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Daily Press Review – 15/4/2019

Fitch doesn’t predict a reversal

Politis reports that Fitch appreciates that the recent Administrative Court decision on wages in the Public sector, will not affect the declining path of the country’s public debt, affirming at the same time Cyprus’ long-term foreign currency issuer default rating (IDR) at BBB- maintaining a stable outlook. In its rationale, the agency said that Cyprus’ ratings were based on a broad-based economic recovery and a substantial budget surplus but with the crisis legacy of high public debt and non-performing exposures (NPEs) in the banking sector. According to the firm, the public debt of 102.5% of the GDP is very high, while its declining path stopped in 2018 due to an increase of €3.19b or 15.5% of the GDP in order to support the deal between the Co-op Hellenic Bank, which was somewhat balanced after €800m was paid back.


Fiscal Council was only appointed to praise the government

Haravgi reports that the Fiscal Council didn’t evaluate the impact of the Co-op selloff on the country’s public finances, even though according to its operating regulations, it should have acted so both before and after the government’s deal with Hellenic Bank. Responding to a question by AKEL MP, Aristos Damianou, the president of the Fiscal Council does not intend to investigate the matter in the future, saying that the agreement was checked by the EU supervisory authorities. The article’s author asks what is the role of the Fiscal Council, if everything is checked by the supervisory authorities. Are they just as “yes men” who agree with everything the government (that appointed them) does, no matter if these decisions are beneficial or not for the public?


Many properties go on sale to cover debt

A large number of residential and commercial properties in the Old Nicosia area are managed by Bank of Cyprus and Hellenic Bank, which have either been acquired in debt-to-asset swaps or are being foreclosed. The commercial properties in the historical centre of the city are changing hands, due to their owners’ debt. In an area that is constantly being developed, there are some commercial properties that are being sold in debt-to-asset swaps. The article goes on to list a few highly-valued properties in the historical city centre, held by Bank of Cyprus, Hellenic Bank and Altamira.


New documents revealed for Co-op case

Politis has revealed new documents as these have emerged from the minutes of the Co-op probe meeting and the report of former Co-op chairman Giorgos Hadjinicolas, which show that the bank was working on a plan for a share capital increase of €300m in the end of 2017, while the banking supervisory of the ECB, didn’t left the minimum capital requirement index unchanged (at 14.25%), something which meant that there was no pressure for 2018. The article reports that everything was turned upside down by the of December 2018, with the European supervisors playing a leading role for this reversal. The General Director informed the Co-op’s members that he got a letter for an on-site inspection between 8/1/2018-2/3/2018. This development changed the situation as it came the share capital increase, firstly because they couldn’t issue audited accounts for 2017, due to the uncertainty on how the On-site inspection would conclude, the former chairman of the Co-op said in his report. The local check by the SSM was conducted on 2 March, and showed the preliminary need to increase the forecast of revenue by €816m, resulting in additional capital needs of €600m, since €200m could have been covered by existing capital.


ETYK plans 24-hour strike

Bank employees’ union, ETYK has announced a 24-hour strike at KEDIPES and Altamira on Friday, 19 April. They said that many days have passed since the two-hour warning strike and the timeframe that the employees were given, was not taken advantage of, ETYK says in an announcement. Unfortunately, the company’s Board has not changed its stance and continues to ignore the decision of the Labour Ministry with regards to the the annual incremental pay rises and ATA, which constitute contractual obligations and the reinstatement of the salaries and the benefits of employees of the former Co-op and the decision of the Administrative Court, which justified the Union’s positions.


Court ruling on public sector wages, opened a can of worms

Simerini reports that the government will decide tomorrow on how they will act following the Administrative Court ruling on the wage cuts of public employees, in the presence of the Attorney-General, Costas Clerides. In the shadow of these developments, unrest has been triggered throughout the entire economy with ETYK deciding to demand that the salaries of bank employees are reinstated as well as protests by the employees of the private sector. Some are also worried that this decision may lead to the need to borrow from international lenders once again and the consequences this will have for Cyprus’ assessment by international rating agencies. Specifically, the article reports, ETYK’s demands concern the reinstatement of the salaries of former Co-op employees that remained at KEDIPES or Altamira or they were transferred to Hellenic Bank. They also have these demands for the employees of the Central Bank and the Housing Finance Corporation. ETYK is demanding that all salaries are reinstated, that the incremental pay rises are paid back and that the obligatory contribution to the pension scheme is terminated. The union also demanded that the rest of the banks proceed with paying back any incremental pay rises that were guaranteed by the collective agreements. However, the banks have forcefully rejected this demand, saying that they do not wish to return to the old status quo, which was one of the reasons some banks were forced to close down. At the same time they think that it is an oxymoron that ETYK is demanding that the decision is adopted by banks, while PASYDY clarified that the ruling only concerns those who have taken legal action.


 “Believe in the power of the other”

Hellenic Bank believes in the power of each individual and their potential to realise all their hopes and dreams. Hellenic Bank will try to put this belief into action with its new campaign. An announcement by the Bank says that Hellenic’s new campaign marks the launch of an important social initiative for the Organisation, which turns its attention to the individual and the power that each of us have to make the impossible a reality, if we believe in it. This is how the Bank’s initiative is depicted in the new TV ad campaign of the Bank. The ad shows the unwavering faith of a mother in her daughter’s strength and he constant support so that her daughter evolves into what she truly can become. This proves that by believing in each other’s strength, one can become the impossible a reality. Hellenic Bank adds that they believe in the power of our fellow human beings and that it proves this through this new campaign. The centre of the idea is the individual and everything we can achive when we believe in each other. The announcement concludes that by visiting www.exeistidynami.com, people can nominate individuals that need help or support.


Agricultural parcels are auctioned off

Phileleftheros Economy reports that thousands of fields of arable land and agricultural parcels are being auctioned off by banks, due to their owners’ accumulated obligations. Over 2.000 such plots have been acquired by the banks in debt to asset swaps. Every day they announce that such plots are being auctioned off. The article includes listings by Bank of Cyprus’ REMU, Hellenic Bank’s APS and Altamira.


Ecofin NPLs Action Plan not new for Cypriot banks

Kathimerini Economy reports that Ecofin’s new Action Plan on NPLs that was adopted on Wednesday, will bring about few changes for Cypriot banks. This is what the biggest banks of the country have argued, the article reports, because as they explain the framework that was approved by Ecofin obligates banks to follow the same practices that Cypriot banks have already been following in the last few years (due to MREL requirements). Due to their troubled past, banks are essentially already implementing Ecofin’s framework on NPLs. Cyprus’ NPLs amounted to €27.3b in the end of 2015, reaching €11.1b in 2018. The article reports that the gradual reduction of NPLs, stopped by the end of 2017. This was because almost all the big debt restructuring processes had already been implemented by the borrowers that had huge loans. In 2018 however, Hellenic Bank’s purchase of the Co-op’s assets and the latter’s transformation into a credit purchase company, NPLs with a nominal value of €6.8b were transferred outside the banking sector. The article also reports that Bank of Cyprus sold €2.7b loans to Apollo Asset Management, transferring them outside of the banking system. Finally, Alpha Bank Cyprus transferred to a special purpose vehicle and outside the banking system, NPLs amounting to €400m.


New people to be appointed as members of Central Bank

Politis reports that speculations about the Central Bank haven’t ended with the appointment of Central Banker, Constantinos Herodotou since three more positions must be filled (two executive and one independent board members). There is speculation over who will fill these positions, with the names of Stavros Agrotis, former chairman of the Housing Finance Corporation and Maria Heracleous, head of the representation of IMF in Cyprus being the prominent candidates for the executive positions. Angelos Gregoriades is rumoured of being the prominent candidate for the non-executive position. The article concludes by saying that no decisions have been taken so far.


A lot of money in the banks

Kathimerini Economy reports that the Cypriot banking sector has recovered as it comes to liquidity levels, after the 2013 haircut and the subsequent liquidity crisis and lack of the trust in the banking sector. Cyprus now has the second highest Liquidity Coverage Ratio in the Eurozone, reaching 311%. However, the banking sector lags behind as it comes to profitability and it efficiency ratio amounts to 59%, which is considered very high. Banks are looking into good lending opportunities. However, lending is restricted due to the relevant regulations of the Cypriot economic environment.


The first ‘crash test’ for digitisation

Kathimerini Economy reports that the Cypriot banks have been constantly pushing for digitisation as they are reporting in each of their press releases that their new goal is to technologically upgrade their services based on banks active in bigger and technologically advanced countries. Bank of Cyprus launched an mobile app for Android devices, 40 days ago, with which users can pay without using their credit cards. It is a practice that is being followed in many countries around the world; clients can pay by using only their phones and there are many stores that don’t accept cash payments. According to the Bank’s information for the App between 1/3/2019 and 9/4/2019, 8.708 clients have installed the app to their phones, of which 7.344 (85%) have registered their credit card. 76% are men and 26% are women. The 51% of clients are between 26-40 years old, while as of 9 April, around 26.541 transactions were carried out through digital cards, a total amount of €718.000. 66% of transactions were below €20, which are carried out with a PIN. The above, the article reports, shows that Cypriots are quite accepting to technology. While Cypriots may have been using similar technologies’ such as Revolut, it may be the case that after a Cypriot app has entered the market, more people will be convinced to adapt to this new technology.


New industrial policy

The government’s new industrial policy will go for a vote to the Cabinet in the next few days. The new policy concerns a long-term growth timeframe (from 2019-2030) and is has emerged through the government and the private sector’s joint efforts. The goal of the new policy is to increase the Contribution of Industry to the GDP to 15%, by 2030. The policy will priorities the development of innovative products and added-value services that will contribute to the sustainability and competitiveness of the Cypriot industry. It aims at key sectors of the economy with potential for growth such as the pharmaceutical industry, food industry, cement production, cyclical industries and others which produce technology, innovation and equipment. The Ministry’s goal is to link the industrial sector with the remaining economic activity sectors. They will put forward funding schemes with a view to promote digital transformation and the creation of business clusters. The new Industrial policy will also introduce the new Pattern Attorneys institution and will boost industrial “openness” by upgrading the current online export services. It also intends to create a single national brand for Cypriot industrial products and branding services.


Constantinos Loizides is Astrobank’s new Executive Committee Chairman and CEO

Constantinos Loizides was appointed chairman of the Executive Committee and CEO of Astrobank at a recent Board meeting of the Bank. Loizides previously served as chairman and CEO of Piraeus Bank (Cyprus) Ltd as well as former CEO of Piraeus Bank Egypt. As a member of the Executive Committee of Piraeus Bank he was the head of the group’s international operations division. In the past he was chairman of the Board of Cyprus Airways (2003-2005), as well as deputy chairman and managing director of Hellenic Bank (1996-2005).


Changes at Astrobank

Same as above, with the article reporting that the former CEO, George Appios will now serve as executive director and deputy chief executive officer, Marios Savvides as executive director and Neoclis Neocleous as General Manager.


ETYK applies more pressure on salaries

Bank employees’ union, ETYK,  is stepping up measures at KEDIPES and Altamira, announcing a 24-hour strike next Friday, 19 April at the two organisations. The union said that after the recent two-hour strike, its demands weren’t satisfied as it comes to paying back the incremental pay rises, ATA and restoring the salaries of the former Co-op employees that today work at KEDIPES and Altamira. It is noteworthy that ETYK justifies the decision to escalate measures, referring to the recent Administrative Court decision that justified its position.



Salamis launches commercial shipping link between Thessaloniki, Limassol and Haifa

Salamis Lines has launched a new commercial shipping link between Thessaloniki, Limassol and Haifa to be carried out by its newly-acquired Ro/Ro Akritas starting on April 12. The ship will carry out weekly service, departing from Thessaloniki on Friday, arriving in Limassol and Monday, from there to Haifa on Tuesday and back to Thessaloniki. The Rο/Rο Akritas can transport all types of cargo such as vehicles, general cargo, machinery, trucks, containers and refrigerated goods. The announcement was welcomed by the Cyprus-Greece Business Association as a positive development which will boost trade between Cyprus, Greece and Israel.


Port users’ terms in relation to Larnaca’s port privatisation  

The letter sent by Larnaca’s port users to the Transport Minister Mrs. Vassiliki Anastassiadou regarding Larnaca’s port and marina privatisation on 22 March 2019 was unveiled today by Haravgi.  In their letter they are asking for a settlement agreement that will safeguard the current services of the port. Specifically, among other things, they demand the prohibition of the imposition of any ceiling by either the state or the future Larnaca port operator in the future with respect to the quantities for which the existing users of the port will be served and the prohibition of any increases in the current charges to the port users. If the Transport Ministry doesn’t meet their demands, they will take legal measures.


Turkey will not dare to drill on Cyprus’ EEZ

In an interview with Politis, Mr. Christos Rozakis, former Deputy Foreign Minister of Greece and former vice-president of the European Court of Human Rights commented on the Turkey – Cyprus relations in view of current events regarding Cyprus’ Exclusive Economic Zone. According to Mr. Rozakis Turkey will not begin drilling for oil and gas within Cyprus’ EEZ because of Turkey’s aspirations to have a special relationship with the EU that brings economic benefits. At the same time, Turkey is well aware that both Cyprus and Greece have the right to veto, as members of the EU. This means that it will not risk to throw away such a prospect, especially in a difficult period for the Turkish economy. The second reason, is that there is no logic in the rhetoric and the acts of Turkey. Turkey is not in a position to determine its relationship with Cyprus because its actions are contradictory. On the one hand recognizes the northern part of Cyprus as an independent state and on the other hand, Turkey tries to convince that the northern section has rights in the EEZ of the Republic of Cyprus.


Government Spokesperson: There are confirmed and commercially viable deposits

According to Government Spokesperson, Prodromos Prodromou, there are important indications that additional even larger deposits of natural gas may be found in the Cyprus EEZ. Mr. Prodromou indicates that a number of new research and confirmation drillings not only in Block 10 but also in other Block are scheduled in the immediate term.  He confirms that the agreement for Block 7 is currently in progress, underlining that very strong international companies and interests are involved. The Government Spokesman also referred to the cooperation agreement between Cyprus and France for which announcements will be made shortly. Questioned about ExxonMobil’s subsequent plans, he said that there are scheduled research and development confirmatory drillings both in the same block of the latest discovery as well as in other blocks and that this reinforces ExxonMobil’s activity in the Cyprus energy sector.  At the same time, it is true he said that TOTAL also shows increased interest while other partnership agreements between companies are in progress. Indeed very strong international companies and interests converge within our country’s AOZ he added. Asked about the recent tripartite in Israel, Mr. Prodromou said that the US involvement in the tripartite Cyprus-Israel-Greece is the best proof for the recognition of the value and operational capabilities of the trilateral in the security and stability.  As it is already announced there is similar interest from France for the tripartite Cyprus-Greece-Egypt. There is also the four party scheme with Italy as on the European interest in the EastMed pipeline. There is also interest from other neighboring Arab countries, and such is the case for the current tripartite Cyprus-Greece and Jordan, Mr. Prodromou said.


Kids start to gamble from 12 years old

Dependency on “games of chance” is an addiction and is becoming quite worrisome in Europe. This was the reason why academics and students from Cyprus recently implemented a research program for this scourge of our times, the findings of which are even more serious than the majority of citizens and institutions may have thought. The most significant revelation of the gambling study is that in Cyprus children start gambling from the age of 12.5 y.o., while 75% of the total Greek Cypriot population aged 15 and over play games of chance.


Katerina Flora at PafosNet: Kids in Cyprus start gambling from 12 years old

Same as above. The article also contains statements by Katerina Flora, an academic, head of the research. According to Mrs Flora gambling addicts are not willing to receive treatment at first. This is because they do not realise the magnitude of the problem at the time and they incorrectly believe that they can cure themselves.

One million euros for citizens addicted to gambling. Parliament examines request by the National Betting Authority

The Parliament is currently examining a request for the release of a budget line for the implementation of actions by the National Betting Authority. The aim is to strengthen mechanisms and programmes for the protection of young people and players who are addicted to betting and gambling. Specifically, they requested that an envelope of €1 million is released. Actions proposed by the Authority according to information include: Developing a National Strategy for Responsible Gaming and Pathological behaviour and the creation of a specialised prevention and intervention centre aimed at providing information and support to gamblers and the general public.


Cooperation in economy and tourism with Iraq

Foreign Minister Nicos Christodoulides attended a meeting of Foreign Ministers of Cyprus, Greece, Jordan and Iraq with the participation of their Iraqi counterpart, Mohamad A Alhakim, at the center of which was to find tangible ways to strengthen the relations of the four countries in particular in the fields of trade, economy and tourism. Information indicates that direct flights will be launched to connect the two countries. Also an Honorary Counselor of Cyprus was appointed in Iraq in an attempt to involve Cypriot construction companies in the reconstruction of the country.


Tourism picks up due to Easter

British and Russian tourists who started to book at the hotels of Paphos and Famagusta, respectively, give fresh breath of air to hoteliers. Along with the increase in domestic tourism, hoteliers began to express more optimism for this season, although the data remains rather negative. Brexit, the bankruptcy of various airlines and the dynamic comeback of competing destinations continue to cause a headache for hoteliers who have already started reducing their prices in an effort to maintain – not so much as it comes to profit – the same numbers as last year.


PASIN: 14 private hospitals join

The Cyprus Association of Private Hospitals announced the admission of 14 private hospitals in a Private Medicine Association, and their rejection of GHS. The association stated “this association is an initiative of experienced health professionals, who decided to practice medicine in an autonomous manner, outside of the GHS framework. It is important to note that all of PASYN’s members incorporated into this associated have come to this decision independently, and they considered this independent practice of medicine, outside of GHS, will better provide high-quality health services to Cypriot patients”.


Ayios Therissos joins GHS

The Medical Diagnostic Centre Ayios Therissos, joins the GHS after striking a deal with HIO, after both sides have agreed on everything necessary for their cooperation. This is an important development due to Ayios Therissos being one of the largest, if not the largest, Medical Diagnostic Centre which can provide a significant amount of healthcare services. This agreement followed the announcement of the integration of clinical laboratories into the GHS.


Affordable Pneumonia Vaccines for Refugee Children

Doctors without borders, for the first time used the “Humanitarian Mechanism” in Europe, in order to ensure affordable pneumonia vaccines for the refugee children in Greece, which is the world’s leading cause of child mortality. The pharmaceutical companies Pfizer and GSK are the only two companies supplying this vaccine at the moment, which is the most expensive product amongst today’s list of basic vaccinations.


Inauguration of the Nicosia Rehabilitation Centre (NRC)

Health Minister Mr. Constantinos Ioannou inaugurated the NRC yesterday, on behalf of the President of the Republic, in the presence of both medical and business leading figures, of Cyprus and Israel. The NRC, is the gold standard of rehabilitation centers in Eastern Mediterranean, as it combines modern medical equipment, exceptional facilities – in order to instantly make the patient feel comfortable –, specialized medical staff and a holistic approach. This means that each individual is special and unique and should be treated as such, and that treatment should be adapted individually and they should must not be limited to their medical needs, but extend to their psychological needs as well. During the inauguration, it was announced that the NRC will cooperate closely with the Sheba Medical Center, also known as Tel Hashomer in Tel Aviv, which is one of the greatest rehabilitation centers in the world, and undoubtedly the largest in the Middle East.


A mysterious, dangerous infection spreads across the world

According to the New York Times, last May, an elderly man was admitted to the Brooklyn branch of Mount Sinai Hospital for abdominal surgery. A blood test revealed that he was infected with a newly discovered germ as deadly as it was mysterious. Doctors swiftly isolated him in the intensive care unit. The germ, a fungus called Candida auris, preys on people with weakened immune systems, and it is quietly spreading across the globe. Over the last five years, it has hit a neonatal unit in Venezuela, swept through a hospital in Spain, forced a prestigious British medical center to shut down its intensive care unit, and taken root in India, Pakistan and South Africa. The man at Mount Sinai died after 90 days in the hospital, but C. auris did not. Tests showed it was everywhere in his room, so invasive that the hospital needed special cleaning equipment and had to rip out some of the ceiling and floor tiles to eradicate it. C. auris is so tenacious, in part, because it is impervious to major antifungal medications, making it a new example of one of the world’s most intractable health threats: the rise of drug-resistant infections. Resistant germs are often called “superbugs,” but this is simplistic because they don’t typically kill everyone. Instead, they are most lethal to people with immature or compromised immune systems, including newborns and the elderly, smokers, diabetics and people with autoimmune disorders who take steroids that suppress the body’s defenses.


Doctor collaboration in GHS

The Health Insurance Organisation (HIO) will announce the details of a new initiative for the collaboration of general practitioners (GPs) in the following week. This initiative was decided as an incentive, during the last consultation between the HIO and the Cyprus Medical Association (CyMA). Any GP who will join the General Health System (GHS), and chooses to collaborate with another GP, will receive a one-off payment of €15.000. Doctors will be able to benefit from this initiative on a first come first served basis until the budget of €3m is exhausted.


Clinical Laboratories join the GHS

The association of clinical laboratories responded positively to the GHS last Saturday, when 75 clinical laboratories approved the HIO’s proposals at the Association’s extraordinary meeting. According to the newspaper’s sources, the agreement determines the fees for 1.700 different analyses. According to the representative of clinical laboratories they will continue to provide services to citizens that aren’t beneficiaries of the GHS. The HIO and the clinical laboratories will resume negotiations in order to make some adjustments, that the Association is demanding so that the labs are more smoothly inducted in the GHS, since the Association of Clinical Laboratories is raising questions with regards to possible competition.


Municipality of Peyia is claiming Coral Bay beach

Following the provision of permit regarding the small port in Coral Bay in Paphos to Leptos Group, Peyia’s municipality states that the municipality and the surrounding environment is suffering in the past 30 years due to the port. Municipality believes that any operation on the port should be paused until proper environmental studies are conducted.

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