In a federal Cyprus, fiscal policy will be of key importance, both in preserving stability and in fostering economic convergence across the whole island economy. Fiscal policy can contribute to these goals in several ways, which go well beyond the constitutional issues involved in fiscal federalism.

USAID, through the UNDP-Action for Cooperation and Trust (ACT) project and together with the British High Commission, sponsored a workshop to examine practical ways in which the overall design of budgetary frameworks and of fiscal policy can help support economic convergence in the case of a Federal Cyprus.

The goal of the workshop was not to focus on legal or constitutional issues, but rather on the operational priorities in devising a fiscal policy and the means to foster internal and external convergence. Speakers at the workshop presented key research findings on the subject and a panel of experts discussed the opportunities and challenges in devising a sound fiscal policy.

Among the key issues that were discussed were: “Fiscal Issues in Federal States: Lessons of Experience;” “Incentives and Institutions for Unified Markets;” and “Rules and Institutions for Successful Federal Decentralization.”

This event was organized by Oxford University and The Management Centre of the Mediterranean. Funded by USAID and implemented by UNDP, ACT supports principles of multiculturalism and provides Greek Cypriots and Turkish Cypriots the resources and opportunities to jointly build the foundations for a sustainable solution to the Cyprus Problem.