy initiatives over
the past years are expected to
finally close the Cyprus issue,
and the two territories to form a
federation.
ECB ANNOUNCES NEW
MEASURES TO TACKLE
DEFLATION
This was announced by the
President of the ECB Mario
Draghi in an interview with
the Italian newspaper „Il Sole
24 Ore“. „If we estimate that
the objective is under threat,
the ECB will take everything in
its power to ensure the desired
inflation in the medium term.“
His statements come after the
statistics had shown that in
September consumer prices
in the euro area fell by 0.1%,
which is far from the target for
growth of nearly 2%. According
to Draghi, the inflation of close deficit the outlook is estimated
until the end of the year and
the objectives are to be achieved world and leader of the OPEC
between mid-2016 and the
end of 2017, mainly due to
delayed effects of the current
depreciation of the euro. After
the debt crisis in the European
Union from 2008/2009, the euro
zone faces with a long period
of low and negative inflation
that forced the ECB to use non-
standard measures including
the quantitative easing which
provides injection of fresh
money into the system. If no
real changes occur, the ECB is
expected to come up with new
measures in December.
FLASH WORLD
FINANCIAL COLLAPSE
OF SAUDI ARABIA
DUE TO FALLING OIL
PRICES
The continuing decline in oil
prices over the past 18 months
has led the oil kingdom from
a position of budget surplus
of 7% to a deficit of 16% for this
year. According to „Standard
and Poor‘s“, if oil prices do
not increase significantly,
Saudi Arabia is under threat of
continuous budget deficit in the
next three years. The agency
downgraded the credit rating of
the country to A+, which is still
a high rating (fifth highest), but
because of the expected long-year
as negative. Saudi Arabia is one
of the largest oil producers in the
countries. 80% of its budget is
filled by exports of petroleum
products and therefore its
financial stability is closely linked
to the price of oil. Earlier, the
International Monetary Fund
warned that the low price of
oil (about 50 dollars per barrel)
can financially jeopardize most
countries in the region where, in
addition to Saudi Arabia, Oman
and Bahrain are considered the
most sensitive.
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