Cyprus Press Review - 4/11/2019

The next day for the collective agreements

Phileleftheros reports that 2019 was a difficult year for the labour market and the collective agreements. Several major sectors of the economy found themselves before the Minister of Labor for renewing their collective agreements. 2019 might have perhaps been a difficult year, however, the first months in 2020 are expected to be just as crucial for the labor market. A major front that of the banks’ remains unresolved, while the banks appear determined to take control of the situation and find solutions to reduce their labor costs. Bank of Cyprus has already completed a voluntary separation scheme while Hellenic Bank has made salary increases on the basis of performance ratings without ETYK's consent.



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The state-owned Cyprus Asset Management Company (KEDIPES) has announced the position of Chief Executive Officer for a four-year term with the right to renew for four years. The deadline for applications is 17 November. Deloitte's advisory team undertook the process of evaluating and selecting the candidates for the post.



They gain access to borrowers’ banking information

Minister of Finance Harris Georgiades announced that the Ministry of Finance is preparing a new bill amending the current buying-selling and related facilities law. Minister of Finance notes that the purpose of the new bill is to extend the powers of the Central Bank to gain access to the borrower’s banking information in order to be able to assess their credit strength and to provide viable restricting solutions to them.



AKEL’s silence on the Ukranians

Politis reports that it is impressive that though AKEL is making so much fuss about the naturalizations of the Cambodians, it has completely gone silent on the two Ukrainians who laundered $ 5.5 billion through Cyprus, money embezzled by Privat Bank and loaded to the citizens of Ukraine as debt. Apparently, and there is a good explanation for the silence.  The passports were given to the Ukranians by the government of Christofias and theregore it would not do any good to fuss around for them.



Attracting money to the country is not wealth

In an opinion article, Economist Savvakis Savvides says that we are witnessing all over again, repeating the same mistakes of the past, claiming that we are doing it to save the society and the economy. Mistakes of the past are: attracting money to the country is not wealth, private debt and NPLs, saving the banks at any cost. History repeats itself with the same protagonists. And so, we have casinos, passports and skyscrapers, Cypriot Hollywood, camouflaged bail-outs such as that of the Co-op Hellenic deal and many more.

 

A look at the week that passed: Even most well-off families have lost property to the banks

Phileleftheros reports that even the most financially well-off families – middle class and above – have had difficulties paying their banking obligations. This is demonstrated by the properties acquired by REMU of BoC and Altamira, which is managing the properties of the former Co-op and APS of Hellenic Bank.



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Plots on sale for very cheap

Phileleftheros reports that while a few years ago, buying a plot or a small piece of land for €500 or €1,000 had been inconceivable, today the properties accumulated by BoC’s REMU and Altamira, which manages the properties of the former Co-op, show that someone can buy a small plot at a very low price (3-digit numbers). Of course, there are plots that cost several thousands of euros and are larger and in more privileged locations. In the case of APS of Hellenic Bank, there are many plots up for sale but they are larger and more expensive. Phileleftheros’ article goes on to provide a detailed account of the properties sold by BoC and Altamira at very low prices, and mentions that APS have some plots for sale but the majority of them are not too cheap and some don’t even mention a price. There is a plot in Agridia for sale for €840 and a field (171sqm) in Ayios Therapontas for €3,500.



Plenty of loans for big enterprises, fewer for SMEs

Half of all new loans ended up in conglomerates, while financing towards households and SMEs is very limited. As shown by Central Bank data, between January-September, €2.52b worth of new loans (except loans for debt restructuring purposes) were granted. However, out of this total, €1.23b loans (49%) went to very large enterprises as they are loans amounting to over €1m each. Conversely, loans to smaller businesses (below €1m each), stood at €330.5m or 13.1%. Household loans stood at €953m or 37.8%.



2.13% interest rate for housing loans tempts prospective home owners

In their effort to gain new clients in a period of economic recovery and excess liquidity, the banks are launching several new schemes in the market for construction or renovation of homes or apartments or purchase of a plot for immediate construction. The housing loans in the market have low interest rates, a grace period, low instalments and a big repayment period. The housing loan can cover up to 80% of the property’s purchase value to acquire a first house and up to 70% for the purchase a second property. The terms include a repayment of equal instalments, which can even amount to less than €300. The principal debtor’s age must not exceed 65-70 years old. The maximum repayment period is 30-40 years and the minimum 10-15 years. The banks give a grace period of up to two years after the first loan disbursement as well as the possibility of additional credit facilities to cover personal or consumption loans. According to Central Bank data, the interest rates of housing loans are at historically low levels. The interest rate for housing loans was reduced to 2.13% in the end of September, with the total annual percentage fee standing at 2.84%.



Centres of Excellence supported by the state

The current and future activities of 6 Centres of Excellence, funded by the Teaming programme of the EU for Research and Innovation – Horizon 2020 were presented in a special summit organised by the Chief Scientist for Research and Innovation, Kyriacos Kokkinos. The event was organised in cooperation with the Directorate General for European Programmes, Coordination and Development and also presented the duties and procedures of the various public service departments, with a view to determine an operational framework for support and cooperation. The office of the Chief Scientist will serve as a mediator in this effort. The Chief Scientist and the Centres of Excellence held a series of meetings before this initiative, in order to record the common needs and challenges they are faced with.



He was “baptised” a Cypriot with the blessings of the Archbishop

Politis has revealed today that the person, who convinced the government for the quick naturalisation of the Malaysian Jho Taek Low, who is wanted internationally for large-scale frauds, is the Archbishop of Cyprus Chrysostomos. The Archbishop sent out at least two letters to Socrates Hasikos asking for the naturalisation of the Malaysian, who supposedly would discuss investments on church land. Jho Taek Low came into Cyprus, was granted the Cypriot passport and disappeared after investing €5 million for the purchase of a villa in Ayia Napa. This man is wanted by half the planet for a huge financial scandal in Malaysia with links in the US and other countries. It will be interesting to see how the Archbishop; the government and the regulatory authorities will respond on the new national international humiliation for the Republic of Cyprus.



Environmental study into noise pollution

The operator of the container terminal at Limassol port has taken on the responsibility of carrying out an environmental impact study with the primary objective of coming up with measures to reduce noise pollution, following an intervention by Transport Minister Vasiliki Anastasiadou. After receiving a letter by a group of residents complaining about how the noise pollution is affecting their quality of life, as well as actions by Green Party MP George Perdikis, the minister invited the port’s container terminal operator and Cyprus Ports Authority to a meeting in order to conclude on measures that need to be taken. The residents complained that there are no appropriate measures in place to limit the noise pollution, which is an issue on a 24-hour basis. They said that even if an environmental impact study was carried out, it did not measure the exact intensity of the noise, nor its proximity to the residential zone. There is also the problem of air pollution which is a serious health risk, and the residents want the environmental study to measure its extent both within as well as around the port. Anastasiadou informed Perdikis in a letter that the problems faced by the residents have been discussed with the operator and CPA. During the meeting, it was confirmed that there is a problem and it was decided that Eurogate will commission an environmental impact study, which will propose measures to resolve the problem. The study will be sent to the CPA, as the regulatory authority, to oversee the procedures to implement and control the measures.



“Revenue from ship management has exceeded €1b”

Cyprus’ maritime cluster has developed into one of the best in the world, according to Deputy Minister of Shipping Natasa Pilides, who tells Simerini in an interview that revenue from ship management has exceeded €1 billion. She also analyses the deputy ministry’s goals, the opportunities emerging in the shipping sector from Brexit and hydrocarbon exploration in the coutnry’s Exclusive Economic Zone (EEZ), as well as the challenges currently being faced by shipping companies in Cyprus. She is asked, among other, whether she believes Cypriot shipping has potential for further growth in the immediate future, and whether the messages received by shipping companies are positive. She reponds that Cyprus currently boasts a modern and comprehensive maritime complex, which combines an international shipping register of renowned prestige and quality, is among the biggest in the world, and has a local shipping industry that is active in a broad scope of shipping activities. “Our shipping centre has been expanded significantly in recent years, both in the number of companies as well as the scope of activities and services,” she said. Indicatively, the Cypriot fleet is at its highest level since the tonnage tax system was introduced in 2010, nearing 24.5 million registered tons, while it maintains excellent quality and safety standards. There are currently 220 companies registered under the tonnage tax system (from 168 in 2017). There has also been an increase in the number of companies that provide supporting and other related services in the shipping sector. Besides the ship owning and managing companies, there are currently companies active in Cyprus in the provision of shipping technology, digital and telecommunication services, fuel supply and equipment, shipping insurance and other specialised professional services, while the majority of Cypriot banks have extended into the shipping finance sector, said Pilides. The revenue from ship management increased by 9% in 2018 compared with the year before, reaching €1b, she added. Pilides said that the messages from companies active in Cyprus as well as potential investors are positive. “Furthermore, we believe that the developments in the hydrocarbons sector and the discovery of natural gas in the Cyprus EEZ over the past few years, are positive for Cypriot shipping, and is expected to create emerging opportunities in attracting more qualitative ships and shipping companies to the island,” she said. The minister added that Cyprus has the experience and capabilities not only to provide top level shipping services, but also to further reinforce its position as an exceptional shipping hub with highly developed infrastructure.



Positive prospects but also shadows

Kathimerini Economy interviews Sovereign Credit Analyst at Fitch Ratings Michele Napolitano, who is currently in Cyprus to participate in the Economist conference. He comments on economic developments and estimates that the decision of the Supreme Court on the public sector’s payroll (more below) will not have a serious impact on future ratings of the Cyprus economy, if the country manages to maintain strong surpluses in the years to come. He notes, however, that a bad assessment by Moneyval could have a negative impact on the island’s credibility and prevent foreign investments. He describes the Estia scheme for vulnerable borrowers as generous and says he is surprised by the disappointing number of applications made to participate in the scheme. Among other, Napolitano warns that Cyprus is a small, open economy and is therefore vulnerable to external risks. Increased protectionism, a more serious than expected deceleration of the Eurozone or a hard Brexit could have a negative impact on revenue from shipping and tourism, or the inflow of foreign investment, he said.



Syndeseas reduces pollution in shipping

The fact that Cyprus has been playing a leading role in global shipping in recent years is a well-known fact, Kathimerini Economy writes. Now, it also hopes to have a leading role in the international shipping sector’s effort to deal with climate change. An initiative to this end is underway by start-up company Syndeseas Integrated Solution, which has been active for the past two years and already serves 350 ships and has four partnerships with classification companies. The company is currently in the second stage of seeking funding (Seed Round Funding), which is something it will go after during the Web Summit that begins today (Monday) in Lisbon. The paper interviews the company’s general manager, Evangelia Photopoulou, who says that Cypriot start-ups are at a disadvantage when it comes to international competition, as there is no adequate promotion or the ability to attract strong investors.



The ‘day after’ for collective agreements

2019 was a difficult year for labour issues. Big sectors of the economy were brought to the Labour Ministry to help find a right balance to renew their collective agreements. Workers at the ports were first to visit the ministry, with agreement being reached between the employers and employees just one month ago. Port workers had threatened strike action, after accusing their employers of delays in signing the collective agreement.



Hotel offers starting from 15 euros in the winter season

The Cyprus Hotels Association (PASYXE) announced special offers by 75 hotels for the winter season, starting November 2019 until March 2020. The offers range from €15 per person for a studio for two persons, to €20 per person for two in a hotel room. PASYXE notes that it has made a serious effort to encourage its members to remain open in the winter season, in its bid to extend the tourism season, given the financial difficulties they are facing that were exacerbated by the collapse of Thomas Cook.



Tourism packages – Jointly with Israel and Jordan in the new year

The government has done its part of the work and has concluded on the joint routes that will be carried in the new year with Israel and Jordan, in line with the agreement that was signed between the three countries to promote their cultural, culinary, religious tourism, as well as cycling and diving tourism. Now it is the private sector’s turn to take action. The Deputy Ministry of Tourism has invited travel operators from Israel and Jordan to present the Cypriot tourism product. They are expected to visit the island in the immediate future, while the deputy ministry will also organise workshops for participating businesses.







Deputy Ministry of Tourism supports 3^rd Radisson Blue International Marathon in Larnaca!

The 3^rd Radisson Blue International Marathon in Larnaca, which will take place on 17 November, has become one of the biggest sporting events in Cyprus. It is supported again this year by the Deputy Ministry of Tourism. Around 8,000 runners are expected to participate, while spectators will come from over 75 countries, promoting Larnaca worldwide.



Hundreds of new beds

Almost 500 new hotel beds have been added in Larnaca over the past three years, which has seen a steady improvement in its tourism. According to official figures provided by Larnaca Mayor Andreas Vyras, over the recent past, hotels with a capacity of 486 beds have been added to the district, while applications are currently pending for new hotels units, which will add another 500 beds roughly.



Record sales for Celine Dion’s concert in Cyprus

Celine Dion’s concert in Cyprus, which will take place in August 2020 and is presented by Melco and City of Dreams has broken every record in terms of ticket sales. Celine Dion is coming to Cyprus for the first time ever in the framework of its Courage World Tour. The concern has attracted significant interest from other countries such as Greece, Egypt, Lebanon and Israel. Thousands of tickets have already been sold for the much-anticipated concert of Celine Dion in Cyprus, just a few days after they were officially released. At the same time, tour operators are already preparing their travel packages for the people who will combine their holidays with the concert. It is estimated that tickets for this unique concert will be sold out very soon, since the interest and visits to the dedicated website continue unabated. Ticket prices begin from €79.



Casino: foundation works move forward

The large construction project of the casino-resort, City of Dreams Mediterranean has now progressed to the main construction phase. The foundation stone of the project was submitted by the President of the Republic, Melco’s CEO and the CEO of CNS Group in June 2018. Since, then a lot has happened and one year was needed in order to prepare the ground for the foundation of the resort’s premises. The drainage of the continued unabated due to the high groundwater level in the region. Recently, the installation of foundation piles in the ground was also completed. The project’s construction, which has been given to Avax-Terna JV, has now entered the next phase, which is the foundation work for the hotel and the casino. In a year from now, the contractors will started foundation works for the conference and exhibition centre, while the construction work will need thousands of cubic metres of cement and tons of iron. The article goes on to report on the specifications of the project. It also mentions that the external design of the project will be inspired by the Mediterranean. Access to the resort is given through the road next to the My Mall shopping centre. Hundreds of parking places will be provided, ensuring the easy transfer of visitors. Northeast of the project, two big green spaces will be created. The project will have its own waste recycling unit. The City of Dreams Mediterranean will be the largest integrated casino-resort in Europe and is the largest investment that was ever implemented in Cyprus. The project will cost €550m and is expected to be completed by the end of 2021.



1st Cyprus-China Business Cooperation Forum

The 1st Cyprus-China Business Cooperation Forum, was successfully held at the St Raphael Resort & Marina hotel. The forum was organised by the China International Investors Association and the Limassol Municipality with the support of CIECC Overseas Consulting Cooperation και Zhongshi Asia-Pacific International Culture Media Co. Ltd. The Forum aimed to establish a platform of cooperation in the business sector between Cyprus and China. In the context of the forum, Cyprus’ comparative advantages - in tourism, energy, financial services, education and other sectors - were presented, making it a top up-and-coming investment destination. At the same time, successful cases of Chinese investments in Cyprus and sectors of cooperation, were presented during the Forum. They Forum also examined the cooperation of Cyprus and China as a way of expanding the latter’s operations in Europe and the surrounding region. As it was announced, following the Forum, a charity dinner was held at the Presidential Palace, under the auspices of the First Lady of the Republic of Cyprus, Mrs Andrie Anastasiades, and with the support of the “Confucius Institute at the University of Cyprus”, headquartered at the University of Cyprus and the companies DMG Real Estate Development, OUSAI Properties, Aristo Developers, City of Dreams Mediterranean and Kelaide Properties Group. The dinner’s proceeds went to the “Panos Evripidou” institute, which provides support to families with premature infants.



Which Limassol do we want? The city’s development by 2050

A Summit was organised by DISY MP Eleni Stavrou, with a view to transform Limassol as its residents have imagined it in 30 years. The Minister of Finance, the Minister of Education and the Minister of Shipping all spoke at the event. In his speech, the Minister of Finance, Harris Georgiades said that Limassol is the main actor of our growth and “found itself on the frontlines of out country’s developmental counterattack”. “Limassol stands out among all the coastal cities of the Mediterranean and is being turned into a dynamic, outward-looking Mediterranean city”, he said while he noted that large-scale infrastructure projects like the marina and the casino “are already creating job positions and bring the state profits”. Among other things, he underlined his support to the Cyprus University of Technology and its potential, since as he said “we need to open up to new sectors through investing in university education, through research and innovation”.



The licensed betting companies of Cyprus

The betting sector is one of the most profitable sectors in Cyprus, despite the fact that it had been an essentially unregulated sector in the past years. This gap was covered by the creation of the National Betting Authority along with the change in the legislation for the provision of a permit for the conduct of on-the-spot and e-betting. The number of companies was reduced, especially in the electronic betting sector. In order to comprehend how much money is being traded within the betting sector, the article reports o the sums recorded in the first semester of 2019. The profits of the players from betting amounted to €320,706,250, while the revenues of companies active in the sector amount to €39,739,184, of which 10% goes to the state in the shape of income tax, i.e. €3,976,107. Over this period, there were 16 companies (10 online – 6 physical betting companies), while 15 companies were active in the second quarter of 2018 (9 online – 6 physical companies). The betting companies are divided in two categories (Class A for companies with a physical presence and Class B for online companies). Each licensed provider of Class A and Class B need to submit to the Republic 10% of its betting profits (betting tax). Each Class A and Class B licensed provider, contributes 3% of its betting profits to the Betting Authority.



Word of caution over 2 medicines

The Ministry of Health recommends that patients limit and carefully use two medicines; Lemtrada (alemtuzumab) and Xeljanz (tofacitinib). For Lemtrada, the Ministry’s recommendations reflect a review of publications on rare but serious side-effects which include deaths from conditions caused by the immune system, serious heart disorders, circulation, bleeding, and stroke. Immune-mediated diseases may occur many months after treatment, while many serious heart, circulation and bleeding conditions can occur only a few days after consumption. PRAC recommends limiting the use of Lemtrada in adults with highly active relapsing multiple sclerosis (MS) and for it not to be used in patients with certain circulatory disorders, haemorrhagic disorders, or patients with autoimmune disorders other than MS. Regarding Xeljanz, PRAC recommends caution – irrespective of dose and indication – in patients with high risk of developing blood clots. In addition, maintenance doses of 10mg twice daily shouldn’t be used by patients with ulcerative colitis who are at risk, unless there’s no appropriate alternative therapy available.



Uncertainty over specialised doctors’ incentives

OKYPY and state doctors’ unions have yet to reach an agreement over the incentives that the organisation will provide for state specialised doctors. Reportedly, the unions reject OKYPY’s financial proposal of receiving 13% of the organisation’s earnings and instead demand 20%. Meanwhile, doctors reject OKYPY's proposal to discuss incentives for the GHS’ second phase of implementation at a later stage and insist that both phases should be discussed together. In addition, it appears that there’s some disagreement between the unions with PASYKI insisting on “horizontal” incentives, while PASYDI and PASESI appear to be more tolerant.



GHS’ budget will be increased if needed

The HIO is working tirelessly to finalise its preliminary financial proposal for the GHS’ inpatient care in the next 2 weeks. The HIO will present its proposal to the Cyprus Medical Association (CyMA) and the Cyprus Association of Private Hospitals (PASIN). Meanwhile, Health Minister Constantinos Ioannou stated that if the budget for inpatient care is insufficient, the Government is ready and able to increase it. He wanted to clarify that the GHS has a global budget and if needed they will reconsider the health service providers’ compensation and avoid any abuses in order to maintain the GHS within its budget. However, he added that the government wants health service providers to be satisfied, and to this end it is prepared to increase the budget if it realises that it’s not enough for the system’s second phase of implementation which will include inpatient care, as efforts are being made to also include private hospitals.



Police raid nightlife establishments

Paphos police officers went on a raid campaign in the early hours of Monday, in order to address the noise pollution problem in the area. During the campaign, managers of 5 establishments were reported for various offenses including selling alcohol without a license, streaming music without a permit, operation of an establishment without a permit, smoking etc.