10th Economic Ideas Forum takes on Cyprus economic reforms

Speaking at the 10th Economic Ideas Forum organized by the Martens Centre, the official think tank of the European People's Party, and Glafkos Clerides Institute, President Anastasiades louted what has been achieved since 2013 to return the economy back to normalcy.

The President said that the economy was elevated from the "rubbish" investment category and returned to investment grade. A development that, as he said, sends powerful messages.

This, he said, was the result of prudent economic policy. He referred to Cyprus's competitive tax regime, which has become an attractive investment destination. He also referred to the banking system, pointing out that it is now on a more healthy track. The President of the Republic pointed out that the government will continue the effort to address non-performing loans. NPLs have declined, but they remain at a high level. Cyprus, the President said, saw the highest reduction of NPLs in the EU.

Speaking on fiscal issues he said that "last month we were able to issue a 15-year bond at a rate of 2.75% for the first time, clearly showing that macroeconomic stability has returned and trust is restored" .

He added that the government's rational fiscal policy has led to a high nominal and primary budget surplus, noting that the stable and competitive tax and legal status of Cyprus is maintained.

He added that the adoption of specific measures has created economic and investment opportunities, and pointed out that significant investments have been made in a range of sectors, such as ports, marinas, new hotel units, land developments, casino-resort development, investments in tourism, shipping and renewables.

He also pointed out that the discovery of hydrocarbons opens up prospects for the Cypriot economy and for the realization of the vision of turning the Eastern Mediterranean into an energy center that will contribute to stability in the region and to the energy security of Europe.

The Economic Ideas Forum (EIF) is a high-level, award-winning, interactive conference on the most pressing issues facing the economy. Cyprus, which successfully ended its financial assistance programme in 2016, is now one of the fastest growing economies in the Eurozone.

Source: KNEWS

Changes to Citizenship scheme approved

The Cabinet approved new criteria which will see a Cyprus passport being granted in exchange for an investment of €2.5 million, raising it from €2 million, including the purchase of a residency.

Provision were also made for a mandatory donation of €75,000 to the Research and Innovation Foundation and a second €75,000 contribution to the Cyprus Land Development Corporation to be used for affordable housing. In addition, the applicant must have a Cyprus residence permit for at least six months before being naturalised as a Cypriot citizen and has to maintain the required investments for a period of at least 5 (five) years from the date of naturalization, instead of 3 (three) years.

In cases where the investment relates to the purchase of real estate or property as well as in the case of a permanent home-owner, a planning permission, a completion certificate and a bank waiver will be required.

Georgiades said the results of an economic impact study of the scheme was presented before the Cabinet.

He said the scheme was launched in the aftermath of 2013 banking crisis, since then 1,864 citizenships were granted within the framework of the scheme, bringing in €6.6 billion.

“But what emerges from the study, is that trade and investment with a positive contribution to the growth rate of an economy are two different things,” Georgiades said. “The scheme is quite important for the real estate and construction sector, but with little overall impact on the economy,” he added.

The Minister stressed that despite 24% of transactions in the real estate sector were made in the scheme’s framework and the sector has recovered partly because of the scheme, however the economy and its growth rate are not dependent on the specific sector. For the three-year period 2016-2019, the total contribution of the programme to growth is 1.2% GDP out of a total of 13 percentage points, which is the growth rate over the last three years.

The Cabinet decided to alter the scheme’s criteria in order to protect the financial benefits making it more reliable at the same time, said Georgiades. “I believe that the mandatory contribution to the Foundation for Research and Innovation will further encourage the creation of an eco-system of business innovation, while the mandatory contribution to the Cyprus Land Development Corporation is to go to financing housing programs mainly for affordable housing,” said Georgiades.

He said, stricter criteria have also been adopted to ensure due diligence procedures are more stringent and effective, such as the measure of thorough scrutiny of each applicant carried out by an independent international house, the obligation for investors to obtain a Schengen visa and the exclusion of applicants who have been rejected by others Member States with similar schemes.

The changes come after an EU report ‘Investor Citizenship and Residence Schemes in the European Union‘ said Cyprus was not doing enough to ensure transparency to combat illicit and criminal activity.

Cyprus is only one of three EU countries selling passports for investment including Malta and Bulgaria which says it will stop.


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Money to help Land Registry clear backlog

THE INTERIOR Ministry has asked the House Finance Committee to release €3.6 million, part of which will go to pay for services to clear a backlog of cases at the Land and Surveys Department.

Of this €400,000 will pay for private land surveyors to tackle a pile of cases.

According to Philenews, thousands of applications relating to boundary disputes, access applications, land developments and the issuing of title deeds have been pending for many years, leading to long waits and the loss of state revenue.

To deal with the problem the Interior Ministry is contracting services from the private sector and paying employees overtime.

The 2019 budget provides for €700,000 for overtime pay at the department as follows: €300,000 for overtime allowances for staff working on title deeds, computerization of the archives and land surveys.

€200,000 for overtime pay to cover current and pending cases relating to the issue of title deeds of apartments, plots of land, houses in development projects and upgrading of the land information system and the implementation of other current IT projects.

€200,000 for overtime pay for contract employees who help land surveyors.

The ministry is also asking for funds to buy services from the private sector as follows:

€285,000 to collect information for land appraisals (this is the first-time private evaluators will be involved). The value of an estimated 2 million properties are to be re-assessed. The procedure is underway and should be completed by the end of June.

€522,000 for new aerial photography. €80,000 to improve the department’s online platform and implement changes resulting from the European INSPIRE directive (establishing an infrastructure for spatial information in Europe.)

Source:  Cyprus Properties News

Russian market expected to boost Cyprus' tourist industry this summer

Deputy Minister of Tourism Savvas Perdios told the Cyprus News Agency (CNA) on Wednesday that the Russian market is expected to boost the tourist industry of Cyprus this summer.

Perdios is currently in Moscow holding meetings in the framework of the Moscow International Travel & Tourism Exhibition.

In his statements to CNA, he noted that it seems that this year the tourist flow from Russia will be the same as last year, adding that this will give the tourist industry a boost compared to other markets from where indications are negative, as Germany and the UK.

He went on to say that arrivals from Russia were 800 thousand last year.

Moreover, Perdios said that Russian tour operators seem to be ready to invest, to a smaller extent, in winter tourist programmes. He also said that Russian tour operators have begun to represent other Russian speaking countries as Belarus, Kazakhstan and Uzbekistan, as well as Baltic countries.

As regards the British market, the Deputy Minister of Tourism said that they will be waiting to see developments on Brexit, adding that this issue is related to the exchange rate for the sterling.

This will be a difficult year, he added, noting however that we should focus on the opportunities.

Perdios also said that Cyprus should seek to attract tourists from other markets as well, and not only from traditional markets as the UK,

 

Source: Stockwatch

Cyprus joins EU ban on Boeings

Cyprus said Tuesday it has suspended all flight operations of all Boeing Model 737-8 MAX and 737-9 MAX aeroplanes inside its airspace.

The ban came to force at 9pm.

The island said it was complying with an EU-wide suspension issued by the European Union Aviation Safety Agency after the accident involving an Ethiopian Airlines plane of the same type.

EASA has also suspended all commercial flights involving the models performed by third-country operators into, within or out of the EU.

New plan to subsidise home solar systems

Home owners who install residential solar power systems will be eligible for state subsidies up to €1000, according to a government plan approved by the Cabinet on Thursday.

According to Maria Eracleous at Kathimerini Cyprus, the scheme is designed to cover expenses with €250 per kilowatt with a maximum of four kilowatts.

“The subsidy covers one fifth of the total installation cost of a 4 kW solar power system, which is estimated to run about 5 or 5 thousand euro,” Eracleous said.

But there is a cap at the 4 kW threshold, Eracleous added, saying that home owners who wish to install heavier systems with more solar panels won’t be able to get more than €1000 from the government.

According to experts, residential solar power systems that produce 3 or 4 kW could cover up to 90% of the needs in a typical house of about 200 square metres.

“This means that the installation cost can pay for itself in about five years if someone gets the subsidy,” Eracleous said.

The plan also covers home owners without deeds, who could still be eligible for the subsidy if they meet all other criteria.

Additional terms and conditions apply for low income households, such as the possibility to earn subsidies of up to €900 per kilowatt with a maximum amount per residential installation at €3600.

Home owners who wish to combine solar power systems with roof insulation, the state subsidy could run up as high as €3000. In such cases, roof insulation would be covered by €1800 and €300 per installed kilowatt.

This would essentially pay 35% of the total cost for roof insulation, which is estimated to run about five or six grand.

The government budget for this renewable energy subsidy comes to €24.5 million and it is expected that the money would cover over 10,000 applications. 

Source:KNEWS

“Glaucus” recoverability expected to be very high

 

Cypriot Minister of Energy Yiorgos Lakkotrypis said Wednesday that the quality of the reservoir found in Block 10 of Cyprus Exclusive Economic Zone (EEZ) allows optimism that the recoverability would be very high.

The Minister, who was speaking at the 6th Eastern Mediterannean Gas Conference in Nicosia, also noted that more appraisal work is needed on behalf of the company within the next weeks.

Lakkotrypis further said that the discovery in “Glaucus 1” well creates prospects to relook at Block 10 targets, adding that “Calypso” and “Aphrodite” field, had also given an idea of the potential of the EEZ. The Minister said that there were looking forward of the upcoming drilling programme of Eni and Total, waiting at the same time the appraisal well for “Calypso” in Block 6.

Referring to monetization of the discoveries, he said that the Cyprus government has been maturing all of its option simultaneously, with the exception of “Aphrodite” field for which announcements were hopefully expected in the next few weeks. As he said, for the rest of the fields, all the options were still open, including EastMed gas pipeline, the construction of an LNG plant, floating LNG or any other technology, depending on a number of parameters. He added the time has not yet come for the decision and that the big bet for the government was to make the right choice, when the moment comes.

He also referred to Block 7 licensing, saying that negotiations with Total and Eni were expected to begin within the next few days.

The Minister also referred to the East Mediterranean Gas Forum established a few months ago in Cairo between Eastern Mediterranean countries, saying that the group’s primary goal was to make the region more competitive in order to witness more hydrocarbons development and to bring gas more effectively to the markets.

He noted that Cyprus was halfway in his efforts with some pretty good results, and said that Cyprus was not only committed to cooperate with the region but also to lead the effort. 

Speaking at the Conference Executive Vice - President of Eni for Europe and Russia Carlo Vito Russo noted that new discoveries in the Cypriot EEZ added to the existing potential of the Eastern Mediterranean, reconfirming it as a world class hydrocarbon region.

The Eni Vice-President stressed the importance of synergies between the countries and companies in the region and referred to the existing infrastructure in Egypt as one of the ways of exploiting the deposits in the Cypriot EEZ, especially in blocks 10, 6 and 11.

“Clasterization of discoveries located northwest of Zohr in the Cyprus EEZ will be a way to commercialize resources to Zohr facilities and the available LNG capacity in Egypt”, he said, adding that in this respect cooperation between operators and authorities was decidable.

He said that both “Calypso” and “Glaucus” fields confirmed the extension of the Zohr like plays in the EEZ of Cyprus and that the full potential of the play within the Cyprus’ EEZ needed to be fully explored with new explorations and appraisal work.

“Only then we will know the volume of gas that we can add to the ones already discovered”, he added.

He also said that new finding represent important milestones, but partnership were needed in order to make Cyprus a  key player in the potential east med hub.

 

Source: Stockwatch

ExxonMobil makes biggest natural gas discovery in two years off the coast of Cyprus

 

·         ExxonMobil announced on Thursday that it has made the world's third biggest natural gas discovery in two years off the coast of Cyprus in the Eastern Mediterranean.

·         Based on preliminary interpretation of the well data, the discovery could represent a natural gas resource of approximately 5 trillion to 8 trillion cubic feet.

·         The EU is considering developing a gas hub in the Mediterranean key to diversifying its energy sources and reducing its dependence on Russia.

 

 

 

Central Banks calls for vigilance over rising housing prices

 

The Central Bank of Cyprus (CBC) on Tuesday called for vigilance and close monitoring of the rising prices in housing particularly in Limassol pushed by the Cyprus Citizenship by Investment Scheme, called as the Cyprus Investment Programme.
 
The residential property prices index compiled by the CBC for the third quarter of the 2018 marked a moderate increase of 0.3% compared with the previous quarter, whereas its annual growth amounted to 1.6%.
 
However, prices of flats in the southern coastal town of Limassol climbed by 8.7% year on year, the highest of all cities, and 2.9% compared with the previous quarter, marking continued growth associated with the island’s CBI scheme.
 
In the third quarter of 2018, flat prices in Paphos climbed by 5.2% year on year, in Famagusta by 5%, in Larnaca by 2.7%, whereas in the landlocked capital of Nicosia the increase stood at 1.2%, the CBC said.
 
“Despite the moderate average price growth, the growth momentum particularly in Limassol highlights the need for close monitoring of the developments and vigilance,” the CBC added in its bulleting issued today.
 
Investment in real estate is one of the Cypriot CBi’s most popular criteria among the investors interested in acquiring the Cypriot passport, with the CBC noting that property purchases are funded with cash and not with loans provided by the Cyprus banking system.
 
“Strong price pressures, which were analyzed in the previous Index seem to affect coastal areas of Limassol,” the CBC added, noting that flat prices in Limassol record significant increase which are manifestly higher than other areas in Cyprus, while flat prices are accelerating faster than house prices.
 
Moreover, the CBC also notes that residential prices in Famagusta and Paphos, affected by demand foreign demand, record significant increases compared with the capital Nicosia, where price increase is subdued.

 

Source: StockWatch

Hourican to leave from Bank of Cyprus in September

 

Bank of Cyprus Holdings Public Limited Company and Bank of Cyprus Public Company Limited announce that last evening its Group Chief Executive Officer, Mr John Patrick Hourican, informed the Boards of his decision to leave the Group in September 2019 after serving a notice period of six months. By the time he leaves, Mr. Hourican will have spent nearly six years as the Group Chief Executive Officer. Mr. Hourican intends to pursue a commercial opportunity in the United Kingdom.

The Boards will launch, in line with the Corporate Governance Code, the process of identifying a suitable candidate to succeed Mr. Hourican as Chief Executive Officer.

The Chairman and the Boards wish to express their thanks and deep appreciation to Mr. Hourican for his leadership and exceptional service to the Bank of Cyprus Group during the most critical period in its recent history. Mr Hourican has guided the Bank’s restructuring, its recapitalization, a restoration of confidence, and has been instrumental in developing appropriate strategies for dealing with the challenge of coping with large nonperforming exposures, shrinking the Bank to strength, and developing a strong senior executive team that will guide the Bank in the period ahead.

Dr. Ackermann, Chairman of the Boards, commented: “I want to express mine and the Boards’ sincere thanks to John for playing such a pivotal role in the Group’s repair and for devoting nearly six years in leading the Bank of Cyprus Group. John remains committed to leave behind a strong management team and a Bank in a steadily improving financial shape, with restored customer confidence. We will continue to work closely with him in the months ahead, also ensuring a smooth transition to the new leadership.”

In a separate announcement today, the Group announced its Preliminary Full Year Results for 2018. These results present a Bank with high levels of capital, significant surplus liquidity and a clear strategy to complete the de-risking.

 

Source: Stockwatch

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