Dissertation: Global Economic Crisis and Cyprus Unemployment Analysis

This dissertation investigates the impact of the global economic crisis on unemployment in Cyprus. The research begins with an introduction outlining the background, aims, objectives, research rationale, and dissertation structure. A comprehensive literature review examines existing research on the global economic crisis and its effects. The methodology section details the use of an interpretivism research philosophy and an inductive approach, utilizing secondary data and content analysis. Findings reveal the significant impact of the global economic crisis on Cyprus's unemployment rates. The conclusion and recommendations chapter summarizes the research, offering strategies to mitigate unemployment during economic crises. The study explores the causes of economic crises, features of crisis phenomena, and potential solutions for Cyprus, considering the labor market response to the crisis.

Running head: DISSERTATION
Global economic crisis and its effect on Cyprus unemployment

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Abstract
The main aim of this research is to analyze global economic crisis and its effect on Cyprus
unemployment. This research considers a different chapter for completing the aim and objectives
of research. In addition, introduction chapter considers background of research, aim and
objectives, research rationale, hypothesis, as well as, dissertation structure. Second chapter is a
literature review that critically evaluates the existing literature about the global economic crisis
and its effect on Cyprus unemployment. Furthermore, research methodology illustrated that
interpretivism research philosophy is selected as it aids to gather the real phenomenon regarding
research concern. Along with this, it is evaluated that the inductive approach is chosen for this
investigation as it helps to develop a theoretical understanding of the research phenomenon.
This research also demonstrated that secondary data collection method is applied to pool the
already current data related to global economic crisis and its effect on Cyprus unemployment. It
also discussed that content data analysis is used for analyzing the data through content. Chapter
fourth defines the findings of research report. It founds that global economic crisis has an impact
on Cyprus unemployment. The fifth chapter is the conclusion and recommendations that
conclude research report on basis of findings as well as, recommend the strategy to avoid
unemployment during an economic crisis.

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Table of Contents
Abstract.......................................................................................................................................................2
Chapter 1: Introduction................................................................................................................................4
Chapter 2: Literature review........................................................................................................................8
Chapter 3: Research methodology.............................................................................................................14
Chapter 4: Findings with Discussion of Data............................................................................................20
Chapter 5: Conclusion and recommendations............................................................................................28
Recommendations.................................................................................................................................31
References.................................................................................................................................................37

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Chapter 1: Introduction
Background of research
In the recent era, global economics is the key problem that is faced by society. After 2008, there
was requisite of identifying the reasons for the national economic crisis as well as creations of
the method’s economy by the crisis as well as methods of the economy from the crisis state.
Recently, unemployment is being a major concern for Cyprus. The national economic crisis
inappropriately has not existed in Cyprus. It could direct effect on the life of bubble
(Hardouvelis, and Gkionis, 2016). From the perspective of Cyprus, it is founded that the
international crisis has begun in the mid of 2008 that did not directly consider the banking sector.
The crisis occurred in Cyprus has declined the international demand, particularly for tourist
services as well as, for winter or holiday homes. In addition to this, initial shocks in construction
and tourism sector spread to other fields of the economy as well as, unemployment have
increased at the higher extent (Della Porta, et. al., 2016).
The government has moved carefully in boundaries of European economic recovery plan by
making efforts for stimulating the sector that was poorly impacted such as construction and
tourism, by temporary measures and by focusing on general infrastructural projects. It has also
increased the liquidity in the context of the banking sector. It also sought for influencing the
market psychology favourably (Boot, Wilson, and Wolff, 2016).
Cyprus felt effect of international financial crisis, but, at lower extent as compared to other
member state economies of the European Union. In month of October, global credit crisis was
escalated effectively and the Cyprus Stock Exchange suffered higher losses since 1999. In such
time, the Cypriot President has noted that the international financial crisis is required fast as well
as, coordinated action through all states. In return to Cyprus, it is stated that the Cypriot economy
is not substantially influenced through crisis whereas banking system of the nation still well-built
stand (Orphanides, 2016).
It is also perceived that the Cypriot economy would inevitably be influenced by global financial
crisis. However, because of its robust foundation, it would be competent to easier the crisis as
compared to other states. For overcoming the effect of financial crisis, Cypriot government can
consider the drafted guidelines at EU level at the time of high-level discussion among European
commission, European central banks, and highly affected states like Germany, France, and

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United Kingdom. The ministries of commerce and finance, other financial bodies, and the central
bank of Cyprus have considered the committee on European affairs (Economou, et. al., 2018).
It is also associated with the House of Representatives on negotiations required for revising the
current legislation as per the revised EU authority. It is used for reinforcing the stability about
the financial system, the deduction of exposure regarding credit institutions to risk as well as,
enhancement regarding bank oversight that deals in over one EU member states. It is a serious
issue of the international financial crisis and hence the ‘House of Representatives’ would
continue to get aware of it. Since, it would be competent for further refinement of legislation and
derived via EU directives (Petrou, and Talias, 2016).
Within the labour market level, the key trend at turn of century was slow however stable
corrosion regarding trade union power as well as, collective bargaining in the private sector.
There is also development in peripheral employees but sometimes, it is excluded through rights
and benefits, which derives through collective agreements (Giannakis, and Mamuneas, 2018).
Unemployment remains moderately low via the first decade of 21st century as well as, number of
immigrant employees is continued for enlarging. However, there is a high degree related to
irregular employment. It improved the segmentation for labour forces as a whole and also there
is fragmentation related to employees at the organizational level (Dietrich and Möller, 2016).
Moreover, women, immigrants, and youth have emphasized on low-paid as well as, a precarious
segment about labour forces, distanced through circumstances and choices through trade unions
and excluded through usual employment. In addition, temporary and underemployment
employment in specific had been on increase from before starting the economic crisis, thrashing
tremendously young and new entrants into the labour market (Eliophotou Menon and
Athanasoula-Reppa, 2017).
Research aim and objectives
The subject of research work is related to domestic labour market. The objective of research
work is the reaction of labour market related to the Republic of Cyprus on a global economic
crisis.
The goal is to resolve the following objectives:
- Studying the causes of economic crises in economy;
- Consideration of features of crisis phenomena in economy of Russia and foreign countries;
- Consideration of the main ways of Cyprus exit from the crisis state.

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- Consider concepts such as market, domestic market, domestic labour market concept;
- To analyze the labour market of the Republic of Cyprus;
- Consider the labour market response to the crisis.
Hypothesis:
The crisis indicates the real state regarding the things that currently were oriented with respect to
persistence in longer-term of economic boom and commodity boom in specific. The crisis
provides a rise of impulses related to mobilization. It also reveals the requirement for social,
political as well as, economic modernization.
Research rationale
This research is beneficial for an academician to understand the causes of economic crises in the
economy. It would be also significant for practitioners regarding the features of crisis
phenomenon in the Russian economy and foreign nations. It is also advantageous for
comprehending the main ways of Cyprus exit from the crisis state. This research is significant for
considering the concepts like domestic market, market as well as, domestic labour market
concept. It is also advantageous for assessing the labour market regarding the republic of Cyprus.
This research is beneficial for considering the labour market responses about the crisis (Menon,
Argyropoulou, and Stylianou, 2018).
Dissertation structure
For completion of this investigation in systematic way, the below research structure is followed
in this research study:
Introduction:
It is initial section of the investigation that employs many sections such as the research
background, research topic, research aim and objectives, research questions, as well as research
significance. It could be vital for making a healthy atmosphere that is associated with the
research matter. In addition, this section offers depth information towards research limitations
which would be effective in meeting the goal of research concern. The data of this section is
imperative for a scholar to identify study direction as well as exploring the problems of study
effectively (Crescenzi, Luca, and Milio, 2016).
Literature Review:
The section of the study is associated with the literature review that is performed for exploring
research matter with implying varieties associated with theories. Through this section, the

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scholar facilitates the evaluation of existing knowledge that is related to the research background.
It would also identify the data that has been explored until the specified period (Ioannou and
Sonan, 2017). In this, articles, as well as academic articles, are studied that also support in
creating the conceptual knowledge towards research issue. It is imperative for researcher to
create a base in choosing primary research tools (Dotti Sani, and Magistro, 2016).
Research Methodology:
In the research methodology, the investigator discussed different tools to meet the research
effectively as well as ethical ways. There are certain tools that are considered many research
tools named as research approaches, strategies, research designs, information-gathering tools,
sampling tools, information evaluation tools that could ensure the reliability as well as the
validity of the research result. In this, different research tools are practiced to meet research
objectives and resolve the concern (Botrić, and Tomić, 2018).
Data Analysis and Findings:
This section is beneficial in evaluating data and supports research matter. This data analysis
section could be imperative in evaluating the gathered information. This section could offer an
opportunity to the investigator with respect to evaluate the gathered information and evaluating
against each research objectives (Perles-Ribes, et. al., 2016). Through this way, it supports the
investigator to manage and evaluate the relevant data evaluation tool. From the application of
this method, the research scholar facilitates to represent the information in an effective manner
with respect to creating a reliable result (Magone, Laffan, and Schweiger, 2016).
Conclusion and Recommendation:
This is section that is entailed by research scholar to summarize the overall study on behalf of
findings. This section could make a link between the research objectives as well as research
objectives to create a valid and reliable summary. Apart from this, it suggests a certain
recommendation that is associated with the global economic crisis and its effect on Cyprus
unemployment. In last, his section is imperative for discussing practical implications in directing
the future investigators in their studies (Maruthappu, et. al., 2015).

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Chapter 2: Literature review
Causes of economic crises in the economy
As per the view of Abebe Tøge and Dahl (2016), the key cause of economic crises in the
economy was high employment rates. Due to this, banks have more prospected for lending to
businesses and consumer at the affordable rates as well as, generous repayment terms. While an
economy starts to grow in banks, contracts as well as, other lending institutions with shortening
lending strategies then, it could be complex for borrowing in the context of housing purchasing
and initiating or expanding a business. In addition, liberal lending approaches can be effective in
economic crisis while borrowers cannot have enough money for considering loan terms in
economic contracts. Under the year of 2008 economic crisis, liberal advancing in United States
mortgage market addresses that different homeowners are in concerns while interest rates of their
teaser are finished as well as, rates are adjusted. Along with this, different individuals can longer
afford for buying their homes as well as, shot up the foreclosures and boosting the confidence
related to the whole economy of the United States.
In opposed to this, Baycan and Ozen (2018) evaluated that a stock market bubble creates in the
strong economy while demand for equity investment increases and stock prices are also
determined higher as compared to dictating the valuation of objectives. The stock prices
generally cannot provide assistance and the whole market corrects back to affordable valuation
due to no feasible assets to back the supercilious rates. While, it creates in across the wider
range of stocks, then investors extract money from an uncertain environment that may disrupt
them further. Together with, in cycle period, confidence would slowly return once a shareholder
believes that shares have hit their minimum possible point.
As per the view of Gontkovičová Mihalčová and Pružinský (2015), the high unemployment level
could consequence of an economic crisis in action or could be one of the causes for it. An
economic crisis could create while interest rates are high, constricted lending as well as,
declining consumer spending outcomes in the corporation may let go of workforces to endure the
economic downturn. It may shift the offensive descending spiral because unemployed consumers
do not occupy freely, impacting companies further as well as, leading towards more layoffs. In
addition to this, gaining unemployment could be found while corporations outsource the tasks to
other nations. These kinds of unemployment could be more enduring in nature as well as, could
lead to longer-term economic variability.

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Features of crisis phenomena in the economy of Russia and foreign countries
According to Katsourides (2016), the currency crisis of Russia may burst onto the scene under
2014 till mid of 2015. It has several consequences related to the domestic economy. The initial
quarter indicates the sharp weakening the investment practices, declining sales in the automotive
industry as well as, the housing market, inflation in products and services environment as well
as, deflation in the asset market. Moreover, unemployment is increasing via largely latent
because of part-time employees as well as, unpaid leave and serious diminishing international
economic relations i.e. one-third of international trade turnover.
In opposed to this, Gupta Habjan and Tutek (2016) evaluated that new phenomenon related to
zero years was rapid growth in several kinds of household lending. It was, however, highly
emphasized on funding related to personal consumption as well as, non-productive household
investments. Another funding is auto loans, purchasing durable products by using credit cards
and mortgages can contribute to the expansion of spending and demands of consumers in
economy. The credit boom can stimulate growth for asset rates, real estate, as well as, the later
mainly in major cities.
According to Saltkjel et al. (2017), lack of self-assurance in Russian economy can originate from
two main sources. Moreover, initial cause of the economic crisis in Russian economy is the
declining price of oil in the year 2014. Furthermore, crude oil is key export of Russia but the
price is turn down by about 50% among its yearly elevated in month of June 2014 together with,
16 December 2014. Another cause is outcome of global economic permits that are imposed on
Russia by annexation of Russia as well as, the intervention of the Russian military in Ukraine.
On the other hand, Polyakova and Fligstein (2016) evaluated that throughout history, the world
economy, inappropriately, has practiced complex time for recession or depression during which,
economic practices were marked through unemployment, financial markets, other imbalances,
stock exchanges, and contraction of monetary markets. Since, the early 1970s, economic
assessment of facts showed some variation in commodity prices, stock exchanges, higher
frequency, exchange rates as well as, increase severity related to financial crises.
As per the view of Reibling et al. (2017), in the mid-1980s, Finland, Japan, Sweden, and
Northway faces theoretical bubble in the housing market as well as, stock market. In the early
1990s, it happens in some nations such as Indonesia, Malaysia, and Thailand. Under 1993, prices
of sales in each of these nations are gained by about 100%. In early 2000, it has created a

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potential bubble in information technology that is an alias as dot.com crisis, short and less
forceful crisis. The existing crisis was started with the cheap housing loan provided by banks.
Along with this, banks offer loans however, rather than holding credit in their books; they
enclosed them into CDOs (collateralized debt obligations) as well as, traded them to other
agencies. In addition to this, these agencies approved them to others as well as, reach with them
internationally as resources.
Main ways of Cyprus exit from the crisis state
As per the view of Sassen (2018), Cypriots were aware of the serious concern that economy had
been facing as well as, inevitable bailout agreement is turned into bail but it is going to be
serious. There was willingness for identifying these issues fundamentally. Along with this, fiscal
rationalization had significantly initiated in the month of December 2012. New government has
taken over in the year of 2013 and it has started to push further. In addition, political climate was
that an individual was prepared for shifting the gradual paradigm. In such efforts, the new
government and Cyprus government had predicted the solidarity of Euro-group and above all of
Berlin.
In opposed to this, Bilgili et al. (2017) evaluated that with the initiation of execution of Troika
philosophy. Cyprus has penetrated into depression. In spite of deduction in prices, the buying
power of wages would be declined because salary cuts would be higher. Inappropriately, there
would be many unemployed employees who have zero wage purchasing power. Furthermore,
interest rates would be declined as well as, gradually shift in line in terms of one’s current in
northern euro-area nations.
As per the opinion of Tang and Bethencourt (2017), memorandum emphasizes on draconian
severity such as increasing taxes, declining benefits, and wages. There would be an unfavourable
effect on economic practice. It would also lead to higher unemployment as well as, rate of
immigration, particularly between young alumnae is expected for increasing. In addition, the
implication would be devastating.
Consider concepts such as market, domestic market, and domestic labour market concept
As per the opinion of Neocleous and Apostolou (2018), a market is one of the different types of
institutions, social relations, processes as well as, infrastructures in which, parties are engaged in
the exchange. When parties are engaged in exchanging the products and services through barter,
then most markets is relied on seller offering their products or services in exchange for money

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through purchasers. It can be stated that a market is a procedure through which prices of products
and services could be developed. Markets provide trade as well as, make competent the
distribution along with, resource allocation within society.
In opposed to this, Campos-Soria et al. (2015) evaluated that markets permit any tradable
products to be priced as well as evaluated. A market may create more or less instinctively or
could be developed deliberately through human interaction for making competent the exchange
of rights for products and services. Moreover, markets generally dispose of the talent economies
as well as, held in position via customs and rules like competitive pricing, booth fee, as well as,
sources of products for sale like local produce or registration of stock.
According to Doudaki Boubouka and Tzalavras (2019), the domestic market is a market within
own border of nation and trading is intended at a single atmosphere. Under such markets,
companies face a similar set of political, economic, social, as well as, technological concerns.
Moreover, the domestic market involves only a set of consumers as well as, companies deals
with the same. Corporations in the domestic market are commonly offered with tax credits for
the generation of employment as well as, the government of a nation is making efforts to its best
level to discuss domestic companies for making free trade agreements with foreign nations by
avoiding the barriers i.e. regulations.
In contrast to this, Giannakis and Bruggeman (2017) stated that a labour market is an
environment in which, employees and consumers deal with each-other. Under the labour market,
employers compete for recruiting the best and employees to strive to get the best satisfying task.
A labour market focuses on economy functions as well as, demand and supply of labour. Under
this market, the demand for labour is related to company demand for labour supply of
employees. Furthermore, demand and supply of labour in the market could be persuaded through
transformations in bargaining power.
Labour market of the Republic of Cyprus
According to Parmar Stavropoulou and Ioannidis (2016), impact of global economic decline is
first demonstrated in Cypriot labour market in late 2008 as well as, carries on this day. There is a
continuing decline in economic practices that led to avoid different jobs which are resulting in a
continuous gain in unemployment as well as, continuous decline in employment. Since the year
of 2015, the economy has started to recover with enhancements to main financial indicators. In
the year of 2018, and including February 2019, according to the information obtainable through

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the labour force survey, it was assessed that all indicators have enhanced as well as, the labour
market is gradually recovering.
In opposed to this, Dickmann Brewster and Sparrow (2016) evaluated that unemployment is
Cyprus is 7.1% that demonstrates 2.3% decline as compared to the previous year that was 9.4%
as per the latest preliminary information. As per current labour force survey information, in the
year of 2018, the unemployment rate stood at 8.4% and also demonstrating declining 2.7% as
compared to 2017 while the unemployment rate increased at 11.1%. The average unemployment
rate is 11.1% in the year of 2017 as compared to 12.9% in the year of 2016, 14.9% in the year of
2015, 16.1% in the year of 2014 as well as, 15.9% in the year of 2013.
According to Strüver (2018), the unemployment rate related to young people who falls under the
age of 15 and 24 years was 20.2% in the year of 2018, demonstrating 4.5% decline as compared
to the year of 2017. The average unemployment rate amid young people who comes under the
age of 15 and 24 years was 29.1% in the year of 2016, 32.8% in the year of 2015, 36.0% in the
year of 2014 as well as, 38.9% in the year of 2013.
In opposed to this, Chzhen et al. (2017) evaluated that the largest decline with respect to number
for 2019 by field of economic activity as compared with the same month in the year of 2018 was
reported in the field of new entrants, trade, construction, public administration, manufacturing,
and hotels. Along with this, increasing unemployment was reported in the banking field.
Labour market response to the crisis
As per the opinion of Boeri and Jimeno (2016), leaders of main economies came forward as well
as, took extraordinary coordinated deeds, implementing stimulus packages as well as, providing
resources for enhancing the lending capability of IMF together with, multilateral development
financial institutions. These practices flourished in preventing a high recession. In addition,
international recovery has confirmed to be stronger as compared to previously forecasted. In the
labour market, there is potential volatile is high. The policy response has deteriorated since the
year of 2010 and several governments, specifically, those in developed nations have moved to
fiscal severity. Apart from these policy changes, international economic growth initiated to
decline in the year of mid-2010. Along with this, government strategies are predicted to be
minimum expansionary in near term mainly, as broadening fiscal deficit as well as, increasing
public debt has undermined assistance for a further measure of fiscal stimulus. Hence, slower
growth could be predicted for continuing into 2011 together with, 2012.