It gives me great pleasure to address the 2nd Annual Economic Forum which is organised by SFS Group Public Company Ltd in cooperation with Bloomberg and EDT Offshore Limited. I wish to thank and congratulate the organizers for making available this timely and important discussion of issues that affect the economy and the shipping industry at a global and national level.

I would like to welcome all of you, especially those who came from abroad, to participate as speakers or attendees in this unique Economic Forum, the deliberations of which will make an important contribution to the ongoing discussion about the status of the global economy.

Shipping, because of its nature, has been facing challenges, opportunities but also crises since its inception. Historically, the markets have gone through turbulent, stable but mostly booming periods over the years and the shipping industry has learned to survive and to adapt. The current financial crisis had a dramatic impact on shipping beyond any “traditional cyclicality” of the market. This is because when the global macroeconomy and the world trade are booming, the world’s shipping lanes are jammed with super tankers, dry bulk and container ships. The 2008 financial crisis dealt a significant blow to the shipping industry in general, which could not be immune to the liquidity driven global bubble. Fortunately, however, the global economic recovery has proven stronger than previously anticipated, especially as far as its positive impact on global trade volumes which have increased by nearly 20% during the first half of 2010.

It is being widely agreed that the global economy is on a real track of recovery, with some developing countries like China and India constituting the major driving forces for global economic recovery, while the developed countries’ economies are growing much more slowly.

Nevertheless, even in times of recession and uncertainty about global markets, the shipping industry does not preclude the existence, and in fact it makes wide use of inherent opportunities. Traditional wisdom states that “Always, something good emerges out of a bad situation”. When the markets are down it’s a good time to focus on quality, safety and efficiency as well as providing opportunities for specialised services in the shipping industry. Old

vessels will be withdrawn and scrapped and this will result in the renewal of the world fleet, having a positive impact on fuel efficiency, air emissions, safety on board and fewer accidents and losses.

Since in difficult times like these, shipowners and operators focus their efforts on finding ways to improve efficiency and to reduce costs, the competitiveness of various ship registers has particular importance. Although Cyprus has much to offer in terms of infrastructure and maritime administration, ultimately the bottom line is costs. In that respect, Cyprus provides now more than ever before a competitive edge to its clients, with regard to taxes, fees and services following registration. The new tonnage tax system for Cyprus shipping was approved by the European Commission on the 24th March 2010. The respective Merchant Shipping (Fees & Taxing Provisions) Law was enacted by the House of Representatives on the 14th of May 2010 and applies as from the fiscal year 2010. This simplified tonnage tax system, which is not linked to a notional profit and a corporate tax rate, is the main feature of the Cyprus system and is approved for the first time for an EU Member State, particularly a state with an open registry. It also extends the benefits applicable to owners of Cyprus flag vessels and ship managers to owners of foreign flag vessels and

charterers. It also extends the tonnage tax base, to include profits from the sale of vessels, interest earned on funds used other than for investment purposes and dividends paid directly or indirectly out of profits generated from maritime transport activities.

The system, therefore, provides Cyprus with a competitive advantage and is expected to improve the already strong position of the country in the shipping world and to promote it both as an international ship´s registry and a high quality maritime centre. At the same time, it secures a stable fiscal environment for Cyprus Shipping in the long term. It also introduces incentives for new shipping activities and extends the implementation of the EU maritime transport policy beyond the European boundaries.

The sustained growth of Cyprus Shipping is one of the priorities of the Cyprus Government and my Ministry and our aim is to maintain Cyprus´s leading role in the world shipping scene through the continuous development of Cyprus shipping. The Cyprus registry today, ranking tenth among international fleets and third in the European Union, is continuously upgrading its services in order to offer a high standard of support to international shipping. Cyprus is also a major Shipmanagement Centre worldwide, with a total of around 60 Shipmanagement companies operating in its territory.

Several of these companies rank among the largest of their kind in the world. Cyprus appears to be among the top five countries and territories in the world with the largest number of third party shipmanagement companies on its territory. This leading position of Cyprus as a respectable and leading Maritime Cluster has been a source of pride for the government and for all Cypriots over the years and a promising source of further economic growth for the years to come.

Looking into the future it is obvious that the geopolitical situation in our area is changing fast and Cyprus is once again in the center of these developments. New political balances are emerging which are not unconnected with the discovery of energy reserves in our area. Let me add also that if our concerted and intensified efforts for putting an end to the 25 year long Turkish embargo that has adversely affected the Cyprus and European shipping industry finally succeed, Cyprus and EU shipping will indeed play a truly leading role in World shipping and the World economy.

Ladies and Gentlemen,

I am confident that shipping will recover from the current crisis. It is by far the most efficient form of transportation and inevitably, when the demand for goods and raw materials recovers, shipping will flourish again. The questions left to be answered are when and to what extend. I am confident that the distinguished speakers will share with you the wealth of their knowledge and expertise as well as their ideas, suggestions and thoughts in this respect.

I would like to wish you all a very productive afternoon and fruitful deliberations.