Is UK Election Hope For Cyprus?

The snap British election called by UK Prime Minister Theresa May for June 8 has raised hopes that it could lead to a ‘soft’ Brexit that would limit the damage to Cypriot businesses and expats living in Cyprus.

The general expectation is that the election will lead to an increased majority for the ruling Conservative Party.

In its first opinion polls since the election was called, YouGov put support for the Conservatives at 48% (up 4%), support for the Labour Party at 24% (up 1%), for the Liberal Democrats at 12% and the Liberal Democrats on 12%.

One theory is that a larger Conservative majority could dilute the influence of members of parliament calling for a ‘hard’ Brexit. A hard Brexit risks leaving the UK without any trade deals at all once the two-year time limit is up, as well as putting restrictions on UK citizens living in the EU.

“If the early UK election means that the British government is going for a soft Brexit, then that will be positive for tourism in Cyprus,” Elena Tanou, Vice-President of Top Kinisis travel firm, told the Cyprus Weekly.

“One of the uncertainties about Brexit is the impact on airlines – it is not clear yet if they will be allowed to fly freely between EU countries and the UK, and the UK is still our biggest market,” she added.

A hard Brexit could put into jeopardy the right of Ireland-based Ryanair to fly direct from Cyprus to the UK, for example.

Another issue is the exchange rate.

“Anything that stabilises the exchange rate will be good for tourism,” said Tanou.

Right to reside

Another uncertainty surrounding Brexit is the right of expats to reside in Cyprus, work in Cyprus and buy a property. Before Cyprus joined the EU, expat rights were restricted, although the rules had always been easier for pensioners.
May’s desire to reduce net migration to below 100,000 per year could lead to a backlash over UK citizens’ rights in the EU.

The Cyprus-UK Business Association told the Cyprus Weekly that it is already working to keep up good relations between Cyprus and the UK.

“We are working closely with the Ministry of Foreign Affairs in Cyprus so as to influence as much as possible a favourable outcome post-Brexit for Cyprus that will ensure that our bilateral business relations with the UK will continue and will be enhanced,’’ said Androulla Pittas, President of the Cyprus-UK Business Association.

“Our understanding is that in a few months from now, after the French and German elections, we will have more clarity, than at this point in time, about the terms that the EU will set for Brexit in the negotiations .”