Daily Press Review - 15/4/2020

In the press today:

Free money transfers up to €1000 by Hellenic Bank

Hellenic Bank customers can transfer sums up to €1000 to banks of Cyprus and Europe (SEPA) for free, through the Bank’s digital channels. The customers, by using Hellenic’s Web Banking and Mobile App are gaining money and time, while in this period this development is especially beneficial due to the clients’ increased needs to send money to Cyprus and Europe. Relatives of Cypriots who are waiting to be repatriated, student parents and friends of people who need financial support this period can benefit from the service without having to visit any branch, protecting their health, in a quick and cost-effective manner. Moreover, Hellenic is the first bank in Cyprus that gave its clients the opportunity to register directly and via web to its digital channels. More than 4000 clients registered to the bank’s digital channels over the past few days, without having any face-to-face contact with the Bank, simply by completing an electronic application on the Bank’s website.



Cyprus has highest NPLs rate in construction sector

Cyprus continues to have one of the highest rates of NPLs in the real estate sector in Europe, despite being boosted by the citizenship by investment scheme. According to information announced by the European Banking Authority, the Greek and Cypriot banks are the leading the charts of countries with the highest NPLs. Even if they have the highest rates in the euro area, their NPLs are dropping slightly every quarter. In Cyprus, the NPLs rate in construction stood at 59.9% at the end of December 2019, compared with 63.1% at the end of September and 65.7% at the end of March of the same year. Greece follows with an NPLs rate of 53.5% at the end of December and 60.2% at the end of March. Cyprus is in second place as it comes to NPLs in the real estate sector. The country’s NPLs rate stood at 24.3% in in the end of December dropping from 26.1% in in the end of September and 29.1% in the end of March. In Greece, this rate stood at 38.4% in the end of December and 47.9% in the end of March 2019.



Digital communication with banks

In an announcement, the Cyprus Banks Association notes that after intensive work over the past Weekend the banks continue to contribute to the Labour Ministry’s efforts to identify beneficiaries who have wrongly applied for extraordinary economic support. The Banks-members of the Cyprus Banks Association are calling the public to make use of the electronic channels of communication with the banks and/or receive further information via phone so they are served immediately and effectively without creating unnecessary congestion at the bank branches. It should be noted that even though the number of beneficiaries who submitted wrong information has been reduced, a significant number of people still do not have the correct information. Based on this, all beneficiaries are called to make the necessary arrangements so that they receive the extraordinary financial support on time.



Former Co-op employee committed crime because of affair with client

The Supreme Court rejected the appeal of a former scribe at the Co-op who appears to have had an affair with a client and due to this she committed illegal activities, managing to increase his borrowing limit. The scribe was called to take responsibility by paying a compensation to the Co-op, as part of a lawsuit against her. She recently appealed the first instance decision, but this was rejected by the Supreme Court.

 

A solution was found for state guarantees

The House Finance Committee will most likely return the week after Easter with a revised bill regarding lending to businesses that need cashflow with state guarantees of a total €2b. DIKO’s contribution will be a huge influence in the revised bill. This means that the differences between the government and DIKO have been bridged as it comes to the state subsidy bill, which is expected to also be influenced by proposals from other parties. DIKO’s president, Nikolas Papadopoulos had the opportunity to explain his party’s proposal on Monday at the Presidential Palace, before the President of the Republic, party leaders, the House President. He said that they propose the creation of a special fund of €300m to exclusively support SMEs. This is the key that will make this bill popular among MPs. According to the bill, DIKO is proposing the creation of a special fund to finance SMEs worth €250m, which will likely be increased to €300m, which will cover salaries and other operation expenses of SMEs, rents, imports of goods etc. either through direct subsidisation from the state, or through loans that will be granted by banks, that will be later on covered by the state and will be written-off.



MPs apply pressure for rent allowance

At yesterday’s teleconference, members of the House Internal Affairs Committee spent a lot of time pushing for either a rent allowance for vulnerable households and SMEs either for the temporary reduction of certain rent prices, through a relevant decree or a law. Politis’ sources reports that the MPs who participated stressed the huge societal problem as certain people are unable to pay part of their rent or the entire rent when it comes to care-givers who lost their salaries or suffered reductions, or young couples, students, and people living alone who were directly affected by the economic recession caused by the pandemic, either for a large number of SMEs and even bigger businesses who saw their turnover take a dive. The MPs requested that the state immediately intervenes, but the Interior Minister reportedly responded that he discussed the issue with the Finance Minister but the economic cost of such a decision would be huge and the state cannot take it up at this moment where it has increased expenses, in order to support other groups of the population.

 

Cabinet looks to May for relaxations

Politis reports that in today’s Cabinet meeting, the ministers are expected to hold an initial discussion on what should happen after 1 May in relation to the restrictive measures due to the coronavirus as well as the steady opening of some sectors of the market. Besides, next Friday, this matter is expected to be discussed during  a Health Ministry consultation between scientists and the ministry on this matter. Today’s Cabinet meeting is expected to transform the government’s repatriation plans into a decree.



€750 injection to state finances

The state’s finances will increase by €750m this month, as the state receives a loan from local banks. Through this loan, the country’s liquidity will be further enhanced and it will be able to implement the policies it had announced so as to support employees, businesses, the healthcare sector etc. As of Monday evening, it still wasn’t clear whether the two largest banks of Cyprus would participate in the borrowing that will be announced today, and as such the final sum will be possibly a little higher than €750m. The eventual sum will be absorbed on 24 April, and such the government will have cash holdings of €3.5-4b. The interest rate will be announced today. Kathimerini’s sources report that the agreement will be reached with an interest rate close to 0.5%, but nothing has so far leaked as it comes to the repayment period.



Additional instructions at the ports!

The Transport Ministry has issued additional instructions on the operations of the ports and port facilities. Haravgi newspaper wonders why these were issued, when there were assurances that the ports were covered by the Health Ministry’s decrees, and whether the real reason was because existing decrees were not being adhered to. The paper asked the Ministry’s permanent secretary, Stavros Michail, who said that the additional instructions were issued in order to cover all possible aspects that have to do with the operation of these areas, and not because there were any violations or deviations from the Health Ministry’s decrees. The instructions were issued on 9 April and stipulate, among other, that passengers and crews are prohibited from disembarking or boarding ships in or around the port area, including cruise ships and entertainment vessels. They also stipulate that crew members on merchant ships who come into contact with ports or people abroad must go in quarantine for 14 days upon their return to Cyprus.



The day after for shipping

The coronavirus pandemic has affected the entire shipping industry. The big commercial ports have been deregulated, as the demand for products transported by sea has reduced significantly. Speaking to Phileleftheros, Thomas Kazakos, Director General of the Cyprus Shipping Chamber, said that shipping has been in quarantine since the beginning of the year, when the virus struck China. “International shipping has been hit hard, because whatever we consume comes by sea, while cruise ships have suffered the worst impact in the history of the passenger industry,” said Kazakos. “Tankers have done relatively well, due to the drop in oil prices and the upward trend in fares. However, the biggest mass, which concerns dry and general cargo ships, have been hit very hard, due to reduced demand and the freeze on imports and exports from China,” he said. He added that it raises an issue of the ships ‘viability. Kazakos said that even though a final resolution of the pandemic is still far off, there is a glimmer of hope. “Shipping is the first sector to be affected and the first to recover from crises,” he explained. Asked about delays in delivering goods, Kazakos said “our ports are operating as normal. There is no ban on the arrival of ships. Therefore, in terms of trade, all operations are carrying on as normal; it’s just that there are increased controls”.



Extraordinary plenum today – Shipping fees, company fines and lamb slaughters on the agenda

The House Plenum will hold an extraordinary meeting today at 5pm, to discuss among other the bill on the renewal and continuation of the current tax regime for Cypriot shipping over the period 2020-2029; namely the system for the annual tonnage tax rate, which has been approved by the European Commission. The bill was discussed by the House Finance Committee and submitted to the Plenum, with the suggestion that it is voted into law unanimously.



Drillings in stagnant waters

All the companies active in the Cyprus EEZ are now having to revise their plans. Besides the direct impact of the coronavirus pandemic, there is also the uncertainty that is weighing on oil companies, which is preventing them from defining when they will return to normalcy. ExxonMobil and Qatar Petroleum have made the first move, moving the drilling they had planned for this June to September 2021. Eni-Total consortium is expected to follow suit. Kathimerini Economy claims to have obtained the letter ExxonMobil-Qatar Petroleum sent to the Cyprus government, informing it of plans to suspend drilling. The consortium cites the duration of the pandemic crisis, as well as its impact on the international hydrocarbon markets, as the two main factors that will define their future plans for Cyprus but also worldwide. Regarding Eni-Total, sources tell the paper that the current situation has created dilemmas for the companies, which are preventing them from making specific plans. The main questions during internal meetings are, “Is it feasible to get back to normal operations this September?” and “What if there is another wave of the virus in November and December?” The outcome of the pandemic will play a catalytic role in the companies’ plans. The only energy project that does not appear to be affected at present is the plans for the “Aphrodite” gas field. A confirmatory drilling by Noble-Shell is expected to take place at some point in 2021. The commercial exploitation of “Aphrodite” will depend on how the pandemic goes and how the international markets will be affected. As for ExxonMobil – Qatar Petroleum, the letter that was sent to the Energy Ministry lays out the difficult environment in which hydrocarbon companies are currently operating. The paper quotes the letter: “The coronavirus epidemic has substantively accelerated the serious reduction of oil and natural gas prices, to the lowest levels to be recorded in the past century. Naturally, these low prices have had an impact on the financial capabilities of international hydrocarbon companies, in terms of maintaining the capital expenditure they had planned. Neither ExxonMobil nor Qatar Petroleum have avoided the impact, just like the rest of the industry. The two companies have been forced to revise their expenditure portfolios. As a result, the contractor (ExxonMobil, Qatar Petroleum) has been forced to suspend its confirmatory operations in the “Glaucus” block. The Contractor intends to commence activities in September 2021, before the current confirmatory period expires, and to compete the activities prior to the expiry of the first renewal period. The confirmatory operations have been suspended for the following reasons: under the current restrictions in the movement of goods and staff relating to COVID-19, the climate of uncertainty that has been created by the pandemic, the Contractor cannot be sure that they will be in a position to complete the confirmatory programme of the ”Glaucus” discovery, effectively and efficiently. The contractor plans to postpone these operations, in order to carry them out in a period where there is certainty. The impact from the low oil and natural gas prices have forced ExxonMobil and Qatar Petroleum to decide to postpone or even cancel other projects around the world, even in cases that commitments have been made. For “Glaucus”, the decision is that there will be a small suspension. Besides the decisions for the suspension, due to unforeseen circumstances, ExxonMobil and Qatar Petroleum wish to reassure you about their collective commitment to complete their operations in Cyprus and in block 10.”

 

Cyprus’ energy plans overturned

Referring to the postponed drillings in Cyprus’ EEZ, which will negatively impact in the government’s energy programme, Phileleftheros reports that Cyprus has invested a lot in the programme, financially, politically and geostrategic-wise.  It has made agreements in the region and not only. This will not change; however, plans and capabilities, as well as prospects, will inevitably change. The government will keep its channels of communication open with the companies, until they can recommence their operations. Meanwhile, it is clear that Turkey does not care about the pandemic or crisis, announcing that it will send its Oruc Reis survey ship to an area within the Cyprus EEZ, and very close to the point where the Greek, Turkish and Cypriot continental shelves meet. This means that once the seismic surveys are completed, Ankara will start drilling.



Support from Cypriots

With everything up in the air over what will happen once the restrictions on travel are lifted, local hoteliers can’t make any solid plans for this tourism season. The fact that the European Commission president has urged Europeans not to rush to plan any holidays is indicative of how fluid the situation is. Even though plans to lift the restrictions imposed because of the coronavirus has not been discussed properly yet, Cyprus is expected to follow in the footsteps of a small number of other European states, which have gradually started relaxing them. But restarting flights and allowing full freedom of movement will be the last stage. At this rate, it will be July before we start seeing air traffic movement, and this from countries that have made the same progress as Cyprus in dealing with the pandemic. So, with this in mind, local hotels are pinning their hopes on local tourists for the summer season, and then will slowly start efforts to attract foreign visitors again in the autumn.



The beaches are all ours

Phileleftheros comments on the Deputy Ministry of Tourism’s campaign “Stay safe, better days are coming”, saying that one of the positive consequences of the crisis will be that there will be no packed beaches this year, and Cypriots will get the chance to enjoy them all to themselves.



Michalis Zavos: Real estate investment is a stable value

Changes and developments in the field of land development, such as the construction of high-rise buildings, the increased demand in quality and modern housing units along with changes in the banking system, with negative deposit rates, make real estate today, the best and safest investment, said D. Zavos Group CEO Michalis Zavos while speaking to Forbes. Predicting the high demand in real estate, mainly from the local market, the D. Zavos Group has designed two innovative programmes, “Request Residence” and “Request Investment”, in order to meet the needs of those seeking to buy a modern and stylish house at affordable prices. He explained that the investment programme “Request Investment” ensures the buyer/investor a return of up to 5% guaranteed by his Group, which undertakes the entire management of the property. The projects involved are located in the areas of Agios Spyridonas, Petrou and Pavlou, Tsirio, Mesa Geitonia, Agios Athanasios and in the area of Germasogeia, close to the centre of Limassol, the mall, the port and the new casino.



New applications for quarries in Delikipos

Four new applications were submitted to the competent authorities for the construction of separate diabase quarries by the company Investino Ltd in the community of Delikipos in the Larnaca District. Specifically, a report on the four separate applications was prepared by the district officer of the Department of Town Planning and Housing and was forwarded to the Environmental Department on 5 March 2020. It should be noted that 15 days earlier, on 20 February, the Minister of Agriculture announced that any activity or discussion for the creation of a new quarry zone in the Larnaca district would be terminated. Therefore, it is only realistic that the Environmental Department will not accept the applications of the Town Planning Department, without even studying the specific applications. It is noted that on 20 February a meeting was held on the likelihood of creating new quarry zone in Larnaca, where it was decided that the effort should focus on seeking alternatives by utilising the principles of circular economy through the study on Sustainable Development of Mineral Resources in Cyprus, which will cover the period up to 2050 but it will be completed by end of 2021. As such, this issue will be re-evaluated after the completion of the study after which a new policy will be suggested on matters of mineral resources.