Daily Press Review - 10/12/2018

In today’s press:

Harris Georgiades brings back CYTA privatisation

Harris Georgiades brought back to the table of discussion, the privatisation of CYTA as well as other profitable organisations such as the National Lottery, in a speech he gave to the Plenary yesterday on the 2019 Budget. Presenting the government’s priorities, the MoF stood at the “partial privatisation of CYTA with the attraction of a strategic-partner investor, before it is too late”. He also mentioned that within the same policy framework, the government will aim at the privatisation of the Stock Exchange and the National Lottery. At another point, Goergiades said that the government’s decisions on the Co-op led to stability and drove the country to consecutive upgrades by rating agencies, supporting for once more the government’s decision to shut down the Co-op and give its ‘good’ assets to Hellenic Bank.

Big challenges for banks

A recent European Commission report pointed out the big challenges that Cypriot banks are faced with. The main challenges Cyprus banks are facing is low profitability and low levels of capital adequacy. The Commission adds that because of this problem, the biggest banks are aiming to conclude capital increases. According to the Commission, Cypriot banks are under a continuous pressure on capital. The CET 1 capital index was reduced to 14,2% in June 2018 compared with 14,9% the year before, due to losses generated by a high percentage of NPLs. The percentage of total assets was reduced by 80 basis points (to 15,5%) in the same period. It is reported that while the CET 1 ratio is higher than the EU average, the Cypriot banks, need to keep high capital ratios in order to absorb the shocks induced by the high NPLs and low quality of loans portfolio. From an accounting perspective, the European Commission, says that the banking sector had been profitable in the first 6 months of 2018, after recording losses in the previous year.

Purchases only with cards from 2019

One of the measures announced at the Parliament by MoF Harris Georgiades aiming to combat tax evasion, is the wider promotion of card payments. Furthermore, everyone, no matter their income will have to submit a tax declaration. Specifically, Georgiades noted yesterday, that the law will obligate all providers of products and services to provide their customers with a terminal for electronic payments. He said that this decision will be part of a series of policies related to tax compliance. However, Georgiades voiced his disagreement over the reduction of fuel taxation, promoted by the ruling party Democratic Rally and opposition Democratic Party in the place of the reduction of the interest income levy, noting that “fuel tax in Cyprus is lower compared with the rest of Europe, while environmental reasons should be taken into account which do not allow the government to reduce this taxation.” DISY and DIKO are not backing down, however, having already submitted a relevant bill to the Parliament yesterday.

Series of amendments on budget

The government submitted to the Parliament yesterday, 49 amendments on the 2019 budget. With these amendments job positions are created and cancelled, while additional budget lines are included, necessary for the efficient operation of the ministries. The budget includes, budget lines for the Deputy Ministry of Tourism and a 14% VAT return to young couples who are buying plots to build their homes. On Monday, both government amendments and other parties’ amendments will be examined by the Parliamentary Committee on Finance. For once more, parties will reduce the state’s operational costs and training expenditure by 5-7%. The amendments will also commit funds amounting to €33m for the Ministry of Finance’s social benefits, including the Estia Scheme. The majority of opposition parties agree with the commitment. However, the Ministry disagrees since they think that if this envelope is not approved by the Parliament, the Scheme’s implementation will be delayed.

DISY-DIKO submit bill on reduction of fuel tax

Despite the government’s disagreement, the leaders of ruling Disy and Diko on Friday submitted a bill that cuts fuel tax by five cents a litre. The proposal tabled by Averof Neophytou and Nicolas Papadopoulos provides for a cut in the tax rate for petrol, diesel, and heating fuel by €0.05 cents per litre. However, Georgiades had voiced his disagreement at the Plenary on Friday, noting that “fuel tax in Cyprus is lower compared with the rest of Europe, while environmental reasons should be taken into account which do not allow the government to reduce this taxation.” He further repeared that the government intends to cut the tax on interest rate from deposits by €45m. The two parties’ bill is scheduled for discussion on Monday.

Intense reactions by opposition after Harris’s speech

The newspaper reports, that Georgiades’ speech on Friday on the budget, prompted the reaction of opposition parties with AKEL arguing that the budget lacks vision, social sensitivity as well as investment in development. AKEL’s press representative Stefanos Stefanou, said that the “2019 budget is a repetition of the previous budgets. The same goes for the government’s announcements, that have proved to be hot air.” He said that 1/3 of citizens do not share the government’s celebratory tone, since they experience poverty, social insecurity and lack of employment protection. He added that the government refuses to take up any political responsibility. Greens party president said that the Minister’s speech was an ode to neoliberalism and added that neoliberalism is the economic theory that put money over people.

GDP and employment increased by 0,8%

Seasonally adjusted GDP rose by 0.2% in the euro area (EA19, by 0.3% in the EU28 and by 0.8% in Cyprus during the third quarter of 2018, compared with the previous quarter, according to an estimate published by Eurostat, the statistical office of the European Union. In the second quarter of 2018, GDP had grown by 0.4% in the euro area, by 0.5% in the EU28 and 0.8% in Cyprus. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.6% in the euro area, by 1.8% in the EU28 and by 3.7% in Cyprus in the third quarter of 2018, after +2.2%, +2.1% and 4.0% respectively in the previous quarter. During the third quarter of 2018, GDP in the United States increased by 0.9% compared with the previous quarter (after +1.0% in the second quarter of 2018). Compared with the same quarter of the previous year, GDP grew by 3.0% (after +2.9% in the previous quarter).

Cyprus to pay second Russian loan instalment in 2019

Cyprus will next year pay the second instalment (€778m) of a €2.5b loan it received from Russia in 2011. The third instalment will be paid in 2020 and the last in 2021, it added. As soon as the Russian loan is repaid, Cyprus will start repaying the €2.7b it borrowed from EU-IMF. Cyprus will pay its first instalment to the EU-IMF, in 2020 and will amount to €38m. The biggest instalments to the EU and IMF will start in 2025 with an instalment of €412m following by €1.01b in 2026, and €1b each in 2027 and 2028. Another €1.05b will be paid in 2029, €900m in 2030 and €1b in 2031. Cyprus’ refinancing needs are estimated at €2.1b in 2019, €2.09b in 2020 and €1.82b in 2021, the newspaper added. n the past three years the government has made early repayments of loans to the tune of €3.7b, capitalizing on the low interest rates on the international markets to issue new debt to pay off more costly borrowing.

Three former Co-op officials to testify again

The Co-op Investigative Committee announce that on 12 December it will conduct an open/public meeting. Former Co-op bosses Erotokritos Chlorakiotis, Marios Clerides were called to testify for a second time as was Takis Taoushianis, former President of the Co-op Board of Directors. The Committee underlines that this meeting will be open to the public, but recording, videotaping or photographing the session is prohibited.

Third appeal in Focus case rejected

The Nicosia Assize court rejected an appeal by the defence attorney on the Focus case for the evidence that was retrieved from Michalis Zolotas’s office. For this legal point, a third trial within a trial had been conducted, but the appeal ended up being rejected. Specifically, Michalis Zolotas defence attorney had supported that the evidence was a private communication between the suspects. The Court decided that each and every one of the pieces of evidence (letters, emails) did not constitute a private communication but were exchanged in the professional framework.

Three thousand passports sold to investors and family

Haravgi reports that Cyprus sold 2996 passports to investors and members of their families between 2014-2017, according to Ministry of Interior data. The passports were given to investors from Asia, Eastern Europe, European and Arab countries. In the meantime, the newspaper reports that the Ministry of Interior announced that it will conduct a tendering procedure in order to choose a firm that will conduct enhanced and detailed controls of the investors that apply for a Cypriot citizenship, in the framework of the Cyprus Investment Programme. The Ministry will hire up to 3 firms with one-year contracts and possibility to extend those for 2 more years. This move aims to reassure international organisations that criticise Cyprus for selling passports and accuse it of money laundering.

Invest Cyprus’ activities in London

The newspaper reports that in the last few days, the Cyprus Investment Promotion Agency (CIPA/Invest Cyprus) has been involved in multiple actions in London with its participation in conferences and targeted events. Invest Cyprus and other relevant state bodies organised a conference aiming to attract investment in renewable energy sources in Cyprus, they participated in a big exhibition organised by film production company Focus and promoted the country as a shipping destination at an event attended by important businesspeople of the industry. Deputy Minister of Shipping, Natasa Pilidou also participated in the event.

Sergey Lavrov statement on Cyprus problem

The permanent members of the United Nations Security Council should join efforts to develop a final solution concerning the external aspects of the Cyprus problem, said Russian Foreign Minister Sergey Lavrov.

Russians afraid of American descent

Politis provides an extensive analysis of Russian Maria Zakharova’s statement that according to the paper constituted a veiled threat against Cyprus. Zakharova on Wednesday warned authorities in Cyprus not to allow the U.S. military to deploy on their territory, saying such a move would draw a Russian reaction and result in “dangerous and destabilizing consequences” for the island. The authors attempt to deconstruct the statement by saying that it is essentially rooted in the Russian concern that Americans will attempt to further exert their influence on Cyprus. The newspaper argues that Zakharova’s statement is mainly a product of the Russian investors’ eviction from Cyprus as well as the increasing US influence on the island (financial pressures and the ExxonMobil investment). They argue that there has been American and EU pressures on Cyprus to be re-integrated in the Western hemisphere. This has been evident, as the newspaper argues, in FinCen’s recommendations to the Cypriot authorities that Banks and bankers have been laundering money, the US demand to close all “shell companies” and the freezing of accounts held by Russian companies in Cyprus that are affected by the embargo, among others. The authors argue that the this follows a rather peaceful period of cohabitation of Russian and American interests on the island, whereas in the rest of the world there had been a revival of the Cold War. This had been evident, as the authors argues, in the shareholder structure of Bank of Cyprus (Vekselberg and Ross being the main shareholders) and now in the structure of Hellenic Bank (both before and after the Co-op absorption). The main shareholders of Hellenic Bank are the US fund Third Point and the Belorussian Wargaming. The authors argue that this Cypriot ‘experiment’ may have been successful if the Manafort case had never arisen.

Russian deposits reduced by €5b

The article reports that more than 20.000 accounts held by foreign-born individuals have closed since 2014, when the directive to combat money laundering had been instituted. Russian clients’ accounts in the portfolio of the banking industry has been halved compared to 2014. In 2014, Russian deposits in Cypriot banking institutions were 9.9% of the total deposit, while in November 2018 they made up just 5.5% of total deposits. The article reports that this means that there has been a €5b decrease in deposits. The article reports that many Russian companies based in Cyprus are contemplating leaving the island while companies registered in Cyprus have been reduced by 50%. Bank of Cyprus gave the newspaper its updated information on the closing of Russian clients’ accounts. According to this information, from 2015 to November 2018, the banks has closed 7.615 accounts. At the same time the Bank has not approved the opening of 4.145 new accounts from 2015 to November 2018. Furthermore, its turnover has been reduced by 4.4b. The article reports that Hellenic Bank is at the same levels, having closed 10.000 accounts from 2013 to date. According to Hellenic Bank from 2014 to the end of 2017, depositors from high-risk countries have been reduced by 45%, making up less than 15% of total deposits of the bank. Concerning incoming payments from high-risk countries, these have been reduced by 50% and now make up less than 3% of the bank’s total payments. As it concerns International legal entities, these have been reduced by 55% since 2014. Additionally, the bank has doubled its staff that works in regulatory compliance since 2014. Professional associate intermediaries have been halved since 2014, while there is continuous investment in new systems and in the training of Hellenic Bank’s personnel dealing with international banking and regulatory compliance. Concerning the revenue, the bank has lost in this framework, it amounts to €20m since 2014. It is underlined that the information, the bank has submitted do not concern the deposits it is managing after acquiring the Co-op’s assets. HB received 9.7b in deposits in the framework of the Co-op deal. The bank’s Chief Compliance Officer Matthaios Charalambides said that the bank follows strictly the supervisors’ directives on money laundering on the basis of AML directives. He reassures that all controls are being completed and that not client is treated differently on the basis of nationality or country of origin. What they are examining is whether the client meets the bank’s client acceptance policies.

“Sale of loans is being established”

Interview with Ioannis Matsis, CEO of Hellenic Bank who talks about the future of the Cypriot banking sector and the course that the Bank will follow in the future. He reassures that loans sales have been established and that they will continue being an important tool for dealing with NPLs. He says that even though the banking sector “got rid of” billions of euro worth of NPLs, he underlines that NPLs continue to be leading the way, as far as problems go. The bank’s CEO makes it clear that the bank needs to chase a new sale of NPLs, after the one it had proceeded to in the beginning of 2018, which concerned a portfolio of non-retail, non-performing loans worth €144m, to the B2Kapital Cyprus Ltd. Apart from the sale of loans, the bank intends to use the whole range of tools offered, in order to reduce the problem organically. The high level of provisioning, allows a more relaxed management of the NPLs problem, compared to previous years. He estimates that interest rates have reached the lowest possible and will not be further reduced. He further supports the opinion that technology does not forgive those who do not follow it and do not prepare the ground for its implementation.

SOS - We are backsliding

The president of the Fiscal Council, Demetris Georgiades and the General Director of OEB, Michalis Antoniou expressed their intense concerns with regards to the increase of the public sector’s work force as well as the government’s public sector expenditure which is comparable to pre- financial crisis levels (13.2% of the GDP). On his side DISY’s MP Marios Mavrides argues that our first priority should be the public service’s modernisation, which as he notes, currently does not meet the service needs of citizens and businesses. Antoniou warns of bad financial practices that are re-emerging, while he argues that the government’s social measures are not essentially socially-oriented.

IMF: Brexit consequences minor for Cyprus

Kathimerini reports on an event organised by the Economist in London on 5 December, entitled “CYPRUS: Interweaving extroversion with aspiration”. Participants included the Father of the House of Commons in UK, Kenneth Clarke, the Minister of Finance, Harris Georgiades, the Chairman of the House of Representatives Committee on Finance, Averof Neophytou, the CCCI Chairman Christodoulos Angastiniotis, the Board member of Invest Cyprus and Executive Director at PwC, Kyriacos Kokkinos and the Cyprus Securities and Exchange Commission Chairwoman Demetra Kalogerou, among other businesspeople and representatives of multinational companies. The article focuses on the IMF Executive Director’s statement, who said that Cyprus will not be seriously affected by Brexit, noting that even if there is a no-deal Brexit, the effect on the Cypriot economy will be only marginally negative and therefore easy to handle. EBRD representative Peter Stanfey, said that the Cypriot economy’s recovery has been impressive and that while the banking sector is still rather big, it has been reduced to a manageable size.

Developments in the Cypriot economy in the centre of discussion

As above. The article reports that the significant progress Cyprus has made in improving its business environment, restoring its economy’s competitiveness and attracting foreign investments was at centre of discussions at a conference that was organised by The Economist on 5 December at the London Stock Exchange. The conference, entitled: “Cyprus: Interweaving extroversion with aspiration”, was supported by PwC Cyprus and Bank of Cyprus as platinum sponsors. In his address, Harris Georgiades said that due to the efforts of the people, our country had four successful years of recovery and is one of the fastest growing economies, while growth is expected to remain above 3% annually for the next three years. But he added, “We cannot be complacent though; we should acknowledge that there is more to be done...” PwC Cyprus Partner, Head of International Markets Marios Andreou, said: “Europe and the Eurozone are currently on a steady path to recovery, following a protracted period of austerity that was imposed on many parts of Europe. The EU must intensify its efforts to create a new vision, with emphasis on creating a more competitive and resilient economy, but also building a cohesive and inclusive society for its citizens.”

Who supports the Estia Scheme?

Interview with DISY MP Marios Mavrides and AKEL MP Aristos Damianos, concerning the highly controversial Estia Scheme. Mavrides argues that the Scheme is a smart plan that will help alleviate the burden on NPLs on the Cyprus economy and argues that the Scheme’s advantages will be greater than its cost. He however, considers inconceivable the fact that borrowers who have up to 80% of their debt’s worth in deposits and assets are eligible for the Scheme. He says that it is unacceptable that tax-payers are called to cover these peoples’ loans, while they themselves are struggling to pay their debt instalment or rent. Damianos says that the Scheme was not made for the vulnerable borrowers, since he says that thousands of vulnerable and consistent borrowers will not be eligible for this scheme, which essentially benefits the banks. He further says that the fact that there will be no Estia Scheme 2, rewarding consistent borrowers makes the Estia Scheme doubly unfair.

Increased development and social policy expenditure in 2019

Simerini reports that in 2018, development and social policy expenditure will be increased compared to 2018, the 2019 state budget. Specifically, according to information that the newspaper has acquired, for 2019, €859,6m has been budgeted for development compared with €845,9, in 2018 thereby marking a 1,7% increase. According to the MoF, the biggest part of development expenditure will be absorbed by independent offices with €210,8m due the transfer of European programmes implementation to a central office. The Ministry Interior follows with €209m, followed by the Ministry of Education and Culture with €178,4m. At the same time, social policy expenditure has recorded an increase with €966,2m in 2019 compared with €897,7m in 2018, thereby recording a 7.1% increase.

Without a financial envelope there can be no “Estia”

The Director of the Financial Stability Directorate, Andreas Charalambous said that the “Estia” scheme will help banks as well as borrowers. He at the same time notes that in the case where the Parliament does not pass the €33m envelope included in the 2019 state budget, Estia cannot be implemented. At the same time, Mr Charalambous notes that soon applications will be submitted from borrowers who wish to be integrated in the Scheme. He tells borrowers that applications will be submitted only one time and warns that if borrowers do not keep their obligations, they will depart from the Scheme and their loan will return to initial levels. He also said that if the borrowers who are integrated in the Estia Scheme eventually get better salaries or if their dependents are reduced, the state will continue to subsidise 1/3 pf their loan instalment. He says that the Scheme, cannot be possibly readjusted every 3 or 6 months.

Additional expenditure of €300m in 2019

Phileleftheros reports that the government will have an extra €300m to spend in 2019, compared to 2018. It has set aside €33m for Estia, while the expenditure for social policy measures amounts to around €100m for 2019. From this, €33m will go to the Estia Scheme 2, assisting consistent borrowers with their interest. It also includes a €45 reduction in the tax on deposits. €25m will go to the Solidarity Fund for depositors who lost their money in the 2013 bail-in. The government’s payroll will also be increased by 5% in 2019, corresponding to €100m. There will also be an increase in the money that low-paid pensioners receive, corresponding to €50 for each pensioner per month (a total expenditure of €22m). Furthermore, there will be a 10% increase in the rental subsidy for the disabled and displaced people.

€290m in loans through EIB

Banks granted a total of 269 loans (worth €290m) to 220 SMEs in Cyprus, in the framework a European Investment Bank scheme. The EIB finances SMEs in collaboration with Cypriot banks that get a loan from the organisation for this purpose. According to an evaluation study that the EIB conducted in collaboration with the Ministry of Finance, from 2014-2017, the 220 SMEs that received funding from banks, proceeded to investments amounting to €440m.

Many candidates for Central Bank Governor post

Political discussions concerning who will be the next to take up the Chief of Central Bank post, have started. The various names proposed by the different political actors have reached the Presidential Palace. Discussions are also taking place for the second executive member of the Board of Directors of the Central Bank, which remains vacant. Current Central Bank governor Chrystalla Georghadji’s term ends in April 2019. Anastasiades sends the message to his partners that the government cannot make a wrong choice, since Cyprus has paid enough. The annual salary of the Governor amounts to €152.000, while the executive member of the Board gets €118.000 per year.

More changes to Cyprus Investment Programme if necessary

Politis reports that the Ministry of Interior announced a tendering procedure in order to choose up to three firms that will conduct enhanced and detailed controls of the investors that apply for a Cypriot citizenship, in the framework of the Cyprus Investment Programme. This is according to the paper, one of the many immediate responses that Cyprus want to provide in relation to the pressures it has come under for the Cyprus Investment Programme. The chairman of the Cyprus Chamber of Commerce and Industry (KEVE), Christodoulos Angastiniotis revealed to Politis radio, that if necessary, more changes to the Cyprus Investment Programme will be made, in order to tackle EU distrust, enhance the trustworthiness of the programme and protect investors.

Estia: €2.25b to BoC-Hellenic-KEDIPES

Bank of Cyprus, Hellenic Bank and state asset management company KEDIPES have €2.25b worth of loans that meet the criteria for the Estia plan. Within the week, they are expected to sign an MoU with the state agency that will be in charge of implementing Estia, so that the submission of applications can officially begin. BoC, HB and KEDIPES have set up call centres and online information centres. Hellenic has a call centre, a special email as well as a post box where people can communicate in writing. BoC has 4,500 loans totalling €1b that are eligible for the Estia plan; HB 900 loans worth €250m and KEDIPES over 7,000 loans totalling €1b.

Restructuring plans for those who are not eligible for the Estia plan

BoC, HB and KEDIPES are in the process of preparing restructuring plans for those who are not eligible for the Estia plan. A BoC executive told Haravgi newspaper that the bank is ready to discuss and examine such cases and offer alternative restructuring solutions; such as for example gathering all loans together under one and preparing a repayment plan. Also, Hellenic has sent a letter to customers that are not eligible for Estia that it is willing to offer alternative solutions. And a KEDIPES executive told Haravgi that it is prepared to offer other restructuring solutions too, if the borrowers are willing to reach an agreement.

Party manipulations with Estia in the background

The House Finance Committee will begin examining scores of amendments by the political parties, but also recent amendments by the government, to the 2019 state budget in today’s session. Stockwatch reports that the parties will seek alliances to achieve the changes they are seeking to make to the Estia plan. The government has submitted a series of last-minute amendments to cover expenditures of various ministries, which include the scheme to return 14% VAT to young couples purchasing land to build a primary home, which was approved last Wednesday by the Cabinet. Among the parties’ most important amendments is their expressed intention to vote against releasing the funds for Estia, to ensure that parliament has more control over the way in which the budgeted €33m will be spent.

Changes to Altamira’s terms

The new Board of Directors of KEDIPES is expected to set certain prerequisites for Altamira to continue – or not – managing the Cyprus Co-operative Bank’s red loans. The transitional KEDIPES board, which comprises Finance Ministry technocrats, believes it is imperative to change Altamira’s contract as things have changed since it was first signed with the former CCB. Sources with knowledge on the matter told Stockwatch that the new board will assess the collaboration with Altamira so far and the work it has done, and provided that its management agrees, they will change the terms of the initial contracts and Altamira can continue to manage the CCB’s NPLs. If it doesn’t, then a new manager will be sought through an open tender, once the cost of ending the cooperation with the Spanish company has been taken into account. Among those participating in Altamira’s share structure is the Apollo investment fund, which Bank of Cyprus has sold €2.8b of red loans to.

ETYK’s contacts with KEDIPES

SUMMARY: Bank employees’ union ETYK met last week with the administration of KEDIPES. According to a circular by ETYK, the company’s new organisational chart was discussed, with KEDIPES telling the union that the new chart is temporary until the relevant study is completed by an independent firm. ETYK said the company promised that it that corrective action would be taken for any problems that have arisen, while it also revealed that they discussed the issue of renewing the collective agreement, the negotiation for which will begin soon.

Commission hints at banks’ need for capital

The European Commission has said in its report on Cyprus that the profitability of the Cypriot banks is weak and they will need more capital, adding that the banks are already planning their next moves to increase their capital in the near future. The EC said the banks’ capitalisation, liquidity and borrowing capital levels were under pressure. The average CET1 ratio dropped to 14.2% in June 2018, from 14.9% the previous year, due to recurring losses. The total capital index dropped by 80 units to 15.5%. While the CET1 ratio remains higher than the EU average of 13%, the Cypriot banks must maintain a higher capital index in order to absorb the crises arising from the poor quality of their assets, said the EC.

Three testimonies at the Committee of Inquiry

The Committee of Inquiry for the Co-op will hear the testimonies of former CCB executives Erotokritos Chlorakiotis, Marios Clerides and Takis Taousianis on 12 December.

The wager of the Nicosia Mall and Bank of Cyprus

From the moment that Bank of Cyprus decided to invest in the completion of the Nicosia Mall, its operation was considered a given, Phileleftheros newspaper reports. However, the Bank had been sceptical in the past, in relation to the project, since the consecutive postponements of the project and the general uncertainty surrounding the project reduced interest from retailers. Furthermore, the fact that the Mall was rather removed from the centre of the city, was another issue for BoC. However, this may be a positive thing since in the area that the Mall is located, there is not a lot of traffic. The BoC finally decided to invest in the completion of the project (which came under the bank’s management in exchange of the previous investor’s debt), since it seemed that investors would more likely be interested in this development if it was finished. With the total cost of the investment amounting to €150m, the BoC is looking to sell at the best possible price.

CBC – Portrait of the new governor

Ten years of government interventions in the work of the Central Bank Governors are reflected in the statement by current CBC Governor Chrystalla Georghadji to the Co-op Inquiry last week, that she was too scared to investigate the loans of politically exposed persons, Politis newspaper reports. It interviews a number of people with knowledge on how the CBC operates, in an effort to draw up a portrait of how the new Governor, who is expected to be appointed this April, should be.

Lucrative assets but also plots in the haircut fund

The list of 14 assets that will be conceded to the Solidarity Fund to compensate those who suffered losses in the 2013 haircut on deposits include lucrative plots of land, but also plots without special commercial value. It has not however become clear yet how these assets will be used or who their final beneficiaries will be; namely whether it will just be those who suffered losses on their deposits, or whether it will also include those who suffered losses on securities and shares. It is also yet unknown who will take priority in the compensating process. The 14 assets are of a total area of 3,145,250m². Five of the aforementioned assets are included in the list submitted by the government in 2017 to undergo foreclosures. These include two lucrative plots of land in Geroskipou, next to the Archbishopric’s development. One is 49,498m² in the tourist zone, while the other is 99,803m² which is mostly in the tourist zone, though part of it is also in a protected area.

The ‘day after’ will be difficult too

This month’s visit by the UN Secretary General’s Cyprus envoy, Jane Holl Lute, to Cyprus is not a precursor for a resumption of the peace talks or a new Conference on Cyprus, Phileleftheros newspaper reports. The puzzle that she and UNSG Antonio Guterres must piece together is particularly difficult, and they need to be careful so as not to lead the effort to solve the national issue to a permanent deadlock. As the paper points out, the Turkish side has clearly indicated that it is in no rush to partake in a new Conference or Crans-Montana type negotiation any time soon. It adds that the fact that Lute and Turkish FM Mevlut Cavusoglu haven’t met yet should send a message to those who are indirectly or directly trying to exert pressure on President Nicos Anastasiades. Any moves from Turkey should be expected after its municipal elections in March. As for the other two guarantor powers, Greece is facing internal unrest which could lead to a new election, while the UK cannot realistically be expected to tackle the Cyprus problem any time before its withdrawal from the EU in March. All that can be done for the time being, says the paper, is for the bicommunal talks to resume, as there is plenty left to discuss; though Turkish Cypriot leader Mustafa Akinci has stated that he does not intend to partake in such talks again.

Real estate agents looking for solutions for rents issue

The problems that the real estate sector is facing, the possibilities and challenges, were tabled at the general meeting of the Cyprus Real Estate Agents Association (CREAA) on Sunday. The president of the Parliament, Demetris Syllouris, were scheduled to address the conference, as was the President of the Cyprus Chamber of Commerce and Industry (KEVE) Christodoulos Angastiniotis, and the president of the CREAA, Ilias Athanasiou. The real estate sector has been revived, while the consequences of recession have started making their appearance in the market. The prices of rentals have skyrocketed due to the lack of apartments, while the tenants are fighting landowners due to the rent increases the latter want to impose.

“Warehouses” turned into holiday houses

The Greens Party-Citizens Alliance, reported the construction of a building in Akamas, to the Paphos local authorities. The building which is under construction is located in the Rahadaes area and the plot is classified under exceptional natural beauty town-planning status. It seems that a license was granted by the local authorities for the construction of a warehouse, without taking into consideration the environmental consequences.

Beach management chaos

Phileleftheros argues that the non-ratification of the Barcelona Convention, is due to the fact that beach management brings a lot of revenue and that there are various affected interests. Even if in theory, the Convention obliges the Republic of Cyprus, there is still anarchy with regards to beach policy, since there is not a single policy for all beaches. At a discussion at the House Interior Committee, Greens MP, Charalambos Theopemptou said that the policy stipulating that 50% of the beaches should remain vacant, is not implemented by many municipalities. He also supported that the sunbeds distance from the sea that is foreseen, is not implemented either. A representative of the Audit Office of the Republic, reported that there have been cases of violation of the law, with structures being built inside the beach protection zones. However, no measures were taken for these violations. A representative of the Environmental Department said that article 8 of the protocol concerning building on beaches is enforced and stipulates that buildings are built at a 100-yard distance from the beach rather than the greater 100 metres specified in the Barcelona Convention.

Cyprus Tourism Organisation dancing to its own tune

Article by Phileleftheros reporter Eleftheria Paizanou, who says that the Cyprus Tourism Organisation is living in a world of its own, as even though the countdown has begun for it to be dissolved and replaced by the Deputy Ministry for Tourism on 2 January 2019, it has been hiring people and giving promotions. The paper has received complaints that the CTO held exams a few months ago to hire tourism operators, before employing non-transparent procedures to proceed with the subsequent recruitments. All these recruitments and promotions are binding for the Deputy Ministry, which will be appointed in the coming days. The author says the cherry on the cake came a few days ago when Cabinet approved a generous voluntary redundancy package for CTO employees, with compensation of up to €100,000. She says the scheme is the same as the one given to the Ports Authority when the commercial activities of Limassol port were privatized with the maximum departure percentage being 40%.

Limassol a year-round destination

The Limassol Tourism Development and Promotion Company has started a series of actions and campaigns, in order to gain an even bigger piece of the tourism ‘pie’, as a year-round destination as well as for special interest tourism. The company is promoting Limassol in the British, Russian and German markets. As the Company’s head Maria Stylianou Michaelidou says, they want to establish Limassol as a year-round destination. According to her, the company’s strategic goals include the promotion of plans and developments in the wider Limassol area, such as the project of the casino-resort, as well as other projects that contribute to further upgrading the tourism product, the effective promotion of Limassol to the countries-sources of tourism and the attraction of quality visitors throughout the year.

Tourism industry can aim for a new record

Politis reports that while this year we had a third consecutive record in arrivals, the CTO does not rule out that the next year will be a positive year for tourism. As the president of the organisation said, for 2019, the outlook is very positive, saying that the sector’s potential will be even greater. As it was reported, 2018 has been crowned as the best year in the history of Cyprus tourism, taking the position of 2017. Specifically, in the first 10 months of 2018, arrivals rose to 3.973.377 compared with 3.408.473 in the same period in 2017 thereby marking a 7.8% increase. Last year’s arrivals had marked a 14.6% increase compared to 2016. Overnight stays at licensed accommodation, reached 14.005.545 in the first 9 months of 2018, marking a 1.8% increase compared to the same period in 2017.

Cooperation agreement between Ayia Napa - Chinese city

The Ayia Napa Municipality considers that their cooperation agreement with the Chinese city Guangzhou, is one if its greatest successes. The Mayor of Ayia Napa, Giannis Karousos went to China in order to attend the World Mayor Conference in Guangzhou, where he met with the city Mayor Wen Guohui, and signed a relevant agreement with the Chinese mayor. The agreement stipulates that the two cities will find ways to collaborate in fields such as economy, trade and tourism, and that the two cities will try to reinforce their contacts and cooperation in fields such as culture and education and deepen the understanding and friendship between the two cities’ residents.

Larnaca Salt Lake…invaded

Politis reports that no measures were taken in order to protect the Larnaca Salt Lake, which constitutes an important wetland. In a joint announcement, the Larnaca Municipality and the local Tourism Development and Promotion company expressed their disappointment and despair about the lack of protection measures for the salt lakes and the continuous disturbance of the migratory birds. As it is underlined, even though they met with the Environmental Service and the Ministry, no measures have been taken in order to safeguard the protection of this important wetland. They say that almost every day, people enter the Salt Lake even though there are signs warning them not to.

The land of Hadjipetris

Haravgi newspaper criticises state officials for losing out on the designation of Cyprus as the country of origin for halloumi cheese. It says it will probably be blamed on a random officer or messenger; the same one that was blamed for the Cyprus Co-operative Bank, Cyprus Airways, the police, the prisons, the privatisation contracts for Limassol port and all the other scandals that Cyprus has witnessed in the past few years.

Eurogate: Investing in the future of Cypriot shipping

Eurogate Container Terminal Limassol welcomed students from the Cyprus University of Technology to the company’s premises, giving them a tour and allowing them to observe Limassol port’s container terminal operations first hand. In a press release, the company said this was part of its long-standing strategy to upgrade Cypriot shipping, including its human resources and the industry’s future professionals.

New Navtex war in East Med

Turkey has issued two Navtex notices in response to the announcement of the Cypriot authorities warning that new research by the Barbaros vessel are illegal as they are taking place in the continental shelf of the Republic of Cyprus. In its bid to reaffirm its claims that part of the Cypriot Exclusive Economic Zone belongs to Turkey, it issued its first Navtex on Thursday, for illegal seismographic research up until 8 December in the Cypriot EEZ. The Republic of Cyprus responded with its own Navtex claiming that the Turkish notice was illegal and within the Cypriot EEZ. Turkey responded on Friday morning by issuing a new Navtex, saying that Barbaros and two accompanying ships would be carrying out seismographic surveys in Turkey’s continental shelf, in accordance with International Law.

Students at Limassol port

Eurogate Container Terminal Limassol welcomed students from the Cyprus University of Technology to the company’s premises, giving them a tour and allowing them to observe Limassol port’s container terminal operations first hand. In a press release, the company said this was part of its long-standing strategy to upgrade Cypriot shipping, including its human resources and the industry’s future professionals.

Announcement

The Cyprus Ports Authority announced on behalf of its Board of Directors that any official decisions or announcements are always publicised, and if they are voiced orally, then this is done through the Board’s Chairman. Any other positions or views expressed by the CPA Board’s vice chairman or members are personal views of those individuals and do not represent the Authority, it said.

Cyprus-US ties enter new era

Foreign Minister Nicos Christodoulides tells Simerini newspaper in an interview that the signatures for EastMed are expected to drop in early 2019. He also adds, among other, that he believes that the embargo on Cyprus will soon start being lifted gradually by the American Congress, which is a clear reflection of the upgraded Cyprus-US ties.

Addictions, a modern nightmare

When we refer to addictions, we usually think of drugs. Unfortunately, addiction is not just drugs but also alcohol, gambling, smoking, video games, social media. Addictions are a time bomb that threaten any house, family, person. Cyprus is the third country in alcohol consumption under 17 years old among 48 countries in Europe. As far as lucky games are concerned, 75% states actively participate in lucky games. The use of drugs show an increasing tendency in the use of cannabis, new forms of drugs such as crystal meth, as well as the use of cocaine and heroin. Every day there are reports of circulation of illegal substances in schools, such as smoking cannabis and cigarettes.

Greek businesses turnover

The 500 most profitable companies in Greece noted a significant improvement in their turnover in 2017 based on the analysis of balance sheets that ICAP carried out in the frame of the special edition of “Business Leaders in Greece 2018”. This data shows that in the general economic environment, many top Greek businesses, taking advantage of the long-term efforts of their adjustment in the market conditions, have shown endurance and during the last year were distinguished in their performance. According to ICAP data, the total turnover of the 500 most profitable companies was increased by 9.5% in 2017 reaching €91.02b. It is worth noting that 92 companies of this year’s rank are distinguished as “Business Leaders in Greece” from 2008 to 2017. The five top companies in the industry based on their operational profits in 2017 were Hellenic Petrols, Motor Oil, Papastratos, Mutilinaios and ELVAL/ HALKOR. In the trade sector the top 5 are AB Vasilipoulos, Jumbo, Duty-Free shops, Sclavenitis and Mashioutis.

Bins at Larnaca seaside

In order to solve the pollution problem from green garbage bins on pavements, 64 bins will be placed at the coast of Larnaca. The garbage bins will be placed in 16 locations at Mackenzie beach, T. Mitsopoulos and Finikoudes avenues. At Larnaca Municipality they believe that with their installation, the problem of current green bins pollution will be solved for good, as well as the problem of bad smell, which is intense during summer months. The installation of bins will begin in the beginning of 2019.

Big players in passport sale to foreign investors

Service providers involved with the ‘Cyprus Citizenship Investment Scheme’ offering citizenship to foreign investors and members of their families are doing very well. In the last five years, Cyprus issued more than four thousand citizenships to foreign investors and members of their families. Approximately 85% of applications submitted are being approved by the government. More specifically, in May 2013 until August 2018, 2,389 applications from investors were submitted. In the last years there is an increase in the submission of applications. Specifically, in 2013, 77 applications were submitted, while in 2014 they increased to 306. In 2017 they increased to 696 applications, while this year they are expected to reach a record level since in the first eight months 521 applications were submitted.

Private medicine remains a thorn for NHS

Agreements were reached during the meeting that took place last Thursday at the Health Ministry between the Health Insurance Organisation, the Cyprus Medical Association and the Minister of Health regarding the NHS. The meeting took place after the intensive dialogue between the CMA and HIO in order to bridge the gap between the two sides. Despite the fact that the CMA agrees with everything that the Health HIO has proposed, it still insists on its position to freely practise private medicine in the NHS. In addition to this, doctors are expected to answer in writing within the next days to the HIO’s final propositions. Doctors agree with two of the HIO’s three proposals: for private doctors’ salary to increase by 20%, and for the price unit to be guaranteed.

Doctors warn they will turn to justice

Doctors warn that they will turn to justice in order to practise private medicine in the NHS. Despite the fact that the Minister of Health has clarified that the doctors’ requirement to practise private medicine in the System cannot be satisfied, the Cyprus Medical Association representatives stated that they will turn to justice claiming this right. The registers for doctors’ registrations in the NHS will open in January, while those for beneficiaries will open a month later.

Households cannot take it anymore

Haravgi reports that despite the high prices, people’s salaries remain low. According to the numbers, electricity bills are 34% higher in comparison to last year. Cyprus records the biggest increases in the EU, compared with the rest of the countries which record an average reduction of 1.5%. In addition to this, the general cost of Housing, Water, Electricity and Gas rose by 11.8%, while the prices of Food and non-alcoholic drinks rose by 2.9%. Even the Education Index rose by 3%, while for Hotels and Restaurants it increased by 2.4%. From 1 January, the employees’ contributions to the social insurance fund will increase by 0.5%, while from 1 March contributions to NHS will begin at 1.7%.

Medication as a social commodity

Phileleftheros newspaper reports that medication besides its commercial value has a social, health and moral value and this is why a fair cost distribution is a must, because vulnerable groups find it difficult to overcome the individual burden of medication cost. Medication, treatment and hospitalisation are among the critical matters the state is facing and this is why modern political will is required due to changes taking place in demographic conditions, new biomedical technologies and information. The contribution and participation of pharmaceutical technology l to new pharmaceutical treatments is crucial.

Medication as a social commodity

Phileleftheros newspaper reports that medication besides its commercial value has a social, health and moral value and this is why a fair cost distribution is a must, because vulnerable groups find it difficult to overcome the individual burden of medication cost. Medication, treatment and hospitalisation are among the critical matters the state is facing and this is why modern political will is required due to changes taking place in demographic conditions, new biomedical technologies and information. The contribution and participation of pharmaceutical technology l to new pharmaceutical treatments is crucial.

GlaxoSmithKline acquires Tesaro

Tesaro Inc’s share rose to 58% since the biopharmaceutical company agreed to buy it off from GlaxoSmithKline against $5.1b. According to the agreement terms, Glaxo will pay $75 in cash for each Tesaro share.

Chinese market attracts Cypriot businesses

An increasing number of Cypriot businesses are turning towards China’s market, while significant investments from China are recorded in Cyprus. Pharmaceutical products, alcoholic drinks, fruit, vegetables and oil are exported from Cyprus to China with exports rising to €37.5m for 2016 and €40.4m for 2017. From this amount €22m concern pharmaceutical products exports. As far as China’s product imports it is worth noting that they doubled in 2016 in relation to 2015 (€240m) and rose to €547m, while in 2017 there was a new increase (€588m) that is mainly attributed to the importation of navigation equipment.

Israeli professor expresses admiration for CING

Israeli professor Michel Revel, of the Molecular Genetics Department of Weizmann Institute of Science, is in Cyprus to give a lecture on the recent developments of the rare disease amyotrophic lateral sclerosis (ALS). Professor Revel has received the Medicine Israeli Award and the Emet Award. According to the Cyprus Institute of Neurology and Genetics, professor Michel Revel visited the Institute and expressed his admiration of the Institute’s activities and its uniqueness in combining research, services to patients and training.