Patsalides calls for broader cooperation with Eurosystem partners

Central Bank of Cyprus (CBC) governor Christodoulos Patsalides has stressed the importance of Cyprus’ active role within the Eurosystem, highlighting both the responsibilities and opportunities stemming from participation in Europe’s financial architecture.

In an article published by Philenews, Patsalides reflected on the symbolism of Frankfurt’s Iron Bridge, which bears an inscription from Homer’s Odyssey about sailing “to people who speak a different language”.

Patsalides linked it to the multicultural nature of Frankfurt and the unity of the euro area.

“The bridge connects the countries that have adopted the euro,” he said.

He explained that just below stands the 45-storey building of the European Central Bank (ECB), a hub that brings together thousands of people from across Europe and beyond.

“This building is a living meeting point of people with a common vision and goals,” he said.

He added that officials from the ECB and the national central banks of the euro area gather to deliberate and make recommendations on matters within the Eurosystem’s remit.

“The primary aim is the achievement of price stability and, secondarily, the support of broader economic policy with a focus on safeguarding financial stability,” he said.

Patsalides emphasised that the ECB Governing Council’s decisions, particularly on key interest rates, have a direct impact on the economic well-being of 350 million citizens in the euro area.

“The weight of these decisions makes it necessary to conduct thorough analysis and structured discussions,” he said.

He explained that to achieve this, 19 committees and dozens of working groups operate with the participation of ECB staff and national central banks, while the Single Supervisory Mechanism also carries out the ECB’s supervisory tasks alongside national authorities.

“The final decisions are taken by the ECB Governing Council, which consists of the six permanent members including the President and Vice-President, along with the governors of the 20 national central banks of the euro area,” he said.

Cyprus, he said, is an equal member of this framework following its adoption of the euro.

“The CBC governor participates in the ECB Governing Council, while CBC staff contribute to committees, working groups, the Supervisory Board, joint supervisory teams and cross-border inspections,” he said.

He added that more than 25 per cent of CBC personnel are involved in ECB work at all levels, contributing to European policy while acquiring expertise and skills.

Patsalides highlighted the value of collaboration among Eurosystem central banks.

“Sharing know-how and coordinating approaches to challenges, as well as enhancing supervision, are central to this cooperation,” he said.

As an example, he referred to an initiative by the CBC to host a meeting in Cyprus with the central banks of the Netherlands and Lithuania to exchange views on the supervision of electronic money and payment institutions.

“Expanding cooperation and strengthening our relationships with partners in the Eurosystem is one of our key priorities,” he said.

He explained that the CBC’s participation extends beyond the Eurosystem to institutions such as the European Banking Authority, the European Systemic Risk Board and the Single Resolution Board.

“In addition, the CBC participates in the General Board of the new European Anti-Money Laundering Authority as Cyprus’ permanent representative with voting rights,” he said.

He added that the aim of this new body is effective and consistent supervision of obliged entities on financial crime and closer cooperation with financial intelligence units.

Patsalides further stated that this broad involvement demonstrates how the CBC operates simultaneously as a national institution and as part of the European policy framework.

“The European dimension overlays our main responsibilities, as provided by the EU treaty, and almost all of our staff operate within this European institutional framework,” he said.

He stressed that international and technological developments are expanding the ECB’s scope.

“This includes, for example, the creation of the digital euro,” he said.

He added that completing the banking union through a European deposit insurance scheme and creating a union of savings and investments are also political objectives of the European Union.

Looking ahead, Patsalides argued that Cyprus must play a stronger role.

“In light of today’s international challenges, uncertainty, and developments in the European financial field, the CBC must strengthen its institutional presence within the Eurosystem and Europe more broadly,” he said.

He added that the active and substantive participation of the CBC in policy-shaping can bring multiple benefits for Cyprus.

“For this purpose, the modernisation and transformation of the CBC must be deep and multidimensional,” he said.

He pointed to initiatives already underway.

“Projects such as the establishment and operation of the Centre for Research and Policy Production are already being implemented,” he said.

“At the same time, we are working to broaden and deepen our European footprint and to highlight Cyprus’ economic and monetary history,” he added.

“The goal is to upgrade the CBC’s presence, contribution and credibility both in Cyprus and in the euro area, with tangible benefits for our country,” he said.

He stressed that human capital will be crucial.

“On this journey, particular importance is attached to the utilisation of our human resources, consolidating the ambition for excellence, and creating new opportunities and experiences,” he said.

The governor concluded with a reference to Cavafy.

“‘As you set out for Ithaka hope your road is a long one, full of adventure, full of discovery,’” he said.