The Cooperative Movement of Cyprus is one of the most developed and well organized Cooperative Movements in the world.
Its establishment at the beginning of the 20th century was the most significant reaction of society against the economic and social impoverishment of the individual and in particular against the phenomenon of usury. In these difficult conditions, the institution of cooperatives, which centered on the individual, entered into force and played an important role in both the economic development and the social progress of the people of Cyprus.
When Cyprus became an independent Republic in 1960, the Cooperative Movement was already quite developed. In every rural community and suburb, a cooperative credit institution (C.C.I.) and a cooperative consumer store were established, in order to cover the basic needs of the residents. Furthermore, several cooperative societies undertook the task of gathering the agricultural products from farmers/members and marketing them at affordable prices for the benefit of their members.
The Turkish invasion of 1974 had a serious impact on the Cooperative Movement. Two hundred and twenty seven (227) cooperative societies which were established and operated in the area that is at present under Turkish occupation were displaced or became inactive and this resulted in the loss of all their assets. Of those, only 19 were able to resume their activities in the Government controlled areas. Despite the serious problems created by the invasion and subsequent occupation and the displacement of one third of Cypriot population, the Cooperative Movement was instrumental in significantly reducing the housing problem created, despite the severe blow to itself. It therefore relieved the state of many problems while contributing, at the same time, to strengthening social cohesion, which constitutes the necessary basis of any development activity.
The social contribution of the Cyprus Cooperative Movement today covers all facets of Cyprus society, maintaining always its human approach.
Since its establishment, the Cooperative Movement allocated an important part of its financial resources to promote the right to education for all citizens, instead of the privileged few. Furthermore, the Cooperative Movement, realizing the importance of saving as one of the most important factors in the exercise of policy development, initiated schools’ saving schemes, in order to encourage a savings’ conscience among young people, thus contributing to the shaping of their character. As a result, the idea of saving developed and is at a satisfactory level now.
The Cooperative Movement also contributes decisively, regardless of the policy that is applied to each different sector, to the major objective of the State, which is none other than improving the welfare of its citizens and which fully coincides with the purposes and objectives of the Cooperative Movement. However, the Cooperative Movement’s most important service to the State is its great contribution to reducing many social problems, so as to ensure social cohesion, which constitutes the most important prerequisite for the smooth and effective exercise of any activity. A typical example is the ongoing support given to small and medium-sized businesses through the participation of the Cooperative Central Bank (C.C.B.) in various funding programs of the European Union.
Today, the Cooperative Movement of Cyprus is engaged in different sectors of the economy such as the financial credit sector, the consumer and purchase sector, the distribution and marketing of agricultural and livestock products sector, the processing sector and the service sector.
The significant modernization of the Cooperative Movement, achieved in the past decade, with the decisive contribution of the Authority of Cooperative Societies (A.C.S.) and the collaboration of the other cooperative bodies, worked undoubtedly for the benefit of the people of Cyprus and contributed to the support of the Republic of Cyprus and the effective adjustment to the obligations that were undertaken with the accession of Cyprus to the European Union in 2004 and the adoption of the European acquis.
A research conducted in May 2013, revealed that the Cooperative Movement enjoys 45.1% of the citizens’ confidencere in the financial system of Cyprus. Indeed, this is confirmed by Cypriot citizens’ deposit share in euros, amounting to around 40%, which the Cooperative Movement holds in the financial system of Cyprus
The signing of the Memorandum of Understanding in December 2012 between the Republic of Cyprus and Troika (European Commission, European Central Bank and International Monetary Fund) brought significant changes in the financial system of Cyprus, including the Cooperative credit sector. The Cooperative credit sector was recapitalized and the State became the main shareholder. In addition, a restructuring plan of the Cooperative credit sector was drawn up, which includes, inter alia, structural and other reforms, as well as further mergers among C.C.I. With the completion of the mergers, 18 new C.C.Is have emerged nationwide, with adequate capital base and size that allows them to have the necessary organizational structure and staff, so as to ensure proper service to members and customers and the protection of their deposits.
The Cooperative Movement firmly believes that the strengthening the C.C.I.s’ capital base with €1.5 billion by the Republic of Cyprus to meet the requirements of the Troika, as well as the more effective functioning and competitiveness of the C.C.Is will enable them to strengthen their position in the market and create the right conditions for utilizing the possibility of recovering their shares from the State, so that the ownership of the C.C.Is will return to their members.
Within the implementation framework of the Memorandum and with the amendment of the Cooperative Laws in September 2013, the powers of licensing, supervision and regulation of the C.C.Is were transferred to the Central Bank of Cyprus, so that all financial institutions (commercial banks and C.C.Is.) be placed under a single supervisory authority, in view also of the establishment and operation of a single supervisory mechanism of the European Central Bank in November 2014.
A.C.S. remains the competent Authority for issues related to cooperative societies’ registration, cooperative operation of all companies on the basis of cooperative principles and cooperative legislation, as amended from time to time, ensuring prudent management of cooperative societies that operate outside the financial credit sector, as well as issues of general promotion of the Cooperative Movement in Cyprus.
The main objectives of A.C.S. are the following:
- Further promotion and development of the cooperative business model in Cyprus, to which the United Nations attaches great importance through its relevant resolutions, thus recognizing the extensive contribution of Co-operatives to the international community, as well as its constant support offered to people
- Ensuring proper management and sustainability of cooperative companies operating in the non-credit sector
- The modification and codification of the cooperative legislation, so that it efficiently corresponds to the current environment and framework, taking also into account the relevant international and European trends, as well as its effective implementation by all cooperative societies
- The preservation of the cooperative values and principles, as well as the cooperative identity.
- The full utilization of all the possibilities and opportunities available to the Cooperative Movement, within the framework of the measures announced by the President of the Republic of Cyprus for the development of the social economy, in relation to the utilization of the idle productive workforce (specific or multiple professional expertise) on a voluntary basis with the establishment of new cooperative societies, drawing up and utilizing relevant European funds for business activities in new economic areas, such as rural tourism, agricultural production, production and distribution of energy and petroleum (wind parks, petrol stations, etc.), as well crafts and various other activities.
The work that the Cooperative Movement of Cyprus has accomplished in more than 100 years of life and contribution is a legacy to the younger generations to continue its social mission.
For further information:
Authority of Cooperative Societies website: http://www.cssda.gov.cy