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Daily Press Review – 1/6/2020

In the press over the weekend and today:

Hellenic’s response about the Stroumbi branch

On 27 May, Hellenic Bank sent a letter to the community leader of Stroumbi in Paphos, to inform him that based on the bank’s plans the Stroumbi branch will operate twice a week, every Tuesday and Thursday. It should be noted, that during these two days the residents of the area will be able to carry out their services, while in other communities there is no branch, and some areas are visited by a mobile unit once a week.

 

Banks: Affected but participating in the restart

The new economic crisis caused by the coronavirus pandemic, which is expected to further affect the profitability of banks, and due to the uncertainty that the moratorium on the payment of instalments, banks will be called upon, to increase their forecasts for possible losses from non-performing loans (NPLs). However, their strong capital position and increased liquidity have contributed positively to funding the restart of the economy.  Central Bank of Cyprus Governor Constantinos Herodotou, has said that he expects the country’s economy to experience a “serious recession” in 2020 due to the coronavirus pandemic. “The economy’s prospects for 2020 and afterwards are dramatically overshadowed by the negative developments of the coronavirus pandemic,” Herodotou stresses in an introductory note included in the Central Bank’s annual report for 2019, which was released on Thursday. The Central Bank Governor says that the institution’s December 2019 projections had noted that in general downward risks for the Cypriot economy continued to be present, which could decelerate its future course. On his part, Ioannis Matsis, Hellenic Bank’s CEO, said that banks will face a “cocktail” of risks in 2020, due to the coronavirus crisis, while analysing the bank’s financial results for 2019. He stressed that Hellenic’s greatest asset is the retail character of its portfolio, which makes it less vulnerable compared to other banks that have more exposure to entrepreneurship. Mr Matsis also assured that the bank, by building on its strong capital position and very high liquidity, will help both the society and economy. He said that in terms of capital index, Hellenic Bank is in the top five systemic banks in the Eurozone, while in terms of liquidity is first among the five best banks in the Eurozone.

 

Vote of confidence from JP Morgan

The important changes and improvements made to the Cypriot banking system and the regulatory framework are confirmed by the partnership of Hellenic Bank with JP Morgan, one of the older US Financial institutions with a global reach. The US giant’s history dates back 200 years, offering banking services internationally, while its assets exceed, according to estimates, $2.6 trillion. According to a recent announcement, Hellenic Bank has reached a deal for partnership with the US giant, increasing its number of partnerships with foreign banks to 3. Beyond JP Morgan, Hellenic Bank is also cooperating with Bank of New York Mellon and Citibank. In general, this is a significant development, given the difficulties that Cypriot banks are facing due to the small number of partners they previously had for carrying out dollar transactions. The Director of Communications and Public Relations of Hellenic Bank, George Sklavos said regarding the arrival of J.P. Morgan, “that start of our partnership with the American giant J.P. Morgan is reflects trust in the strenuous efforts that the Bank had made in AML and compliance in the past few years”.

 

The candidates

Under other circumstances, the interest for KEDIPES’ serviced loans, valued at €1.2b, would be particularly strong from the banking institution that have some significant displacement. However, the uncertainty of this period may be reducing interest. In fact, both Bank of Cyprus and Hellenic Bank would have no problem increasing their loan portfolio overnight, but this will depend on various factors such as the quality of new loans and the impact they will have on their capital.

 

Covid-19 enhanced digital banking

All of Cyprus’ financial institutions have made a significant turn towards digital banking, due to the situation created by the coronavirus. Hellenic bank focused on its digital channels by providing free issuance of credit cards, the ability to register for its digital channels, without having to visit branches and without any physical contact. It also increased the amount of cash that can be withdrawn from the banks’ ATMs, from €10,000 to €30,000. Based on the Ministry of Health’s decrees it also reduced the branch network and enhanced its customer service call centre, while taking all necessary protecting measures. In addition, based on the technological infrastructure of the bank, a large part of its employees were working from home.

 

Digital channels mean convenience

Hellenic bank was the first bank in Cyprus to give its customers the ability to directly register to its digital channel through the internet without any physical contact. We may not realise the advantages of technology on a daily basis, however, the pandemic has forced us to see clearer how simpler and easier life can be by using technology. Hellenic Bank has recently made a conscious and stable turn to its digital channels, creating an exception infrastructure so that it can fully meet the requirements of the new reality.

 

CSR strategy based on 4 pillars

Sustainable development is no longer possible to be achieved without the contribution of organisations, stakeholders, governments as well as businesses. The contribution is made through the proper implementation of strategic programmes of Corporate Social Responsibility (CSR) of each organisation, which are the tools to achieve a lasting sustainable development. At Hellenic Bank we consider the finance sector to be a vital factor for the achievement of sustainable development. As suck, we have mapped out 4 pillars of CSR priority which make up our strategy. The 4 pillars are the person, the market, the environment and the society.

 

 

Financial Ombudsman’s call for ESTIA

The Ministry of Finance announced an extension to the ESTIA scheme, providing a selected group of borrowers one more chance to submit all the necessary documentations, and the Financial Ombudsman Pavlos Ioannou called on any selected borrowers to submit their applications quickly with no further delays.

 

Private sector fearful of pay cuts

The salaries of the private sector are some of the most sensitive issues that the coronavirus crisis leaves behind. The question on everybody’s mind is whether thousands of employees will see their salaries maintain the same levels as in 2019, or whether there will be a small or large “haircut” due to the conditions created in the economy and business. Representatives of unions have already started receiving complaints over pay cuts and employees being informed about dismissals.

 

Factors that damage Cyprus’ image

For yet another year, Cyprus scored moderately on the Corruption Perception Index, placing even lower among the total 180 countries, having a significant negative impact on the economy, especially in the midst of this global pandemic. In recent years, Cyprus has been constantly changing spots on the Corruption Perception Index of the Transparency International. This is one of the most reliable indexes regarding corruption and transparency, and Cyprus ranked 41 (dropped 3 spots) in 2019.

 

They have no shame

Opinion article by DIKO executive member Antonis Sivitanides, who concedes that the government took the right measures to deal with the coronavirus pandemic, but then accuses it of going back to its forceful, arrogant ways by withdrawing the bill for state-backed funding to businesses. He said the parliament had merely proposed amendments to the bill, which is within its mandate. He adds, among other, that the public rightfully doesn’t trust the government that appointed the “best of the best” at the Co-op and Hellenic, prevented the Auditor-general from overseeing and eventually closed the Co-op and gave it to Hellenic.

 

Where the Central Bank cut back on expenses in 2019

The Central Bank reduced its administrative expenses by €185,000 in 2019 compared with the year before, from €8.11m to €7.92m. According to an analysis of data from its annual report, the CBC cut back on spending in most expenditure categories. In 2019, it spent €235,000 less on advisory services (from €319,000 to €84,000), and €1.03m less on legal fees (from €2.92m to €1.88m).

 

A place of learning

The EBRD has launched a free online learning programme to support and provide advice to small and medium sized enterprises (SMEs) that are facing difficulties because of the coronavirus pandemic. Such businesses are vitally important in economies the EBRD invests in. The Know How Academy is a central learning hub on the bank’s website, where businesses can access practical assistance, including educational material and advice on how to manage crises, by experts in the sector, while they can also participate in a debate forum.

 

Help for borrowers

The Finance Ministry has prepared a Q&A with information for borrowers who want to join the moratorium on loan instalments, answering frequently asked questions such as the deadline for applying to the scheme and whether someone can join if their loan is in arrears.

 

Petrides to update parliament on measures

Finance Minister Constantinos Petrides is scheduled to update the House Finance Committee today on the new package of measures announced for the economy. The opposition parties are expected to seek answers and clarifications on the terms and criteria for granting liquidity to businesses. Certain parties have already raised questions over the number of beneficiaries, the criteria and whether all SMEs and self-employed will have access to funding.

 

What does DP World Limassol and the Mediterranean Hospital have in common?

Digitisation with the help of the latest blockchain technology will pave the way for the next stage of digital evolution and Cyprus is looking to implement this both in the private and public sectors. In this framework, it should be noted that over the past few weeks we saw two agreements relating to the advancement of digitalisation with blockchain technologies. The first concerns the medical sector and specifically, the Mediterranean Hospital with VeChain technology. The second, concerns the Limassol Port which through DP World and with the technology of AP Moller – Maersk and IBM is bringing “genius” cargo handling processes.

 

European Commission approves Finnish scheme to support maritime companies

The European Commission has greenlit a €600m Finnish aid scheme to support maritime companies, so that they can deal with the consequences of the coronavirus pandemic. The proposal was submitted by the government of Finland and was approved based on the temporary state aid framework approved by the European Commission on 19 March 2020 as amended on 3 April and 8 May 2020. Commenting on the approval of the Finnish proposal, the European Commissioner for Competition Margrethe Vestager said distinctly: ““This €600 million Finnish guarantee scheme will help those maritime companies that transport essential supplies to Finland and are affected by the current coronavirus crisis to cover their immediate working capital needs and continue their activities. This is the first scheme we have approved specifically designed to support the maritime sector in these difficult times. We continue to work closely with all Member States to ensure that national support measures can be put in place in a timely, coordinated and effective way, in line with EU rules.”

 

Thanks to Cyprus Union of Shipowners

The Deputy Ministry of Shipping welcomes the continuous support and feedback of the Executive Committee of the Cyprus Union of Shipowners for the urgent needs of the government in tackling the consequences of the coronavirus pandemic and stresses the substantial support and effective contribution of the Union in this battle. After the initial support of the Union to immediately support Cyprus’ healthcare equipment, with 10 ventilators worth about €500,000, a donation of the Vice President Mr Polys Hadjiioannou. Mr Hadjioannou covered the entire amount of €200,000 for the actions taking place in March, concerning the provision of food and essential items to Cypriot students who live in the UK. The Deputy Ministry of Shipping thanks Mr Hadjioannou and stresses that with his initiative he has become a supporter of the country in the battle against the coronavirus and the consequences brought on by the measures to contain the pandemic. The Deputy Ministry also extends particular thanks to the Executive Committee of the Cyprus Union of Shipowners and the members Mr Kikis Mouskas, Antonis Mikelides, Charis Zachariou, George and Vasilis Michael and Captain Koch, who are actively contributing to Cyprus’ efforts to tackle the Covid-19 pandemic.

 

First measures over Larnaca port-marina project delay

Larnaca’s local authority will take action if they do not receive an official update by the relevant ministry on how the port and marina project is moving along. The Mayor, Andreas Vyras said that the Municipality is already planning on the next steps, if the delay in signing the contracts between the government and the Kition Ocean Holdings consortium continues. According to the information of the local authorities, the agreement is being reviewed by the Legal Service for three months now, and the Municipality of Larnaca believe that it’s unacceptable that there is such a great delay in preparing the contract, especially since the government itself has officially stated that all the development projects of the country, that will create new jobs, need to proceed quickly. In fact, the Larnaca port and marina project, is considered as the biggest infrastructure project to ever take place in Cyprus, as its total cost will amount to €1.2b. The Mayor of Larnaca said that, there is a scheduled council meeting on Monday 1 June, during which they will decide on some measures, which will take place in the framework of the Ministerial decrees on the coronavirus. “It is likely that these measures entail a first protest from the part of the Municipal council, until we are in a position to also mobilise the people. I believe that there won’t be a need for an escalation of measures. If, however, we do not receive any official update on the matter by next week, then we will be obliged to announce measures that will have a chain reactions”, Andreas Vyras noted.

 

EuroAsia hopes for 2023

EuroAsia Interconnector, the official Project Developer of the European Project of Common Interest (PCI 3.10 Israel Cyprus Greece-Crete) warmly thanks the governments of Cyprus and Greece for their full political support. According to a relevant announcement, the official Project Developer has submitted to the ‘Connecting Europe Facility’ (CEF) for the implementation of the interconnection of Cyprus with Greece through Crete by December 2023. EuroAsia Interconnector expresses particular gratitude to the President of the Republic of Cyprus and the Prime Minister of the Hellenic Republic, as well as the two competent ministers, Greece’s Energy and Environment Minister Kostis Hatzidakis and Cyprus Energy Minister Giorgos Lakkotrypis, for their full coordination and support to the electricity interconnection which ends the energy isolation of Cyprus, the last energy isolated European Union Member State. EuroAsia Interconnector remains committed to the timely implementation of the 1208km subsea electricity interconnection that links the electricity grids of Cyprus and Greece through Crete by December 2023. The EuroAsia Interconnector, as a leading European Project of Common Interest, is eligible for funding from the European Union’s ‘Connecting Europe Facility’ (CEF) financing resource for projects up to €8.7b.

 

Ankara turned the crisis into a strategic opportunity

The Covid-19 pandemic does not terminate Turkey’s plans for the energy resources of the Eastern Mediterranean. On the contrary, it believes that the coronavirus is creating new opportunities in the region, which it intends to take advantage of. The Turkish energy plans concern a large region spreading from the coast of Libya to the coast of Turkey and Cyprus. Adding fuel to Ankara’s view is a new report by the Turkish pro-government centre of strategic studies “Seta”, entitled “Developments in the Eastern Mediterranean during the coronavirus crisis”. The new study reveals that the pandemic highlighted new opportunities in the Eastern Mediterranean for Ankara and gives us an idea about the next steps. According to Seta, the suspension of operation and explorations by the international energy giants in the Cyprus EEZ created a new situation in the energy map of the region, which could benefit Turkey. Seta recalls that recently, the American Exxon Mobil suspended its operations in Cyprus’ Block 10 and that the companies ENI Italy and Total France has also suspended their operations for one year.

 

EastMed and its impact on Cyprus, by Charles Ellinas

The first quarter of 2020 has proved to be very difficult for natural gas and LNG producers. The rapid increase in the production and export of LNG in 2019, in combination with a mild winter which limited a further increase in demand, led to an inflation of LNG in markets and unprecedented low natural gas prices. This was intensified by the impact of the Covid-19 pandemic on the global economy, further reducing demand and natural gas prices. The overproduction of Natural Gas, intensified by the pandemic, has disincentivised many investors and funders of new projects. There are more than 12 LNG units that were scheduled for final investment decision in 2020. If the buyer companies continue to be hesitant to sign long-term agreements, most of these could be postponed and some could be cancelled. As most companies announce significant cuts for this year and the next, new investment decisions will be delayed. For example, Exxon Mobil has already announced that it will not be proceeding with the FID for the Rovuma LNG terminal in Mozambique this year. Even more radically, Shell left the project Lake Charles II LNG in the US. However, some projects, especially those with low cost are still being developed. Qatar LNG confirmed that its plans to boost its LNG production by 30 mtpa by 2025 and by another 18 mtpa by 2027 are moving forward without interruption. Qatar LNG produces the cheapest LNG in the world.

 

Energy environment in the Eastern Mediterranean amid the pandemic

Analysis: The coronavirus pandemic has led to a reversal of international energy plans, and particularly those in the Eastern Mediterranean. And in extent, Cyprus’ energy programme. The pandemic crisis combined with the international conditions in the energy market have led Eni-Total and ExxonMobil-Qatar Petroleum to suspend their drilling activity in the Cyprus EEZ until 2021. But we should note the fact that for the time being, the companies’ activities in the Cyprus EEZ remain in their budgets and this is particularly positive, while their contracts with the Republic of Cyprus remain in place, as do the prospects for discovering and confirming very promising natural gas deposits, which could ensure that Cyprus meets the targets of its energy policy.

 

 

Energy hub

Israeli newspaper Haaretz reported that while 18 months ago, the Eastern Mediterranean looked like it was going to turn into an energy hub, the significant drop in oil prices and demand because of the pandemic has reversed this prospect. Particularly for Cyprus, it notes how Eni and ExxonMobil have suspended their drilling activities, while it predicts that Europe will turn to alternative energy sources in the long term.

 

The end of the political plan

Analysis by Kyriakos Pierides, who says Cyprus is currently facing the worst-case scenario, as the companies licensed to drill in its EEZ have postponed their activity, while Turkey has taken advantage of the situation and is roaming the Cyprus EEZ unhindered. He says, among other, that internationally, energy companies are revising their plans. Eni has withdrawn from Australia, Shell has withdrawn from the US, Total is focusing only on its Mozambique deposits and even the “super-powerful” ExxonMobil has marked significant losses. Egypt has reduced its production by 30% due to lack of demand, while in Israel, Delek is selling out in order to survive. Noble, meanwhile, is on the brink of bankruptcy. He refers to previous estimations by energy expert Charles Ellinas that the companies active in Cyprus will possibly suspend their drilling activity beyond 2021.

 

Change of leadership in PASYXE

Philokypros Rousounides is the director general of PASYXE, following the departure of Zacharias Ioannides after 30 years of service. In an announcement, PASYXE says that the board of the association ratified the appointment of Philokypros Rousounides in the position of Director-General from 1 June 2020. It is added that in order to choose the new director-general, they assigned PwC to issue an open and transparent process. According to the same announcement, Rousounides aged 42, hold an MBA in International Business and Ex Management from the LSBU in the UK and has a lengthy experience in senior positions of big companies such as DHL, Global Medical Group,  Cobalt Air, ETA Group and Cyprus Airways.

 

No hotels in June

We are in the first half of the year and the losses are certain for the tourist industry. At this moment, the image of the coastal areas of Cyprus is disheartening. In previous years, the beaches and hotels were full of life in this period. Indicatively in June half a million tourists visited our island last June. The 20th of June is a landmark day, as it will be the second phase of the opening of airports and this is where most of the tourist accommodation are expected to open. However, speaking with different hoteliers, who either own franchises or small accommodation, either in Paphor or Ayia Napa, one realises that they are concerned about the loss of the British and the Russians. As such, July has been set as the landmark month for opening their hotels, as they consider June as a lost month.

 

Developments in Akrotiri Salt Lake

The development in the area of Akrotiri Salt Lake is booming where, to date, the MyMall shopping centre dominates with its presence. The investments in the area are significant and a number of major developments are in the pipeline, this time focusing on the integrated casino-resort City of Dreams Mediterranean, while a series of residential developments are being promoted by both domestic and foreign big businesses. The same area also hosts the largest port of Cyprus, the Fasouri Watermania – Waterpark Limassol, while several other large projects have been authorised such as the Limassol Greens Golf Resort, and EAC’s solar power plant. According to the Department of the Environment, the wider area currently needs some additional infrastructure to support the active urban areas, but also to ensure the complete protection of the environment regarding the existing and scheduled residential and commercial developments, an area which borders the Akrotiri Salt Lake.

 

Further lifting the restrictive measures

Everything is going well in dealing with the problems caused by the coronavirus pandemic. Even though it is 12 days since the second stage of lifting the measures (21 May), there have been no problems and the cases that are being announced everyday are essentially zero. The government and scientific team are considering expediting the lifting of the restrictive measures, regarding wedding events, christenings, festivals, concerns, theatres, cinemas, casinos, playgrounds in both indoors and outdoors areas.

 

The Ministry of Health must respond

A reader named “Markou” wrote to Politis about KEFEA’s statements over the vaccine issue, nothing that the procedure followed by the Ministry of Health leads to the cessation of circulation and availability of many important vaccines from the market. KEFEA even argued that the way the Ministry chooses to deal with this issue will lead to the presence and availability of only one vaccine for each illness. The Ministry of Health needs to inform the public over vaccines in the GHS.

 

Open front in the public sector

The open front remains in the state health sector, as doctors’ unions have received the revised financial proposal from the state health services organisation (OKYPY), over the incentives that will be given to specialty doctors to offer their services as part of the GHS, and they are expected to meet today so as to decide whether they will accept OKYPY’s proposal or reject them, and in turn proceed with the implementation of measures that they had announced last week. In essence, according to sources, OKYPY has offered financial incentives which increase on average the annual income of specialty doctors by €31,153, which corresponds to €2,596 every month (additional to their current income). The total available budget exceeds €20m and according to the proposal it includes a 60% horizontal increase and the remaining 40% will be calculated according to each doctor’s independent productivity.

 

Parents and Paediatricians concerned over lack of vaccines

Parents and paediatricians are concerned recently over the lack of available vaccines, due to the restrictions on flights, and stocks are very limited at the moment. This situation creates further problems in the procedures followed as part of the GHS, as vaccines included in the National Immunisation scheme, are purchased by the Ministry of Health and are administered to children through their GHS paediatricians. Due to the very limited stock of vaccines, the Ministry of Health found a temporary solution, and called on doctors to refer children to Vaccination centres of the public sector until the necessary quantities reach Cyprus. The Cyprus Paediatrics Society (PEK) issued an announcement stating their deep dissatisfaction with the recent developments, in an open letter to the Health Ministry.

 

40 million children worldwide have already started smoking

40 million children between 13-15 years old have already picked up smoking, said the World Health Organisation (WHO). The organisation announced on Friday a new toolset for students between 13-17 years old, to warn them about the tobacco industry’s tactics in attracting them so they get addicted to addictive products. Every year, “the tobacco industry invests more than $9b to advertise its products. Increasingly, it is targeting young people with nicotine products in an attempt to replace the 8 million people who are killed by these exact products every year”. WHO’s campaign for World No Tobacco Day focuses on the protection of children and young people.

 

How to help someone quit smoking

Cigarettes contain nicotine, which is an addictive substance. It creates changes in the brain and the person seeks this substance even more. When somebody quits smoking, the body reacts and in turn makes the person feel unwell. This is a known symptom from nicotine withdrawal. But there is something else besides nicotine. An important source of support and motivation for a person attempting to stop smoking, will be their family and friends. During the lockdown due to the coronavirus, we all felt that the most important thing in life is health, and good health needs daily care and effort, such as exercise, healthy diet, sufficient and high-quality sleep, good mental health, and of course, no smoking. Unfortunately, there are many reasons why smokers cannot simply give up on this harmful habit. The need to escape the stress of daily life, and to relax are some of the most important ones.

 

Youthful and shiny skin…except for smokers

Many studies have shown that smoking makes the skin appear older by at least a decade, with a general rule of thumb that the more cigarettes someone smokes, the drier and prematurely old the face will appear. It is scientifically proven that smoking is severely harmful to health, as it is associated with dozens of problems, from infertility and heart disease to cancer. What people do not understand however, is that it causes irreversible damage to the skin, with the face being the main part of the body where these effects are more visible. Smoking is the second most important factor in premature aging of the skin, after excessive sun exposure.

 

Quitting smoking can help you lose weight

Can quitting smoking help you gain or lose weight? There are many studies into this question.  Nicotine addiction is the main reason why quitting smoking is such a difficult and time-consuming process. The benefits, however, are very important and immediate, as your blood pressure can reach normal levels after just 20 minutes. According to research, an average person who just quit smoking will gain around 4-5kg, however this is not true for everyone. You can quit smoking without gaining weight. There are many reasons why smokers gain weight after quitting, and when you are informed of them you can counteract them and avoid gaining weight.

 

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