Daily Press - 21-23/12/2019

ΠΟΛΙΤΗΣ NEWS Δημοσιεύθηκε 23.12.2019
Daily Press - 21-23/12/2019
n recognition of the personnel's contribution, KEDIPES' Board of Directors and Management decided to grant the annual incremental raise and automatic pay rises (ATA), effective retrtoactively from 1/1/2019 until 2020, with a minimum monthly raise of €75

In the press over the weekend and today:

Green light for sale of 49% stake in KEDIPES to Altamira

The European Commission’s Competition DG yesterday published a change made by the Republic of Cyprus in a commitment concerning the procedure to sell the 49% stake it owns in the former Cyprus Co-operative Bank (CCB) to Altamira Cyprus, thus opening the way for it to sell its stake. Addressing a Press Conference, state asset management company KEDIPES’ Chairman Lambros Papadopoulos said the announcement referred to the commitment made by Cyprus to sell the stake with an open and transparent, condition-free procedure. However, he said, this commitment could not be met due to contractual restrictions deriving from the agreement that was signed at the time between the CCB and Altamira Spain. And so, a time-consuming procedure began between the Finance Ministry and DG for Competition, with Altamira Spain adamant that it would not relinquish any of its contractual rights, thus preventing Cyprus’ commitment from being implemented. So, the DG responded positively to a request by Cyprus to amend the wording of the commitment, so it now says that the stake must be sold at a market-compliant price, which must be evaluated by an independent special appraiser. Currently, an independent appraiser is looking at the agreement with Altamira Spain and news on the matter is expected in early January 2020. Meanwhile, announcing KEDIPES’ quarterly results, the company’s head of finances Lambros Papalambrianou said that the Loan Guarantee Scheme for Hellenic Bank has been activated, with €65.8m being paid to the bank for the period 1 September 2018 – 30 June 2019. The claim mainly concerns accounting provisions that emerged after HB completed the transfer of operations from the CCB to its systems. According to the procedure, SEDIPES/KEDIPES has informed HB that it is not in a position to confirm the claim, and so the two sides must apply to a specialised firm that has been appointed jointly to confirm the sum of the claim. According to the terms of the scheme, HB has submitted €15m to the Republic of Cyprus for the guarantees that were granted. Papalambrianou said the two sides have appointed a firm from abroad, which they will resort to if they cannot agree on the exact sum.

Hellenic Bank organises first Career Open Day

With a view to attract and promote new talent, Hellenic Bank is organising its first Career Open Day, giving the opportunity to students to meet the different departments of the Organisation. During the “Hellenic Bank Career Open Day”, students will have the opportunity to meet representatives from different departments of the Organisation, receive information about the activities and operations of the Bank, as well as the future job opportunities offered by Hellenic Bank. At the same time, students will be able to participate in an interactive workshop that will help them properly prepare and get a good impression in future job interviews. Moreover, they will be able to participate in interview simulations that will be offered by members of the Bank’s HR Department. The event will take place on Saturday, 21 December at 11:00-16:00 at the Hellenic Bank headquarters.

KEDIPES grants employees incremental raises and ATA

In recognition of the personnel’s contribution, KEDIPES’ Board of Directors and Management decided to grant the annual incremental raise and automatic pay rises (ATA), effective retrtoactively from 1/1/2019 until 2020, with a minimum monthly raise of €75. According to KEDIPES’ announcement, this development signals an effort to achieve a positive climate of cooperation, in view of the completion of negotiations with all the unions to reach a new collective agreement. It is noted, that the collective agreement will be shaped according to the commitments and obligations of KEDIPES, as per the list of obligations of the Directorate General for Competition, as well as the company’s financial capacity. It should be noted that with a circular, ETYK had warned KEDIPES’ Management that if they don’t grant the automatic pay raise and incremental raise, they will proceed with filing lawsuits. Specifically, ETYK had highlighted KEDIPES’ contractual and legal obligation for its retroactive compliance.

E-payment seminars by the Ministry of Labour

Ministry of Labour officials will go to all Cyprus cities, as part of an awareness campaign for electronic payments. Within 2020, the Ministry of Labour will implement automated methods for contribution to the Social Insurance Fund (SIF) as well as the GHS. The automated contribution methods, that will be offered by the Department will include credit card payments. At the same time, the counter operating at the Social Insurance Services offices will cease their operations in 2020. Presently, a total of 51 counters, through which €1b-worth of payments are made every year. As such, the social insurance services will hold an island-wide awareness campaign in order to train and support citizens who are not familiar with e-payments and the internet in general.

Cyprus Grains Commission knew about the haircut

The Cyprus Grains Commission and the organisation’s Pension Fund lost €17.5m in the 2013 haircut deposit. As it was revealed in the Auditor-General’s report, that was published three days before the first Eurogroup decision to proceed with a deposit haircut, and requested to withdraw their money from Laiki Bank. According to the Auditor-General, the Grains Commission president and the director-general of the Ministry of Finance, Christos Patsalides knew about the upcoming deposit haircut. Specifically, the Grains Commission and the Pensions Fund lost €6,261,475 και €11,207,606 respectively. A big part of the losses, occurred because of the termination of the fixed term deposits they had with the National Bank of Greece and the transfer of the corresponding available fund to Laiki, two weeks before the haircut. As the Auditor-General says in his report, it was expected that the current Chairman of the Board and the Director-General of the Ministry of Finance, who were immediately involved in preparing the consolidation and restructuring framework for Cyprus’ banks as well as the former Director of the Grains Commission, Takis Kanaris, knew about the upcoming haircut and should have been able to better evaluate the risk of transferring funds to Laiki Bank, during that specific time so as to avoid this significant loss of public funds.

Cyprus in last place in EU for high-growth enterprises

Cyprus had the least high-growth enterprises in 2017 in the EU, according to Eurostat. During 2017, around 190,000 businesses were classified as high-growth and employed around 16.4m employees. According to Eurostat, the highest rates of high-growth enterprises were recorded in Ireland (16.5%), Spain (15%), Portugal (14.2%), the Netherlands (13.9%), Malta (13.7%) and Sweden (13.61).

Cyprus enters the era of e-auctions

Economy Today reports that Cyprus has officially entered the e-auction era in December. It is an important tool for the banks, who hope that with the digitisation of auctions they will manage to further reduce their NPLs, which are the biggest wound of the Cypriot banking system. The company ACB E-AUCTIONS Ltd is responsible for the maintenance, control and reliable operation of the e-auction platform. The company is registered in Cyprus, and is entirely owned by the Cyprus Banks Association. The system auctions off mortgaged properties, on behalf of mortgaged borrowers. The mortgaged borrowers could be credit institutions, credit acquiring companies and private individuals. Among the items auctioned-off are all kinds of properties such as houses, office spaces, shops, offices, parking lots, warehouses, craft industries.  The first e-auctions which have been posted on the www.euaction-cy.com platform were held on 18 December. The date in question was determined after the first properties were posted on 18 November. 16 plots and fields were auctioned-off on the first day. The total number of properties to be auctioned-off, were 27 in the whole of Cyprus. The article goes on to list all the properties that will be auctioned-off. The mortgage lenders are the following: Gordian Holdings Limited, Co-operative Asset Management Company Ltd, Hellenic Bank Public Company Limited. Gordian Holdings is a loan management and credit acquiring company and has purchased a large Bank of Cyprus portfolio.

Panicos Nicolaou: The future is digital

Phileleftheros Forbes interviews Bank of Cyprus new CEO Panicos Nicoalou, who speaks about the bank’s upcoming challenges and says that he’s ready to leave his own mark in the country’s banking sector by taking up the role of moderniser and reformer. He highlights that the Bank must accelerate the reduction of NPLs and that it is looking to sell off a second large NPL package. As it comes to the big chapter of digital transformation, the CEO of the Bank stresses that the bank’s e-branches will be launched in 2020, among other developments. Finally, he doesn’t hesitate to send a message to the strategic defaulters, telling them that the bank will proceed with foreclosures, especially given that the ESTIA deadline has expired. The CEO talks about the bank’s future and its profitability as well as the type of loans the bank aims to grant in order to support the country’s economy. He also talks about the bank’s excess liquidity and the suspension of charges, in order to focus on better training people for the digital age. Specifically, he said that depending on how well the education/training of people goes, the bank will decide when it will reinstate the banking charges. Asked about Hellenic Bank’s approach to the payment issue and the fact that it linked up raises with the staff’s evaluations and productivity, the Bank’s CEO said that they themselves are supporters of the system’s modernisation and raises according to performance. They aim to discuss this with ETYK, when they deem that the moment is right. “We should mention that our priority was the success of the Voluntary Retirement Scheme and the reorganisation of the Bank’s structure. The bank has made steps and has implemented significant innovations in this sector, including raises according to performance. Everything went well and we are absolutely satisfied”.

Public debt and NPLs

The European Commission has decided that it will proceed to an in-depth evaluation of the public and private debt of Cyprus, that keeps causing serious imbalances in the country’s macroeconomic environment. In its report, the Commission refers to State Aid as part of the Co-op-Hellenic deal, while last week we saw the first disagreement in relation to the amount that KEDIPES has to pay due to the guarantees that were offered to Hellenic Bank, connected with the quality of the portfolio that it took up as part of the deal (some loans that were considered as performing, are not performing and Hellenic Bank asked KEDIPES to cover its losses). It should be noted that KEDIPES has already made €260m payments to the State (€120m in cash and €140m in property and asset transfers) something that reinforces the effort to reduce public debt. However, it is estimated that the full repayment of the facilities offered by the State will require a long period of time. At the same time, the country’s good fiscal performance enhances the downward course of the public debt, while the better working conditions, enhance the households’ finances and their effort to pay back their loans. The country’s public debt, is an incredibly important index for the economy, since it shows how resilient the country is in the case of negative developments. It is becoming evident, that high rates of lending/leverage limit the state’s ability to implement its fiscal policy as well as take drastic decisions in periods of crisis. A country’s credit profile depends on its ability to meet its obligations, the course of its public finances, and the course of the financial system. The country has been rated at investment grade after ridding the banking system of a significant part of its NPLs. The capacity to access easy and cheap financing, is one of the most important factors for the country’s economic recovery, while it can potentially improve the credit profile of the country.

NPLs a headache for KEDIPES

The renegotiation process of KEDIPES’s contract with Altamira Asset Management, for the management of the former’s loans is currently underway. The result of the negotiation is expected in the immediate future, however it is of minor importance. This is because, due to the KEDIPES’ results it issued last week, the most important indicator is that the total recovery of loans, reached only 3.5% in a year (since the start of KEDIPES’ operations). There are two parts: the percentage of 3.5% is very far from the percentages that Altamira had presented to the former Co-op, during their agreement in the summer of 2017. Back then, according to the forecast it had presented the Co-op’s NPLs would be almost entirely eliminated. However, things are different for the current KEDIPES, and their reduction rate is deemed non-satisfactory by individuals familiar with the market. The recovery rate, is the most important element as it reflects that a loan’s value was recovered, after it stopped being paid. According to KEDIPES’ information, that concern the period from September 2018-September 2019, the NPEs reached €7.11b, in the end of the first quarter of 2019, from €7.23b in the previous quarter, recording recovery of 1.7% due to collections and write-offs. The total recovery rate within the year amounted to 3.5%. According to experts KEDIPES should not rely on absolute figures and a potential reduction of the price it will get from each restructured loan. They report that their performance should be renegotiated on the basis of the Co-op’s problematic portfolio. At the same time, the experts mention the large number of staff that manages the bank’s loan portfolio, since apart from the 200 people at Altamira KEDIPES has 350 employees. Moreover, they highlight the weakness of the Co-op’s agreement with Altamira, the fact that it will be paid according to performance i.e. according to the loans it will service, without receiving a fixed payment. In relevant agreements, for example between APS and Hellenic Bank, the agreement stipulated that it would pay a €20m penalty to the bank, if its performance was not satisfactory.

Negative interest rates are coming in 2020

Cypriot banks will start charging big depositors next year. Even if in the beginning, when the ECB first announced its measures to increase deposit rates, the Cypriot banks said they would start charging big depositors from the start of 2020, they aim to start around the middle of the new year. The burnt of this mainly falls on Hellenic Bank and the Bank of Cyprus. The former announced that it will proceed with charging big depositors, while the Bank of Cyprus is looking into this possibility. The reality, however, is that both will inevitably start charging big depositors between March and June 2020. This time stamp does not have any significant importance, it will simply happen around three months after the notice via PSD2, i.e. the European market’s payment services. What is really important is what is regarded as a large deposit. While it is not fair, that the banks will align the big depositor limit so that they are competitive in the sector. Banking sources, told Kathimerini that big depositors will be potentially divided in categories. However, they said that nothing has been decided yet. However, not all big depositors have the same profile. For example, they said that some big depositors have merely “parked” their money at the bank and other depositors who may not have big deposits, but cooperate with the bank in other ways. The article goes on to say that while 2019 was a good year for the two banks and they had adequate profitability. However, their excess liquidity in their balance sheets is costing them and puts pressure on their profitability. As such, while Hellenic Bank is a small Bank for Cyprus, Cyprus is very small for them. Given the above, the Cypriot banks in general, and not only these two big banks have channelled their liquidity outside of Cyprus. They are carefully looking for low-risk investments, with the most usual being the syndicated loans in project’s abroad.

Insolent people and hard-working people

Article by Kathimerini Economy’s publisher Demetris Lottides, who says that SPP Media Group has always been consistent in its obligations to the banks and the state, without asking for favours and negotiate the independence of its Media’s values for financial or other conveniences. Lottides goes on to say that the Group supported the Banking system over time. However, he says that he would like to tell the heads of the banks and specifically, Mr Nicolaou and Mr Matsis, that rewarding inconsistent borrowers at the expense of the households of the Cypriot economy and society, for short-term accounting profit, against the new Cyprus we want. Of course, we are not only referring to the simple citizens who were affected with the financial crisis and unemployment (and could not meet their obligations). We are referring to the big lenders whose investments failed, who is approached by the banks in violation of SSM directives, with a debt haircut and new funding. He concludes by saying that the Group will be against the banks, with the same power they had stood by them all these years. “Today’s banks are not regular companies, but institutions that literally live off the blood of the Cypriot citizens. It is time that bankers realise their role and the severity of their position. Before it is too later for the country and themselves.”

An expensive memorial

Opinion article by former Interior Minister and Nicosia Mayor Eleni Mavrou on KEDIPES’ deal with Hellenic Bank. KEDIPES’ announcement that they recently activated the Asset Protection Scheme with Hellenic Bank after the latter submitted a €65.8m claim for the period between 1 September 2018-30 June 2019 almost passed unnoticed. She argues that when the state’s deal with Hellenic Bank was being finalised in July 2018, many people failed to notice that the government’s choices will be paid by the Cypriot society for a long time. The agreement, which was approved, by the House by the parties of DISY, DIKO, EDEK and ELAM foresaw among other things, that for the next 12 years, Hellenic Bank will have to be compensated for potential damages for taking up the Co-op’s deposits. The compensation will be paid by KEDIPES but in the case where this is not possible, the obligation is transferred to the Republic of Cyprus. Back then, she argues, the Ministry of Finance was assuring everyone, referencing a study by a specialised firm, that Hellenic’s guarantee will not exceed €155m over a period of 12 years. It was ensuring everyone that in the first year, the compensation would amount to around €31m. It should be noted that when the state had full control of the Co-op in August 2013, the Co-op had about €14b worth of deposits, €11.5b of loans and €1.2b in bonds. It is obvious that Hellenic Bank’s claim for a €65.8m in the first 10 months, by far exceeds the Ministry’s estimate. This means that the damages for taxpayers may be higher than the initial estimate. Mavrou says that instead of any explanation, the Ministry of Finance completely forgot what they were saying in the summer of 2018 and claims that the amount that was claimed is in line with the initial estimate.

Simultaneous physical and digital auctions

The Banks and credit acquiring companies will proceed with simultaneous physical and digital auctions, in order to increase their sell-off trend even more this year after the ESTIA scheme deadline ended. According to the newspaper’s study, a total of 32 auctions have been scheduled for the next few days, which concern 160 properties, worth €39.5m. In fact, 34 properties are houses and apartments, of which only there exceed the ESTIA eligibility limit (€350.000). It should be noted that most auctions, which are scheduled for the next few days, will be held with the old method of physical auctions. However, the intention of the banks and credit acquiring companies is to gradually transfer all their foreclosures to the new electronic platform e-auction. It should be noted that the electronic platform held its first auction on Wednesday 18 December, at which 15 properties were foreclosed, which are mortgaged by Gordian Holdings. In fact, the auction’s result was deemed satisfactory by the banks and credit acquiring companies, as 120 potential buyers participated and 2 properties were sold. The next electronic foreclosure has been scheduled for next Monday, 30 December and concerns properties that are mortgaged at KEDIPES (former Co-op).

Raises at KEDIPES

KEDIPES’ Board of Directors and Management decided to grant the annual incremental raise and automatic pay rises (ATA), effective retrtoactively from 1/1/2019 until 2020, with a minimum monthly raise of €75. According to KEDIPES’ announcement, this development signals an effort to achieve a positive climate of cooperation, in view of the completion of negotiations with all the unions to reach a new collective agreement. It is noted, that the collective agreement will be shaped according to the commitments and obligations of KEDIPES, as per the list of obligations of the Directorate General for Competition, as well as the company’s financial capacity. It should be noted that with a circular, ETYK had warned KEDIPES’ Management that if they don’t grant the automatic pay raise and incremental raise, they will proceed with filing lawsuits. Specifically, ETYK had highlighted KEDIPES’ contractual and legal obligation for its retroactive compliance.

“Eastmed-London Investment Summit”

Bank of Cyprus CEO Panicos Nicolaou talked about the dynamic of the banking sector in Cyprus by investing in the future at the Eastmed-London Investment Summit held by the Economist at the London Stock Exchange under the title Cyprus-Greece-Israel: Propelling a partnership for growth. Specifically, Mr Nicolaou stressed that the bank is on the right track to become a stronger, safer and focused on the future become more efficient. The Summit examined how the trilateral cooperation between Greece-Cyprus-Israel can give an impetus for growth in the Mediterranean region.

We don’t know

Phileleftheros’ author wants to learn how many debt restructurings by Cypriot banks have been viable and how many of them failed. The author argues that the Central Bank could publish an analysis of this data, as it has a complete picture for the Cyprus banking system. The data could include how long was it after they became non-performing again and what went wrong, as well as how many of these restructurings concerned households and how many concerned businesses.  He argues that while the public is speaking about debt restructurings we are not really aware of their success/failure rate. He argues that if there is transparency, everything will happen much easier. This is an opportunity for the Central Bank to provide us with a long-term picture of the Cyprus banking system.

2019 challenges taken into 2020

2019’s challenges for the banks, tourism, the investment programme and construction will be taken into 2020. One of the failures with social as well as banking consequences, is the failure of the ESTIA scheme. The banks had a lot of expectations for the state scheme for the protection of the primary homes, hoping that it would help them reduce their NPLs by €3.4b. On the other hand, it remains to be seen whether the Government’s thoughts for the vulnerable groups of borrowers, as it comes to promoting the social package to maintain the primary homes will be turned into actions. The banks are ready to sell new loans packages to investment funds, and get rid of a large part of their problematic loans. In the case where they don’t manage to reduce their NPLs, the Cyprus economy will be negatively affected since the weight on their balance sheet will remain. Moreover, external developments also have consequences in the interior of the country. A no-deal Brexit, is expected to have a negative consequence for the economy as well as the EU. Tourism is also vulnerable to external factors. The first months of 2020 will show how tourism will perform. Cyprus has seemingly come out of Thomas Cook’s bankruptcy relatively painlessly, but no one can know for sure how Brexit will affect the sector and how the British tourists will react. As it comes to public finances, the Supreme Court’s decision for wage cuts and pensions in the public and wider public sector, may affect the country’s public finances in the short-term. The consequence will cost up to €844m until 2023, and measures should be sought to balance such a decision. Moreover, the citizenship by investment scheme may also face challenges in 2020, affecting the sectors of the economy especially, real estate due to the implication for money laundering. Moneyval’s assessment report is also expected in the beginning of 2020, which was completed during the time it emerged that Cyprus will grant the Cypriot citizenship and passports to investors of questionable validity. In 2020, Cyprus is also scheduled to pay its debt to IMF, resulting in a further reduction of the country’s public debt. Moreover, many reforms will be promoted, many of which started in 2013 without any result.

€11b of social benefits in eight years

From 2011 until 2018, the state granted thousands of citizens with €11b in social benefits. These were mainly pensions and subsidies. In 2011, the state had given €1.2b pensions and subsidies, while these steadily reached €1.51b by 2018. According to data by the Ministry of Labour, from 2011-2018, the state’s social benefits have been increased by €306m, while the majority of the state’s expenses concerned the institutionalised pension, the unemployment benefit and the widower benefit. At the same time, data shows that every year, the state’s cost for the abovementioned benefits are increasing every year. On the other hand, the state’s expenses for disability benefits, as well as the orphan, missing persons, unemployment and bodily injury benefits have been reduced. Essentially, the social benefits are also linked to the indices of the economy.

No extension for ESTIA

In the absence of any surprises, there will be no extension for the Estia scheme, despite the complaints that the departments involved in the application process have expressed. Specifically, they said that the time given to complete the applications was not enough. 1 and a half months extension has already been granted as an extension, expiring at the end of the year. People who are not able to draft their application on time, can submit them, even if incomplete (by 31 December) and will be given three months to submit the necessary justifying documents.

Tourism, Foreign investments and construction, the country’s growth drivers

According to a study that was recently conducted by Pulse Market Research, Cypriots believe that tourism, foreign investments and the construction sector are the sectors that supported the country’s economic growth most in the past few years. 19% of respondents said that tourism was responsible for the country’s economic growth, while 17% said that foreign investments were responsible, 13% attributed growth to the government’s efforts, 9% said it was due to the construction sector, 7% said it was due to Cyprus’ Citizenship by Investment scheme, and 6% said that growth was a result of the people’s industriousness. 13% of respondents said that there is no growth and that is a temporary phenomenon.

Properties up to €5m auctioned off

The Banks are auctioning off properties worth millions of euros in January 2020 and they concern all the cities of Cyprus. As it comes to some properties worth millions of euros, the banks choose to sell them through the electronic auction platform. A property sold by Hellenic Bank through the e-auction platform stands out. It will sell a plot of 1.624sqm, which is located on the Yermasogia river, with a tentative price of €5,258.000. Apart from the property there is a five-storey building with a basement covering a total area of 2,608sqm – 2,709sqm. In Nicosia, Bank off Cyprus is selling a plot in Ayios Andreas with the traditional method, at the tentative price of €1,483,675. Gordian is proceeding to sell off two plots in Strovolos, in which a four-storey business building with a basement has been built at the tentative price of €2,000,000. There are also properties that will be auctioned at more than a million euros. Eurobank Cyprus is auctioning off a plot in Dali, with a tentative price of €709,000. Moreover, will auction off a plot in Nicosia with a tentative price €938,800. The building is in its final stages, but works stopped about 6 years ago. It is made up by a total of 4 two-storey apartments (two apartments on the ground floor and first floors and two apartments on the 2nd and 3rd floor). Hellenic Bank, is auctioning off a plot in Yermasoyia for €406,000 through the e-auction platform. It is also selling a plot in Ypsonas for €644,000. Hellenic Bank will also try to sell off a two-storey building with a tentative price of €930,000.

Growth to be reduced almost by half in 2020

The 2010s were characterised by significant growth as well as a credit crisis that caused a resulted in a worldwide recession. The next decade, up to 2020 can be described as the decade of recovery, but an unequal and weak recovery. The state of the big economies that are weakened and cannot recover their dynamic, may be something more than just a phase but a new state of affairs. This is what the top economist of the Economist Intelligence Unit supports, predicting that the global economic growth will be halved in the 2020s compared to the 2010s.

Nouris applies pressure for construction licensing process

The Minister of Interior, Nicos Nouris gave guidelines to the competent officials of the Ministry to apply their full efforts so that a significant part of the plan to reform the licensing procedure of land development projects, can be implemented in early 2020. The Minister headed an official meeting last Friday, during which they discussed ways to speed up the implementation of some main provisions of the new licensing policy, prioritising those that do not need a legislative amendment. The initial plan stipulates the full implementation of the new policy in the start of 2022, since in the meantime, they are promoting bills to amend the relevant laws to the House, intending to implement other changes earlier. However, Nouris told Politis that there is an urgent need to modernise and consolidate the process and that the work that was done in the past two years by the Ministry of Interior in cooperation with ETEK allows us today to speed up some decisions and procedures so as to implement the policy within the new year, significantly reducing the time needed to issue a town-planning licensee.

Tourism, Foreign investments and construction, the country’s growth drivers

According to a study that was recently conducted by Pulse Market Research, Cypriots believe that tourism, foreign investments and the construction sector are the sectors that supported the country’s economic growth most in the past few years. 19% of respondents said that tourism was responsible for the country’s economic growth, while 17% said that foreign investments were responsible, 13% attributed growth to the government’s efforts, 9% said it was due to the construction sector, 7% said it was due to Cyprus’ Citizenship by Investment scheme, and 6% said that growth was a result of the people’s industriousness. 13% of respondents said that there is no growth and that is a temporary phenomenon.

Extra gift for the hoteliers

In addition to the setting of the minimum wage in the hotel industry, the Minister of Labor will issue with effect on January 1 a decree allowing for the first time the hiring of foreign students in hotels. The decision helped the hoteliers accept the mediation proposal for the renewal of the union agreement. It has always been the hoteliers’ request, and today they will be able to hire students from third countries for practical training work during the period between 1st June and October 15 when students’ field of study is related to hotel management, food catering, etc.

Reservations less than satisfactory

The high occupancy rates recorded in the previous two years had created expectations in the tourism sector in Paphos that they will continue for the whole year. Unfortunately, these expectations were proven less than fruitful this winter in Paphos since reservations remain slow. Hopefully, Cypriot visitors are expected to contribute to higher occupancy rates during the holidays.

Winter tourism with just 170 hotels

Winter tourism appears to be going into a period of hibernation.  Out of 425 hotels, only 170 remain open in winter. Although in number, this year’s total number of hotels remaining in operation are more than last year, there is a big difference from the summer’s busy season.  In general, it appears as though the impact from the closing of Thomas Cook was limited.

Charis Loizides: The only way to the future is by delivering quality

The President of the Cyprus Hotel Association (PASYXE) Charis Loizides said that every year is a new opportunity to reevaluate the sector’s previous results and set new goals/priorities for the year to come. According to him, 2020 will be a landmark year for the island’s tourism sector, and we need to change direction towards improved quality in order to achieve our targets for tourism revenue and arrivals. Last year, tourism was stable and maintained about the same levels of arrivals compared to the previous year, while it recorded a slight drop in revenue. He added that the promotion of important infrastructure projects, such as conference centres, marinas and casino-resorts, ought to be one of the island’s priorities, as it will establish Cyprus as a choice for high-wage tourists.

Citrine Estates: A holistic experience harmonised with nature and luxury

Economy today interviews Elias Pattichis, the Deputy Manager Operations of Citrine Estates, who considers the new Citrine Estates project is much more than just a simple residential project in the Limassol – Akrotiri area. This is a comprehensive product, carefully designed in order to strengthen and embrace nature, offering a unique balance between taste, high-quality and natural beauty. Describing the new luxury residential development project in Limassol, he says that it will be located near the awaited integrated casino-resort, City of dreams Mediterranean.

Saying goodbye to 2019

Famous singer Celine Dion told her fans in Boston goodbye with a beautiful photo on her Instagram page, of her dressed as a snow princess. Celine Dion will take a brief break due to the holiday season, and her shows will pick up in Florida on 8 January. She will tour many countries, while she will also visit our island next August, as a part of her “Courage World Tour”. The amazing live show will be presented by Melco and City of Dreams on Sunday, 2 August in Nicosia.

Wastewater treatment plant in Limassol hits the breaks

The article reports that the construction of the wastewater treatment plant in Kato Polemidia has been delayed. According to the relevant contract, its completion will take 20 months. If the wastewater treatment plan is not operational by Limassol Casino’s launch in mid-2021, it could mean that the operators of the Limassol casino, will be forced to empty their wastewater with the help of tankers. Recently, the Tenders Review Authority issued “temporary measures” that prohibit signing the contract for the beginning of the construction of the biological station. A company that applied for the tender of a pumping station, which is a part of the biological plant treatment project, has filed for litigation to the Tenders Review Authority. According to the Authority, reviewing the litigation takes 2-3 months, but this period can be shortened

Responsible betting and gaming

The Chairwoman of the National Betting Authority Ioanna Fiakkou discusses ways the public can be responsible in betting and gaming. She says that the festive season undeniably creates opportunities to game and betting but she wants to remind the public that participating in these, should be done responsibly and remain as part of social engagement, while avoiding negative consequences. She wants the public to know that there’s an abundance of information and advice, as well as self-protection measures on the authority’s website www.responsiblegaming.gov.cy. Authorised websites listed on the website, so that people can avoid going on unauthorised and illegal websites. If anyone identifies any illegal betting or gaming activity, they should report it either by calling or emailing the authority.

KEFA President: “No negotiation up until today”

A few months before the second phase of the GHS is to be launched and at least in the pharmaceuticals sector, negotiations are still on ice. As the President of KEFEA, Kyriacos Mikellis says, the negotiation process for the second phase has not yet begun. He argues that the entire second phase of the GHS may be jeopardise and that serious drug shortages may arise in the sector of inpatient care. Mikellis identifies outstanding issues regarding the new healthcare system’s second phase. The establishment of a monitoring committee for pharmaceutical expenses, the creation of a compensation committee, the management of vaccines, the completion of the procedure to incorporate all medicines and the beginning of the evaluation of new medicines, are only some of the pending issues in the pharmaceuticals sector. He believes that the public has embraced the system and that patients have benefited greatly from it. He argues that the public has a positive perception and experience from the system. The patient can access their personal doctors, and can easily switch doctors if they are not satisfied. Despite, the initial problems of overcrowding and a limited number of specialised doctors seems to have been overcome. As it comes to Pharmaceuticals, which is our industry we have seen significant improvements compared to the previous situation. There are still a lot of pending issues, for which they need to be further discussed with the HIO and the Ministry of Health. He says that even though the public has embraced the new system, stakeholders involved in the reform of the sector, are aware of the pending issues and know that the most important issues have to do with the second phase of the system which is the most important and will determine the success of this whole effort. With regards to drug shortages, he argues that this problems concerns all stakeholders involved in the production, distribution and usage of drugs. He argues however, that real shortages are very few (i.e. where a specific pharmaceutical element does not exist) are very few and all interested parties are making an effort to ensure it as soon as possible. He argues that the drug shortage problem has started to smooth out and that these phenomena are expected to be reduced even more. He adds that there are important problems and delays in adopting and implementing everything that was agreed in the MoU with the HIO and the Ministry of Health. He argues that essentially, the negotiation for Phase B has not yet started, and as a result the entire effort is jeopardised. He argues that the problems we were faced with in the first phase will arise yet again. We will need, without further delay, to start the dialogue and settle pending issues so that we don’t end up facing real shortages this time. He adds that the healthcare reform is a great opportunity to provide citizens with access to the entire vaccination schedule and ideally to a variety of vaccines for every disease, similarly to what is put forward for medicines. He argues that the procedures followed should be more flexible in order to avoid significant shortages of new vaccines in the near future. It is also important to establish a National Commission for Vaccines, which will be responsible for the assessment of new vaccines and for the upgrade of the vaccine schedule for children and adults.

Remedica shows it cares about the environment with tree planting activity

In the spirit of environmental sustainability, Remedica, the recent recipient of a Golden Environment Protector award, organised a tree planting activity in an area of the park on Gesthimani Road in Agios Athanasios, Cyprus, on the 23rd of November 2019 to encourage protection of the environment and promote sustainability. Through the efforts of the company’s employees, more than 200 trees were planted, which thus contributed to building a greener community and making the area more beautiful and pleasant. Environmental responsibility plays an important role in the company’s activities. For many years, the company has undertaken an important mission: to promote the development of the country, increase the well-being of the population, and build a strong and sustainable future. Remedica views planting trees as a symbol of hope and continuity of life. This event inspired individuals to focus on the protection of the environment while raising awareness of the importance of forests on a global scale. 

Study on drug shortages

The European Association of Hospital Pharmacists (EAHP) is carrying out a very important study on drug shortages. As the officials say, these shortages do not only concern hospital pharmacists and their causes should be examined, because they are seriously affecting the patients’ treatments. For this reason, for the past 10 years, the European Association of Hospital Pharmacists has increased public awareness about the problem 

This the HIO’s Memorandum for private hospitals

The Board of the HIO, approved yesterday the Memorandum of Understanding that was sent to the Pancyprian Private Hospitals and Clinics Association, which will have to examine it and give a negative or positive response to the HIO. The document is made up of eight pages and includes provisions that determine the validity period for everything included, the way that the hospitals’ and the doctors’ compensations will be determined, the rebate that the hospitals will grant the Organisation as well as the way that the lists of pharmaceuticals, consumables and implants that will be used by the hospitals in the context of inpatient care. Specifically, as it was agreed during the negotiation of the past three months, between the HIO and PASIN, the memorandum includes the basic terms and the framework of cooperation between the two parties, as it comes to inpatient care during the second phase of the GHS’ implementation. The memorandum aims to record the basic parameters for the incorporation of the private hospitals in the GHS and determines that the individual provisions, while each hospital will have the opportunity to negotiate their payments individually. Moreover, the specific memorandum has to do with the creation of a transitional regulation for the smooth adjustment of private hospitals within the GHS and will enhance the hospitals that will express interest in joining the GHS by 14 February 2020. As the memorandum stipulates, the inpatient acts will be paid according to the DRGs system, through which it is agreed that each hospital will have fixed price unit for a predetermined volume of work.

The ball in PASIN’s court

Following the HIO’s approval of the MoU last Friday, the ball is definitely in PASIN’s court, which is now called to approve or reject everything included in the HIO’s document. If PASIN approves the memorandum, then the way is paved for the implementation of the second phase of the GHS, since with the approval of the private hospitals association, the HIO’s work becomes much easier. A potential rejection of the MoU will create new upheavals for the GHS’ implementation, since even though the final decision will be taken by each hospital individually, the GHS will once again be troubled. It should be noted that private hospitals and clinics already participate in the GHS and offer outpatient care services in all Cypriot cities. Some of them have already announced their intention to fully joint the System starting next June. There are also cases of small clinics that are starting their expansion, after the partnerships they achieved with an additional number of doctors from different specialties. An important element for the introduction of the hospitals in the GHS, is how many of their doctors have already joined the System and how many will in the future. It should be noted that the majority of Cypriot doctors have joined the system with their number amounting to 1900.

Patients had previously warned about abuses

Patients’ association OSAK, argues that following the Auditor-General’s report that revealed abuses in the healthcare system, the system’s philosophy must be preserved. As it says in an announcement, it is rather worrying that the abuses concern many doctors. However, OSAK calls on the HIO to research cases of abuse and the people who have deliberately abused the system or proceeded with fraud, should be punished as an example. The majority of doctors who are working according to the law, must isolate the few and remove them from the system.

Smoking and blood vessels

Unfortunately, smoking is the “plague” of our times as most smokers have taken up the habit at a young age. The reasons why someone starts smoking may include curiosity, imitation, pleasure, or anxiety, but it is a very harmful habit which is difficult to quit. The article is written by Dr Christos Papasideris, a vascular surgeon, who discusses the real consequences of this harmful habit on health. Smoking has many negative effects on the human body including bronchitis, chronic obstructive pulmonary disease, pulmonary hypertension, asthma, lung cancer, erectile dysfunction, etc. Additionally, smoking is very harmful for blood vessels, and most of all can cause atherosclerosis. The article goes on to describe the above in detail.

What should we do?

In an opinion article former MEP Takis Hadjigeorgiou, states his views on the latest developments in the Cyprus Problem. He clarifies that he is referring to a bi-zonal, bi-communal federation, without guarantor powers, without an occupying army, but with a sense of safety for the island’s citizens. He argues that the Cyprus Problem won’t be solved with a solution, it will be solved through a solution. Many years of being divided have passed. Therefore, it will require many years before the communities can enter a new era of a more sustainable, safe and peaceful future. He goes on saying that a solution will face difficulties, but through a solution we will be able to level the playing field. He says he fears the worst, as he reminds the readers that the United Nations had already called Member States and other international organisations in 2004, to take reasonable measures stop the financial isolation of Turkish-Cypriots. An unfair and incorrect decision with effect until today. Besides, it’s on this basis that the European Union brought about the idea of direct trade with the occupied areas. That idea was halted through a series of meetings based on the argument that the proposal was legally binding, as it referred to direct trade with a third country, but also because of the ongoing talks aimed at solving the Cyprus Problem.


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