31/10/24

Energean has completed a significant investment to increase oil production at its Karish field off Israel’s coast, with critical equipment being shipped through Limassol port.

The M10 equipment (second oil train module) for the FPSO Energean Power was loaded onto a specialist vessel at Limassol port for transport to the offshore site. The M10 is expected to be operational in approximately six months, with Energean targeting daily oil production of 20,000 to 25,000 barrels from the field. In the first half of the year, average production from the Karish and Karish North fields in Israel reached 104,000 barrels of oil equivalent per day, peaking at 137,000 barrels in June. This included 2.5 billion cubic metres of natural gas, with the company supplying over 40 percent of Israel’s domestic gas demand. The company’s next production target is the Katlan field, scheduled to begin operations in approximately three years.

ECONOMIC NEWS

In a bid to ease energy expenses for vulnerable groups and promote sustainable housing solutions, the Cabinet approved a set of medium-term measures. The measures are designed to support households and young families, based on budgetary conditions.

Key initiatives include:

1. Electricity Bill Subsidy will now cover low-income pensioners and single-parent families. This extension will benefit approximately 22,200 low-pensioner households and 10,700 single-parent households eligible for the allowance. The subsidy is set to last until December 2025, with an estimated cost of €25 million.

2. Enhanced “Photovoltaic for All” Scheme: An additional €15 million will be allocated to expand the “Photovoltaic for All” program, which allows families, particularly large ones in smaller homes, to access solar power systems without initial payments. This initiative aims to assist about 3,000 families.

3. “Save-Energy Upgrade” Scheme: The Cabinet is also approving €30 million for the “Save-Energy Upgrade” program, aimed at improving energy efficiency in existing homes. This program will be available exclusively to individuals.

4. Zero VAT on Essential Items: The government ratified a previous announcement to implement a zero VAT rate on essential items such as children’s diapers, baby formula, adult diapers, feminine hygiene products, and fresh fruits and vegetables. This measure, which takes effect on November 4, 2024, will be in place until the end of 2025, costing an estimated €5.1 million.

Housing Initiatives:

– The Ministry of Finance will begin accepting applications for a 2% interest rate subsidy on mortgage loans for first homes purchased or constructed between January 1, 2022, and December 31, 2023. This program targets families with an annual income of up to €50,000 and has a total budget of around €33 million.

– Starting November 15, 2024, the Ministry of Interior will accept applications for the “Renovate – Rent” plan, aimed at revamping vacant homes and offering them at affordable rents (30% below market rate). This initiative involves 1,000 housing units and has a total estimated cost of €25 million, including tax relief for landlords.

– Additionally, a Housing Subsidy Scheme will provide one-time grants between €20,000 and €50,000 for young couples and individuals up to 41 years old, with about 400 expected beneficiaries and a total cost of €15 million.

Media reported that during the talks between U.S. President Joe Biden and President Christodoulides at the White House on Wednesday, energy issues (the recent contacts of the Cypriot side had with Chevron and Exxon) and the prospects of American investments in Cyprus (such as the privatization of the port of Larnaca) were also discussed. 

A proposal to limit cash transactions for goods and services to €10,000 was discussed by the House Institutions Committee, in an effort to help prevent money laundering.

Finance Minister Makis Keravnos assured that the government is committed to finding lasting solutions to the economic challenges facing Cypriot society, highlighting the importance of incorporating feedback from the public and political stakeholders.

Speaking at an Akel economic forum, Keravnos said that 13.9 per cent of Cyprus’ population is at risk of poverty (the EU average poverty risk is 21.4 per cent) & the government will continue to pursue a “balanced, socially oriented economic policy,” aimed at meeting both the community’s needs and the political expectations.

The minister then underlined the need to diversify Cyprus’ economic model, prioritising both new sectors and traditional industries.

Former Transport Minister Marios Demetriades and some of his relatives linked to the family law firm have been referred to the criminal court over the golden passport scandal.

A total of eight individuals and two legal entities face 59 charges including bribery, corruption, money laundering, conspiracy to defraud and violating the Council of Europe convention on criminalising corruption.

The defendants will appear before the criminal court on January 16 where they will be read out the charges.

In September, the ten priciest property sales in Cyprus totaled €30 million, with Limassol dominating the list, accounting for 62% of these high-value transactions. The most expensive property was a €5 million land plot in Yermasogeia, in Limassol’s Amathus municipality. The Limassol district recorded six of the top ten sales, totaling €18.5 million. Paphos followed with two transactions worth €6.5 million, while Nicosia and Larnaca registered one each, valued at €2.9 million and €1.8 million, respectively.

Across Cyprus, the 50 most expensive property transactions in September collectively amounted to €57.5 million, with Limassol properties making up 43% of the total value and Paphos properties representing 22.8%.

30/10/24

ENERGY RELATED NEWS

Philenews (Chrysanthos Manolis) reported that according to info., the efforts made by the Ministry of Energy to convince the European institution CINEA (European Climate Infrastructure and Environment Executive Agency) not to insist on a return from the Republic of Cyprus of the 68.6 million euros spent for the terminal in Vasilikos (from the total European sponsorship of 101 million euros) have not been fruitful.

CINEA recently replied to the Cypriot authorities that the justification they sent did not offer anything new or substantial to convince CINEA and the European Commission not to insist on withdrawing the sponsorship. Therefore, the original decision to refund the money has not been revoked. Under these conditions, the Government will make a new effort to submit to CINEA a new, stronger argument but the chances of success are not high.

In July 2024 it became known that the EU, and in particular CINEA, had asked the Cypriot authorities to return the entire amount that had been given as sponsorship for the construction of the terminal in Vassiliko. The decision to refund the amount (68.6 million) was due to the information brought to the attention of CINEA and the EU Court of Auditors about irregularities and illegalities in the process of awarding the tender for the terminal to the Chinese consortium.

Philenews (Eleftheria Paizanou) reported that the Ministries of Energy and Finance rejected a proposal by the Cyprus Transmission System Operator (TSO) and the Electricity Authority to install three central storage systems (at substations) so as to protect the safety and stability of the electrical system in times of need/emergency. The reason is that the Ministry of Energy has decided that hybrid storage systems (batteries placed in photovoltaic parks) are a priority. Although the EU had agreed το give a deviation and allow the EAC to install the three systems, the private sector reacted (mainly behind the scenes) insisting the Ministry proceeds with a subsidy plan for storage systems at PV parks.

At the House energy committee, MPs and officials continued debating the high cost of living impacting low-income households in particular.

The President of the committee MP Kyriacos Hadjiyiannis said that, in Cyprus, energy is controlled by “a clique” which is “interconnected and has common interests and goals”. The chairman of the Electricity Authority of Cyprus (EAC) had to fend off criticism that his organisation isn’t doing enough to contain the price of electricity. Giorgos Petrou conceded that the EAC lacks the technical know-how to purchase fuel whenever prices are relatively low. The EAC replenishes its fuel stocks approximately once a month, rather than buying in bulk once or twice a year. A major reason is that the organisation does not have the facilities to store massive amounts of fuel.

With a statement, the trade unions of the Electricity Authority criticize the Ministry of Energy for hasty and rash actions or decisions in relation to the electricity market and the emerging natural gas market.

They also warn that if the Ministry of Energy does not take the appropriate decisions without further delay, so that the two new flexible power generation units and storage system, are installed at the Dhekelia station, there will be a serious problem in the adequacy of electricity, with the risk of total blackout. The risk of power shortages is made more serious, the unions warn, by the delay in the arrival of natural gas.

ECONOMIC NEWS

According to Kathimerini’s Pavlos Xanthoulis, Brussels and Berlin are working to upgrade the Turkish Customs Union, viewing it as a pathway to strengthen economic ties with Turkey. This initiative comes as Euro-Turkish trade reached a staggering €206 billion in 2023, marking a significant increase from previous years. Turkey now ranks as the fifth largest trading partner of the EU, contributing 4.1% to its total trade volume, up from 3.3% in 2022.

The potential modernization of the Customs Union could more than double the trade volume between Turkey and the EU, which would provide a significant boost to the Turkish economy. Countries like Germany and France, which have substantial investments in Turkey, are expected to gain the most from this upgrade.

According to Kathimerini’s Dorita Yiannakou, Cyprus is set to establish a new National Sanctions Implementation Unit (NSIU) in the coming year, aiming to improve how financial sanctions are enforced in the country. This unit will replace the current Sanctions Control Unit (SCU) and the Financial Sanctions Advisory Committee (FAC), both of which operate under the Ministry of Finance. The NSIU will operate independently, similar to the UK’s Office of Financial Sanctions Implementation (OFSI). This change is expected to help coordinate better efforts among various organizations, including banks and law enforcement agencies, to make sure that sanctions are applied effectively. Since August, a team from Deloitte UK has been working with the Ministry of Finance to evaluate how sanctions are currently implemented and to make recommendations for improving the system. The NSIU will have several important roles, including:
– Coordinating Sanctions: The unit will work with different government agencies to ensure that economic sanctions are applied consistently.
– Handling Requests: It will assess requests for exemptions from sanctions and look into any possible violations.
– Providing Guidance: The unit will offer advice and clear instructions about how sanctions should be enforced.

Both European and American officials are pushing for the NSIU to be set up quickly. They believe that having this unit will help Cyprus fight financial crimes more effectively and improve the country’s international image.

Kathimerini reported (Panayiotis Rougalas) that in a move that could reshape Cyprus’s financial landscape, Parliament recently passed a European Directive that makes it easier for foreign investors to buy non-performing loans (NPLs) in the country,

Until now, if an international investment fund wanted to buy NPLs in Cyprus, it had to create a local company and meet Cypriot regulations under the supervision of the Central Bank of Cyprus (CBC). Now, with this directive, these funds don’t have to go through these steps. Instead, they can use their existing European licenses to buy troubled loans in Cyprus, as long as they assign a local company to manage them.

This means big players from across Europe can now more easily buy NPLs in Cyprus by partnering with established companies here, such as Themis, Gordian, and Altamira, which specialize in handling these types of loans.

Non-performing loans still make up a large chunk of the credit portfolios held by Cypriot Credit Acquisition Companies (CACs). According to a recent report from the Central Bank of Cyprus, 77% of these companies’ portfolios are NPLs, worth around €19.9 billion.

On the banking side, Cyprus is seeing historic lows in NPLs, with banks reporting just €1.65 billion in troubled loans as of July 2024. The ratio of NPLs to total loans has fallen to 7%.

There are media reports that Marios Tsiakis, the Secretary General of the Cyprus Chamber of Commerce and Industry (KEVE) will retire soon. His position has already been advertised.

There are media reports that the four major auditing firms in Cyprus are struggling to achieve their targets. PwC, Deloitte, KPMG, and EY have focused considerable attention on advisory services following the loss of Russian clients.

This development puts pressure on the leadership of the Big 4. PwC’s leadership seems particularly vulnerable, having recently come under scrutiny.

Of the four firms, Deloitte appears to be in a better position. It had already streamlined its operations earlier, and it is now in a more favorable position than the other three. 

The civil servants will receive a 1.5% salary increase from today, marking their first pay rise in 15 years.

The increase comes alongside revisions to allowances, overtime rates and cost of living adjustment (COLA).

According to a ministry circular, the basic salary increase, effective from October 1, will have a minimum annual increase of €331.28.

29/10/24

Philenews reported that in a matter of days, the President of the Republic and the Council of Ministers to make a decision on the official acceptance of the resignation of Andreas Pullikas from the presidency of the Cyprus Energy Regulatory Authority (CERA) and the appointment of a replacement. At the same time, however, the Government and the President personally are called upon to manage, albeit with a delay, an additional serious issue that arose in August at CERA and concerns an allegation by a manager at the Electricity Authority regarding the interventions of CERA’s vice president, Alkis Filippou, so as to promote the application of a specific company and connect to the electricity network.

The government’s new package of measures to combat rising costs of living will be ready next month, Finance Minister Makis Keravnos has announced.

Cyprus’ fiscal balance has made a remarkable recovery from recent shocks, with current fiscal surpluses exceeding pre-pandemic levels, according to rating agency Morningstar DBRS. The agency attributed this improvement to strong revenue growth, primarily driven by rising social security contributions and higher corporate tax revenues due to a broader tax base.

New residential property sales in Cyprus showed strong growth in the first nine months of 2024, with apartments dominating the market.

Data from the Department of Lands and Surveys revealed a 19.2% increase in overall residential sales compared to the same period last year.

Apartment sales surged by 27.7% while house sales declined by 9.2% to 918 units. The shift towards apartments is particularly pronounced among young buyers and families, driven by housing costs and financing constraints. Industry professionals warn that the combination of high demand, reduced supply and delays in new stock entering the market could trigger further price increases.

Eurozone households are increasingly placing deposits in banks outside their home countries with Cyprus, Greece and Slovenia experiencing more outward than inward deposits. Cyprus reported 9.5% outward and 4.5% inward deposit flows. The trend suggests progress towards banking union integration, with higher deposit rates and significant country differences likely contributing to the development, alongside digitisation and online banking offerings.

Media reported about concerns expressed at the House health committee about the purchase of a third private hospital by an investment fund as it could create an oligopoly in the provision of healthcare. It involves the purchase of 50 per cent of the share capital of the American Medical Centre by Hellenic Health Group, which had previously bought Apollonion and Aretaion. HHG owns several hospitals in Greece, but it belongs to CVC Capital Partners, which control hospitals all over Europe.

The Ministry of Transport has announced a budget of nearly 790 million euros for 2025, marking a 19% increase from 2024. The budget allocates 554 million euros for the ministry’s own projects, while 276 million euros will fund projects overseen by the ministry on behalf of other government departments. The budget includes major infrastructure roadwork & building projects.

MP of DISY Kyriakos Hatzigiannis expressed discontent to the government’s decision to transfer the Director General of the Ministry of Finance, Giorgos Pantelis, who will take up duties at the Ministry of Education. Hatzigiannis described the transfer as “unacceptable” and “unusual”, as he says, “it is connected to the demands of trade union, because he was an obstacle to the insatiable appetites at the expense of the state budget”. Politis reported that the views and practices of Giorgos Pantelis, in relation to the financial management of the state, were called into question many times after the election of President Christodoulides.

The two main hotel workers’ unions, OUXEKA-SEK and SYXKA-PEO, announced plans for imminent strike action after negotiations for a new collective agreement in the hotel industry reached an impasse. The unions jointly decided to reject the Labour Minister’s mediation proposal for renewing the collective agreement.

The Interior Ministry has declined to reveal the identities of individuals whose Cypriot passports have been revoked. The ministry disclosed only that 86 foreign nationals who had been naturalised as Cypriots have had their citizenship withdrawn, providing dates of the revocations spanning from September 2013 to August 2024. The refusal comes amid continued scrutiny of Cyprus’s former citizenship-by-investment scheme, which was terminated following allegations of abuse.

Philenews reported that it is not only the high costs of food items that that raises the financial pressure for households. Costs related to payment of professional handymen (plumbers, electricians, car maintenance etc.) have also risen substantially.

Cyprus is part of a group of countries that will cooperate with NASA for the return of humanity to the moon and then for the giant effort to send the first humans to Mars.

Deputy Minister of Research, Innovation and Digital Policy Nikodemos Damianou, in the presence of US Assistant Secretary of State James O’Brien, signed the Artemis Accords in Nicosia (established by NASA for the peaceful exploration and exploitation of space).

23/10/24

The Cypriot government and the Chinese CPP-Metron Consortium (CMC) have reached an agreement regarding the provision of a floating storage and re-gasification unit (FSRU) to the liquefied natural gas (LNG) terminal at Vasiliko, Energy Minister George Papanastasiou said.

Speaking to the House energy committee, he said the FSRU, named ‘Prometheus’ would now be delivered to Vasiliko within the next 60 days.

He said the agreement regarding the delivery of the FSRU was “financial”, and that as a result of the FSRU being delivered, the amount payable by CMC by way of guarantees had been reduced (media reported that one of the 2 guarantees of 35 million euros will be released as an

obligation). To this end, he clarified that the government had “not given any additional money” to CMC.

He added that “certain actions will have to be taken on both sides” for the FSRU to be delivered within the next 60 days, with these largely entailing the production of certifications to allow it to sail to Cyprus from Shanghai, where it is currently located.

The development ‘brings back to life’ a project which appeared to be stalling after CMC had in July terminated its contract with Natural Gas Infrastructure Company (Etyfa) to build the terminal.

The Minister of Energy Giorgos Papanastasiou stated, that the initial planning for the completion of the works on the jetty and the onshore infrastructure of the natural gas terminal in Vasiliko cannot be implemented by the subcontractors that had cooperated with the Chinese consortium (that departed from the project and is now seeking compensation) . ETYFA (the state natural gas infrastructure company) were consulted by its legal advisors that a bidding process must be followed and its under way. At the same time, ETYFA is considering offers for hiring a Project Manager, who will offer services to promote the completion of the project.

The Republic of Cyprus is expected to secure a new loan in 2025 to repay the first instalment of a €6.3 billion loan received from the European Stability Mechanism (ESM).

The ESM had provided €6.3 billion financial package for Cyprus, as part of its economic bailout programme.

Initially, the Republic was given €10 billion but chose not to draw on the remaining €2.7 billion as it deemed that this would not be needed.

The loan, disbursed in nine instalments between May 2013 and October 2015, will be repaid from 2025 to 2031, with an average repayment period of 15 years.

The International Monetary Fund has raised its forecast for Cyprus’ economic growth in 2024 from 2.7% to 3.3%.

The Cypriot Ministry of Finance is even more optimistic, predicting a growth rate of 3.7%.

The ongoing conflict in the Red Sea, marked by frequent Houthi rebel attacks, poses a grave threat to global shipping and international trade, according to the Cyprus Shipping Chamber.

In an interview, Thomas Kazakos, Director General of the chamber, highlighted the dire consequences these attacks have on maritime operations.

Kazakos called for stronger international cooperation and protective measures to safeguard seafarers and secure vital supply chains, underscoring the escalating costs and delays caused by these disruptions.

Kathimerini reported that in July, Cypriot authorities made contact with Delta Air Lines, with the aim of establishing a direct flight connection between Cyprus and the US. Efforts are ongoing, and not just with that airline. Targeting the American market requires coordinated actions that extend beyond the jurisdiction of a single ministry and involve many stakeholders.

One potential positive step in this direction could be Cyprus’ inclusion in the US Visa Waiver Program. 

22/10/24

Philenews reported that it seems an agreement has been reached for the delivery of the FSRU Prometheus.

Unofficial information states that in exchange for the delivery of Prometheus to ETYFA (the state natural gas infrastructure company), an amount of several tens of millions will be released in favour of the Chinese consortium from the total amount of 70 million estimated to be the guarantees deposited by them.

Other information indicates that the floating liquefied natural gas storage and regasification unit (FSRU) has been inspected in recent days by specialist technocrats with very satisfactory results.

The Energy Minister Giorgos Papanastasiou stated that the inspection shows that the ship is in an excellent condition.

Therefore, it is seaworthy, it has secured the necessary certifications (as an LNG Carrier) and now it must be considered a matter of time before it sails to Cyprus.

However, for the future operation of Prometheus as an FSRU (that is, for regasification) it will be necessary to carry out some additional conversions, with an estimated cost of approximately 10 million, which will be borne by ETYFA.

It is not known whether the improvement work on the ship will be done in Vassiliko or elsewhere in Cyprus or in a shipyard in a neighboring country.

Significant external and internal risks to the economy were highlighted by Finance Minister Makis Keravnos during the presentation of the state budget to the House finance committee.

Keravnos stressed the importance of maintaining a surplus in the fiscal balance, with the surplus projected to reach 2.7 per cent of GDP by 2025.

He also prioritised reducing public debt to 60 per cent of GDP by 2025, down from 68.9 per cent in 2024.

Other key priorities in the budget include the green transition, digital reforms and necessary structural adjustments.

The main risks include non-performing loans from previous years, and the significant deficits in the pension funds of semi-governmental organisations and local authorities.

Further concerns include potential compensation claims as well as potential EU fines for non-compliance with environmental directives.

Another significant risk relates to the developments at the Vasiliko gas terminal. Potential compensation claims that the Republic could face may amount to €529 million. The Minister noted following contacts made, there is no question of returning the (loan) money to the European Investment Bank and the European Bank for Reconstruction and Development, which amount to approximately 200 million euros.

Geopolitical risks from the regional crisis, increased shipping costs, and the financial impact of rising migrant flows are also a concern.

Challenges include climate change, natural disasters, compensation to farmers and the need to purchase water due to droughts.

Trade unions and other organized groups received assurances from the President of the Republic that measures will be taken to deal with the housing problem. Media reported that nothing specific was promised about new measures against high prices in the economy.

New home sales in Cyprus reached €1.9 billion during the first nine months of 2024, according to a report from Nicosia-based firm Landbank Analytics.

According to the report, this figure represents a 25 per cent increase compared to the same period in 2023.

Opposition Disy called for a “holistic” approach to tackling the problem of affordable housing, while for its part the government promised more programmes to help young people get on the property ladder.

The party leader outlined her party’s recommendations to alleviate the situation. One is to expedite the issuance of town planning and building permits by local government authorities.

21/10/24

VASILIKO NATURAL GAS PROJECT

The Minister of Energy stated that “we are moving in the direction of receiving the floating LNG regasification unit Prometheus, from the Cosco shipyard in Shanghai”. And soon he hopes there will be something to announce. Media reported that ETYFA and the Chinese company CPP have agreed on the parameters of the delivery. The finalization of the deal requires the notification and consent of the Court of Arbitration in London, which is expected to happen in the coming days. The Chines consortium has already been paid 190 million euros for the FSRU and another 10 million euros  are required for works to be done in Cyprus, so that the ship is capable of working for natural gas regasification. Should the negotiations lead to a formal agreement, ETYFA will have to decide whether to dock Prometheus in Cyprus, to carry out the works required for its operation as an FSRU, or whether to take it to a shipyard outside Cyprus for the necessary work. According to sources familiar with the discussions, the conversions to the FSRU will take 5 to 6 months.

An article in Kathimerini notes that four months after the Chinese consortium pulled out of the construction of the Vasilikos terminal, efforts to fill the gap are still getting started. ETYFA, a part of DEFA that owns the project, is looking for consultants with experience in unfinished energy projects. A key focus for the Cypriot government is the delivery of the floating storage and regasification unit (FSRU) & trying to negotiate a resolution to avoid a lengthy legal battle in London. It notes three potential scenarios regarding the natural gas project: 

Pessimistic Scenario: If negotiations with the Chinese consortium fail, ETYFA may need to rent a new floating unit. This would mean starting a new project from scratch, pushing the expected operational date for the terminal and the introduction of natural gas to after 2026.

Realistic Scenario: If the situation improves and the ‘Prometheus’ ship becomes operational, the Vasiliko terminal could be ready for use by 2025. The government would then focus on preparing for the generation of power through photovoltaic (PV) energy.

Total Failure Scenario: If all current efforts fail, the Ministry of Energy may turn to the private sector for new proposals to import natural gas. This would represent a significant shift in strategy and could lead to a completely new approach to introducing natural gas in Cyprus.

INTERCONNECTOR

The Minister of Energy reiterated that there are other options, apart from the Electricity Authority Networks and the Cyprus Hydrocarbons Company (CYC), for the participation of the Republic of Cyprus in the share capital of the Great Sea Interconnector. The possibility of the representative of the govt. in the share capital of GSI (with 100 million euros) being the Cyprus Transmission System Operator is still on the table (it was the initial preference of the state but stumbled on issues with European Commission). The possibility of getting some kind of derogation from the EU Directive (like Greece) will be looked into.

EMISSIONS

The Dhekelia power plant has been emitting pollutants at levels far exceeding legal limits, according to data released by the Department of Environment.

USURPATION OF GREEK CYPRIOT PROPERTIES IN THE OCCUPIED NORTH

Three pre-trial objections were submitted from the defense of Simon Aykut who is facing charges related to usurpation of Greek Cypriot properties in the occupied North. The two concern the court’s jurisdiction to judge the case (which the prosecution noted is an unacceptable position) while the third concerns the defendant’s right to personal freedom, the conditions of detention and the restriction of his rights. The court will take a decision on these objections on November 8 and the defendant will remain under detention/ in custody until then. Aykut is accused of having developed and sold €43 million worth of property on Greek Cypriot land in the north. Turkish Cypriot media reported that Turkish Cypriot leader Ersin Tatar claimed that Antonio Guterres requested amnesty for Simon Aykut during the recent meeting with President Christodoulides who “froze when he heard this”. The Presidential Palace denied this,

A German real estate agent who is also accused of usurping property in the occupied territories denied all charges. The Nicosia Criminal Court rejected all the pre-trial objections raised by the defense and a new hearing has been set for December 18, 2024. Until then she will remain in custody.

The arrests made in relation to the usurpation of Greek Cypriot properties and the inability of the “real estate commission” to function effectively have brought the construction sector in the occupied North to the point of collapse, according to Osman Amtza, president of the “Turkish Cypriot Construction Subcontractors Association”.

OTHER ECONOMIC NEWS

The Ministry of Transport will launch an informal public consultation process in November to gather opinions from potential investors on separate developments for Larnaca’s port and marina, Transport Minister Alexis Vafeades told Philenews.

These views, along with a study by experts expected to commence work by early 2025, will shape the future of the two state infrastructures following the collapse of an agreement with Kition Ocean Holdings last May.

The consultation process, although informal, is crucial in determining whether the verbal interest expressed by “many” Cypriot and foreign entrepreneurs in recent months is substantial, the minister added

In an interview Finance Minister Makis Keravnos stressed his unwavering commitment to the country’s economic stability.  Keravnos acknowledged that he faces daily pressures to relax fiscal discipline, with demands coming from all directions & affirmed that he won’t yield to populism. Keravnos also expressed caution regarding the costs associated with the electricity interconnection project, warning that rising expenses could impact the overall state budget.

Politis reported that expenditures earmarked for defense have recorded an increasing trend in recent years. In the state budget of 2025, the funds for the purchase of weapon systems amount to €180 million. It includes the purchase  of UAV’s, an anti-Drone system to intercept unmanned aircraft, a modern air defense system, an anti-tank missile system as well as six Airbus H145M light attack helicopters.

The govt. portal, the Cyprus Electricity Authority, the Telecommunications’ Authority, the Bank of Cyprus, the Larnaca Airport & EKO petroleum successfully repelled cyberattacks over the weekend. 

Philenews reported that Logo Jet ltd (company registered in Israel)  intends to acquire a stake in TUS Airways (49% belongs to Global Knafaim).

Media reported about the verbal confrontation between the government and left-wing opposition party Akel over the issue of affordable housing. A Eurostat survey showed that 11.2% per cent of people in Cyprus experienced housing difficulties in their lifetime while the EU average was 4.9%. Finance Minister Makis Keravnos stated that Cyprus does not face any housing problem but real estate experts note that with construction costs, rents and loan payments all on the rise, a growing number of people are finding it difficult to get on the housing ladder. Meanwhile, In terms of purchasing power, Cyprus ranks below the EU average while 23.2% of households in Cyprus reported difficulty in meeting their financial obligations. 7.4% of working Cypriots aged 18 and over were at risk of poverty, slightly below the EU average of 8.3%.

Cyprus recorded the highest number of lawyers per capita but one of the longest delays in resolving cases according to a new Council of Europe (CoE) report. Cyprus had 505 lawyers per 100,000 residents in 2022 while the average number across Europe was 180.

Philenews reported that the way is now open for the announced takeover of Papantoniou supermarkets by Greek operated Sklavenitis supermarkets after the green light from the Competition Protection Committee.

The contractor responsible for building the new motorway linking Paphos and Polis Chrysochous has requested an additional €32 million to complete phase one of the project by April 29, 2027 – three years later than the original deadline.

According to media, the contractor has so far completed 21 per cent of the project and had been already paid €16 million.

Initially, the project was set to be finished by November 26, 2024, with a total cost of €72 million plus VAT.

Philenews reported that the Tax Department has ramped up efforts to identify potential tax evasion by monitoring social media platforms for displays of extravagant lifestyles.

16/10/24

Nicosia said it has received no fresh proposal regarding the export to Cyprus of natural gas from Israeli offshore fields following media reports of a purported $1.5 billion deal on the cards. “We have no updated proposal, however if a specific and detailed government-to-government proposal does come from Israel it should include the sales price of natural gas at the connection point of conventional electricity producers,” Energy Minister George Papanastasiou said.

He stressed that completing the natural gas import terminal at Vasiliko remains “the fastest and most realistic proposal for importing natural gas”.

News reports in recent days claimed Cyprus and Israel were in talks for Cyprus importing natural gas via a pipeline, for a 10-year contract said to be worth the $1.5 billion. Meanwhile, a spokesperson for Israel’s energy ministry told S&P Global that the energy ministries of Israel and Cyprus are in talks “on issues of mutual interest and possible cooperation”. Politis reported that the government is primarily focused on resolving the complications surrounding the natural gas import terminal at Vasiliko.

The state-run company in charge of the liquefied natural gas (LNG) import terminal denied media claims that the jetty at Vasiliko is at risk due to corrosion and hinted that ulterior motives might be behind the reports. Philenews reported it had got hold of correspondence where Hill International  (previously tasked with monitoring the work of the contractors and sub-contractors until August 24) warns of structural integrity issues for the jetty caused by corrosion of the piles.

Philenews reported that, originally, the cost of the Vasiliko project was estimated at 289 million euros but the addition of 25 million euros (requested by the consortium due to increased costs), the total cost of the project rose to 314.5 million euros. In addition, the contract foresees a cost of 10 million euros per year for maintenance-operation of the FSRU Prometheus by a Norwegian company, for a period of 10 years, with the right to extend for another 10 years. Of this amount (314.5 million euros), the Republic of Cyprus paid approximately 239 million euros. Therefore, approximately another 75.5 million euros must be paid. However, no one guarantees that the financial balance for the state is this. In order to determine the final amount that the Cypriot taxpayer will be asked to pay, very difficult negotiations will be preceded by the state with the Chinese company, which is still holding the FSRU Prometheus in Shanghai, but also the decisions of the Arbitration Court in London.  CPP’s request at the court for approximately 136 million euros is pending, as well as its request for the deletion of the right to retain guarantees (by the state) totaling 70 million euros.

Trade unions representing workers at the Electricity Authority of Cyprus (EAC) dismissed outright the idea of the organisation relinquishing its ownership and control of the grid, arguing that any such action would cause “turmoil and chaos” in the energy sector.

In a joint statement, they rejected a proposal by Energy Minister George Papanastasiou to take the ownership and control of the electricity grid away from the EAC and giving it to a state-owned company. In turn, this state-owned corporation would invest, on behalf of Cyprus, the €100 million in the holding company that would manage the Great Sea Interconnector. 

The unions also complained that the EAC, despite its technocratic expertise, was never asked for its feedback on the Great Sea Interconnector.

With the title: Startup guru Tal Catran on boosting Cyprus’ startup scene and the one factor that will attract Israeli investors, Cyprus Business News hosted an interview with Tal Catran.

The interview notes that  being able to operate under pressure, making self-belief and self-motivation a key part of your approach, and choosing the right people to work with including mixing generations to benefit from all their strengths are just some of the keys to success suggested by Tal Catran. Israel is well-known for its own thriving startup scene and, the country’s recipe for success is something keynote speaker, government, municipality and business consultant Catran is often asked about.

Catran revealed what he considers to be some of this recipe’s most important ingredients, pointing out the route Cyprus could follow to strengthen its own expanding startup landscape.

Catran explained that in his expert opinion, Cyprus’ invitations to Israeli businesses and investors should be made on site, in Israel. “Don’t shout out from miles away ‘Come on over.’ You need to take us by the hand and bring us over,” he said.

Finance Minister Makis Keravnos, addressing the third annual event for Cyprus’ EU recovery and resilience plan,  said Cyprus had already applied for a fourth grant from the EU mechanism and was preparing to apply for a fifth. Grants since 2021 reached €500 million, which is about 50 per cent of the total grant for Cyprus. The application for a fifth grant will increase grants by the end of the year by €120 million.

A coalition of Turkish Cypriot organisations demanded the release of businesspeople arrested by the Republic of Cyprus on the charge of developing or promoting the development of Greek Cypriot properties in the occupied north. During a meeting between President Nikos Christodoulides, Turkish Cypriot leader Ersin Tatar and UN Secretary General Antonion Guterres in New York, among other things discussed, Tatar tried to convince Christodoulides to halt arrests of business  involved in the usurpation and resale of Greek Cypriot properties in the north. Political sources said this was a dead-end proposal which violates international law. Christodoulides reportedly replied that the executive power did not influence the judiciary in EU states.

The Water Development Department has announced plans to address water supply issues in Limassol and Paphos, officials told a parliamentary committee.

The strategy includes four new mobile desalination units nearing final design stages, as well as two permanent units for Limassol and Larnaca. 

A contract for a project worth €34 million has been signed between the government and a private consortium for the expansion of facilities at Pentakomo in Limassol that will increase the scope of aquaculture in the area.

The deal involves the creation of port and land facilities to serve aquaculture farmers.

It is being financed by the EU as part of the island’s recovery and resilience plan.

The Cyprus Consumers Association has revealed that consumers are paying between 97% and 342% more for fruits and vegetables compared to producer prices.

14/10/24

INTERCONNECTOR

Finance Minister Makis Keravnos has called for careful consideration of the country’s participation in the electrical interconnection project, citing significant financial implications. He noted the project’s estimated cost of €2 billion represents a substantial portion of Cyprus’s annual budget of approximately €10 billion and the country’s involvement in this investment is a very serious matter and must be studied very carefully.

He emphasised the need for thorough feasibility studies and economic assessments before a final decision is made on state participation.

Keravnos drew particular attention to the financing aspects of the project, noting that the implementing body, Great Sea Interconnector, may need to borrow over €1 billion.

“We must know in advance the terms of such a loan, the interest rate, and whether state guarantees for repayment will be required”. 

The Cyprus  Mail reported that the proposal of the Ministry of Energy presented to the Electricity Authority recently, is, in essence, an idea to nationalise the electricity authority’s (EAC) grid and its operation so it can turn into a full state-owned operation.

A subsidiary company will then be created which will invest €100 million as the state’s capital share towards the Great Sea Interconnector (GSI). 

And the EAC will basically become just an energy producer.

The Chairman of the Authority said they would assess the proposal and give an answer by the end of November, around the same time as the study by the European Investment Bank (EIB) on the feasibility of the GSI and financial recommendation for how to materialise the project.

“There is no profit to the EAC from this manoeuvre. The state needed to find a way to create a company to invest in the GSI cable, it cannot do so directly,” the Chairman said.

Meanwhile, the trade unions will stand in the way of any plans of the government regarding the involvement of the EAC in the Interconnector and the separation of the grid.  The unions believe that the government proposal is simply a pretext for its dismemberment and privatization of its networks. Media reported that in case that the EAC does not accept the proposal, the Cyprus Hydrocarbons Company (CYC), which is a state-owned company, could also be an option.

DRILLINGS

Cyprus’ first natural gas extraction will most likely be from the Kronos reservoir in block 6, which may be in 2027, Energy Minister George Papanastasiou said in an interview. He also said that in early 2025, ExxonMobil will begin drilling an exploratory well in the Electra site in Block 5 and a well in the Glaucus site in block 10. As for Aphrodite, he said Chevron has submitted a preliminary development plan, which seems to be in the intended direction. “The aim is to complete the plan within four months and there should be no surprises down the road.”

VASILIKO PROJECT

The Minister of Energy said that for the arrival of natural gas and completion of the terminal at Vasiliko, the state natural gas infrastructure company (Etyfa) was “cautiously proceeding” with the appointment of a project manager to assist in the securing of offers to narrow down the company to complete the remaining jetty and land works at the LNG terminal site.

Regarding the regassification unit (Frsu) Prometheus, where there are disagreements with the Chinese consortium CPP Metron, the minister said “intense negotiations” were underway and the securing of the vessel, which is legally the property of the Republic, was in its “final” stage.

OTHER ECONOMIC NEWS

Philenews reported of a new Israeli investment of tens of millions in Cyprus by Fattal. It concerns the acquisition of Elias Latsi Holiday Village Resort, which will soon be completely renovated and renamed Leonardo Club Family Resort.

The new project is expected to offer a new experience in Paphos, with state-of-the-art facilities and many activities for families and children, including a water park. Based on the plans, the estimated cost amounts to €55 million, while with the issuance of the necessary permits, the project will be completed within 1.5 years.

Measures aimed at tackling the high cost of living will return, Finance Minister Makis Keravnos announced , as zero VAT will be implemented on a number of products.

There will be zero VAT on diapers for infants and adults, baby milk, female hygiene products, fruit and vegetables. Opposition parties accused the government of incompetence. Both left-wing Akel and right-wing Disy accused the government of lacking a coherent plan and being out of touch with the realities faced by Cypriots.

The French Supreme Court has upheld an international arbitration decision in favour of the Republic of Cyprus, rejecting a $1.4 billion compensation claim against the country. The case stemmed from actions taken by the Central Bank of Cyprus to place FBME Bank under resolution after the U.S. Department of the Treasury classified FBME as a financial institution of “primary money laundering concern”.

Philenews reported that the area east of occupied Kyrenia has become unrecognizable due to illegal developments and the worst thing of all is that no one can stop this situation. Through the cases of usurpation of Greek Cypriot land in the occupied territories that the Police has recently been investigating, it appears that the areas of occupied Agios Ambrosios, Kalogrea, Akanthou as well as Trikomo are at the center of huge developments where hotels, marinas and countless residences have been built. 

Politis reported that for approximately a year now, there has been a change in the attitude of the government and the prosecuting authorities of the Republic as regards the usurpation of Greek Cypriot properties in the occupied North. A 4th case has been brought to court while five persons from Israel, Germany and Hungary facing charges. The cases of a woman from Germany and 2 women from Hungary even have a common denominator which is the Kayim construction group, closely linked to Turkish Cypriot leader Ersin Tatar.

According to the general director of the Cyprus Hotel Association (Pasyxe) Philokypros Roussounides, despite the ongoing conflict in the region, hotel bookings have not shown a significant downturn. 

However, he expressed caution regarding the future, pointing out that the broader Mediterranean area could experience impacts next year due to the conflict.

Philenews reported that Cyprus has seen a significant reduction in its trade deficit. Figures for the January-August period show a marked decrease in imports and a noticeable decline in exports. The main reason is that most probably, high prices have led to decreased demand, consequently lowering inflation but also reducing imports (and the trade deficit).

Total imports of goods from January to August 2024 amounted to €7.5 billion, a 15.5% from the corresponding period of 2023.

Total exports of goods for January-August 2024 reached €2.6 billion, marking a 9.0% decline.

Cyprus has seen significant economic growth across various sectors in the first half of 2024, according to the latest “Monthly Economic Developments” report from the Statistical Service.

Manufacturing production rose by 3.7% between January and July 2024 compared to the same period in 2023. The construction sector showed robust growth, with the total area covered by approved building permits seeing a 46.5% increase year-on-year. Vehicle registrations rose by 16%.

The government unveiled its strategy for the agricultural sector aimed at sustainable development, innovation and economic resilience. It aims to increase the contribution of the agricultural sector to Cyprus’ GDP, which currently stands at 1.8 per cent.

The new strategy was presented by Agriculture Minister Maria Panayiotou. It includes a number of actions such as addressing marketing gaps in promoting produce, water management interventions and the adoption of smart farming technologies. etc. with a budget of €109.3 million for the period 2024 to 2028.

Meanwhile, the Director of the Water Development Dept. stated that they have been working to draw up an action plan to deal with the water shortage that will be submitted to the cabinet for approval very soon.

It includes immediate actions which include the provision of mobile desalination units to the Paphos and Limassol district and an expansion of the existing desalination units’ capacity. The possibility of “artificial rain” being created by cloud seeding is also something being discussed.

Philenews reported that despite rising rental costs in Cyprus, the country’s increase from 2010 to the second quarter of 2024 is among the lowest in the European Union (EU) and the Eurozone.

According to Eurostat, Cyprus experienced a rental price increase of 9.02% during this period, significantly lower than the EU-27 average of 24.83% and the Eurozone-20 average of 22.95%.

The cost of residences in Cyprus has also increased, though not as dramatically as in some other countries.

09/10/24

Philenews reported that a proposal that, if implemented, will bring huge changes to the Electricity Authority was presented by the Minister of Energy to the administration and senior management of the organization.

The idea is for the possibility of the regulated (monopoly) activity of the Networks (currently belonging to the EAC) to turn into a 100% state company that will create a subsidiary company, which will invest, on behalf of the Republic, 100 million in the share capital of the Great Sea Interconnector.  For the Government, the EAC is the most suitable organization to manage the participation (under consideration) in the 2 billion project and wants to avoid mistakes like the contract for the natural gas terminal in Vasiliko.

The proposal caused numbness in the EAC leadership while the reaction in the ranks of the unions is particularly cautious.

A worry is the possibility of exposing national infrastructures to the business risk of a mega-project, with many technical, financial and geopolitical challenges. Another worry is the possibility of reopening the discussion of private investors entering the Networks, something that was ruled out in 2017. From the government’s point of view, the risk to the national electricity grid from any investment risk is not valid, since the investment will be made by a subsidiary company of the Networks. It also assures that there is no intention to alienate the national wealth of Networks from full state ownership. The original idea that either the Cyprus Transmission System Operator (TSO), after becoming independent from the Electricity Market Operator, or EAC Networks, without alienating them from the parent organization, would invest in GSI was deemed unfeasible, due to incompatibility with the EU acquis and the Directives concerning competition in the electricity market.

For this reason, the independence of the Networks, without alienating them from the state, was considered an appropriate option, if this will be the final decision of the Government.

The option of the participation of the Republic of Cyprus in the Great Sea Interconnector through the Cyprus Hydrocarbons Company (ΕΙΚ) has also been discussed. Although this option has not been definitively abandoned, the need to seriously strengthen the company (100% state-owned) with technocrats specialized in electricity, networks and transport management is problematic.

Chevron has suspended work on a subsea pipeline for the third phase expansion of the Leviathan gas field due to the ongoing conflict in the region, project partner NewMed Energy announced.

The suspension, expected to last until at least April 2025, will delay the project’s completion by a minimum of six months, NewMed Energy told the Tel Aviv Stock Exchange.

NewMed Energy, which holds a 45.34% stake in Leviathan, stated that while the delay would not significantly impact the project’s overall discounted cash flow, it “is expected to have a material negative cumulative effect on the expected cash flows in 2025”.

Chevron is the project operator with a 39.66% stake and the expansion delay is likely to reduce Israel’s gas available for export.

Last year, 75% of Israel’s exported natural gas went to Egypt, with the remainder going to Jordan.

Kathimerini reported that in the last eight months, Cyprus has acquired an extraordinary glamor for investors of the region, who are moving at a fast pace either by expanding their businesses in the country or by creating a plan b to transfer their companies due to the situation in the Middle East. Cyprus is attracting more and more Israeli investors, who seek to expand their businesses but also to scout the ground for new multi-million investments in various sectors. At the same time, the disorderly situation in the Middle East has created investment activity in the last quarter also from Lebanese, who have already invested in Larnaca that is popular for them and are leaving behind Limassol. Large multinationals with Israeli interests are seeking to create a temporary base until the situation in the Middle East stabilizes, as they know that Cyprus provides high-quality services and, above all, is a safe investment destination, according to the relevant authorities involved with attracting investments . Additionally, there are examples of companies creating a plan b, with the aim of having a base here in the event that the situation reaches a point where they cannot carry out their operations. There are also cases, however, where Israeli businessmen no longer wish to have any business activity and presence in their country, with Cyprus being their number one choice for transferring their operations. The fields of activity include fintech, regtech, gametech, edtech, shiptech, etc. There are also examples of companies involved with construction, industry, hospitality, health, fund management but also with cyber security and artificial intelligence (AI).

An example is Fattal of Israel that has created a network of hotels throughout Cyprus. In particular, Fattal’s investments in Cyprus prove the vote of confidence in the island as it currently has a total of 10 hotels.

Another example is Global Knafaim, which deals with the purchase and leasing of aircraft and owns 33.33% of the Cypriot airline TUS Airways.

Israelis are also targeting additional investments of millions in the hotel industry.

Lebanese are also showing interest with 35 companies expressing specific interest in recent months. These companies are active mainly in the construction sector but also in the pharmaceutical industry. A typical example is the Franco-Lebanese investment management company Murex, which maintains a presence in Cyprus from 2021 with 200 employees and is set to reach 500 by the end of the year. A new hospital is also being planned in Limassol by Hôtel-Dieu hospital, of Lebanese and French interests, which is expected to be ready around the end of 2025. It is one of the leading hospitals in Lebanon with a presence in Beirut and Paris.

With the aim of hearing the voice of Israeli investors, Invest Cyprus organized a meeting with the 10 largest companies of Israeli interests active in Cyprus. The entrepreneurs confirmed their desire to continue doing business in Cyprus as they feel safe, in a protected framework that offers business facilities. The Israeli investors also brought up issues that concern them, with the competent Ministry assuring them that it is going to take them seriously. Routine banking are a brake to business growth as was noted by the Israelis. They are also troubled by issues related to the bureaucracy but also social issues related to living here (schools, public transportation, etc.).

The Cyprus Mail reported that DND Homes (based in Boston) and its subsidiary DND Cyprus, based in Famagusta, currently advertising 622 luxury homes in the north, are being investigated for the usurpation of Greek Cypriot properties.

Disy MP Nikos Georgiou sent a letter to Foreign Minister Constantinos Kombos seeking answers, however Kombos replied in confidentiality and the letter was not made public.

Behind DND Homes and DND Cyprus is Turkish Cypriot businessman Ozan Dökmecioğlu, who is closely linked to the north’s leadership.

The authorities are also gathering information to make a case in court and arrest warrants may be issued in the near future against Dökmecioğlu and senior staff of his company.

DND Homes is included in a list of 24 usurpers of Greek Cypriot properties made public by the Cyprus Greens in August.

Nicosia criminal court rejected pre-trial objections put forth by a German national held in connection with usurping Greek Cypriot property in the north.

Her defence lawyer had argued she would not receive a fair trial due to bias.

Another point put forth by the defence lawyer concerned the charge sheet, as well as conflicts the lawyer said exist between national law and the European Convention of Human Rights.

Prosecution asked for time to examine the objections, and the hearing will resume on October 17 at 10am.

Philenews reported that hotels in Larnaca are experiencing unusually high occupancy rates due to an influx of visitors fleeing the escalating conflict between Israel and Lebanon.

Marios Polyviou, president of the Larnaca Hoteliers Association (PASYXE) said that “there’s high demand correlating with flights from Lebanon. It’s mainly Lebanese citizens and third-country nationals“.

Many visitors are using Cyprus as a temporary haven or transit point.

Hotel occupancy has also increased due to the presence of international delegations preparing for potential mass evacuations from the region

The betting industry now accounts for 3.72% of Cyprus’ GDP, according to Permanent Secretary of the Ministry of Finance George Pantelis.

08/10/24

INBNews reported that a new hotel with a capacity of 480 beds, named Leonardo Club Latsi, is being planned in Paphos by the Fattal Hotel Group while it is also opening another NYX hotel in Nicosia.

Philenews reported that in a letter to the Minister of Energy, which was communicated also to the Parliamentary Energy Committee, lawyer Ionas Nicolaou (former Minister of Justice and former Member of Parliament) has submitted a proposal for the installation of 800 megawatt hours of electricity storage systems from private photovoltaic parks, that could be offered a grant from the state, at specific rates.

The proposal is submitted on behalf of a significant number of companies that are active in the utilization of solar energy for electricity production and cooperate with his law office. According to the letter, the total cost of his customers’ storage systems is estimated at 135,616,000 euros and the sponsorship (if their proposal to cover approximately 45% of the eligible costs is accepted) will amount to 60 million euros. In his letter he also criticizes the Electricity Authority’s announcement to install a storage system at the Dhekelia station.

Politis reported that the list of usurpers of Greek Cypriot properties includes an American company (DND HOMES) and its subsidiary, based in occupied Famagusta. It promises on its website to bring the quality of America to (occupied) Cyprus. DND HOMES is active, beyond the occupied territories which it calls the “Turkish Republic of Northern Cyprus”, in Boston. The Authorities are aware for some time about its activities.

Philenews reported that left-wing opposition AKEL party has encountered renewed resistance to its proposed taxation of banks’ excess profits stemming from increased interest rates.

The proposal was rebuffed by the executive branch, the Central Bank and the Association of Banks during a parliamentary finance committee meeting.

The bill, suggests imposing a 5% extraordinary solidarity levy on banks, with proceeds earmarked for a Social Solidarity and Borrower Support Fund.

The Director General of the Ministry of Finance, expressed reservations about the bill, warning it could undermine the country’s credibility and deter investors.

A Law Office representative identified constitutional issues with the bill, arguing that levy imposition and fund operation should be managed by the executive branch.

A representative of the Association of Banks stated that banks have paid €400 million in special taxes over the past four years.

07/10/24

Cyprus’s economic outlook remains positive despite a climate of significant uncertainty, Finance Minister Makis Keravnos stated on the 02/10/24 after submitting the state budget for 2025 to House Speaker Annita Dimitriou.

The 2025 budget, totalling €10.2 billion, projects a surplus of 3.3% and a primary surplus of 4.8%.

Keravnos noted that public debt is expected to decrease to 64.2% in 2025 and further to 58.1% in 2026, with the aim of reducing it below 60%.

All expenditures, including developmental, capital, transfers, and social benefits, have increased.

Two Hungarian women were arrested last week on suspicion of involvement in the usurpation of land belonging to Greek Cypriots in the occupied areas.

Large technology companies operating in Cyprus have pointed out that prices of office space in Cyprus and especially in Limassol are in some cases higher than in London and Amsterdam, with this issue being presented as one of the obstacles to the further growth of the IT & ICT sectors, which have seen rapid growth in recent years.

An op-ed by ex-President of DISY Averof Neophytou concludes that the long period of economic insecurity society is experiencing requires bold political initiatives that should be centered on a bold tax reform. Only in this way will the middle class be able to raise its head, respond to the difficulties created by high prices and face the future with optimism and creativity. As long as the middle class cannot “breathe”, the future of the country will remain uncertain. (My note: his numerous political interventions might be an indication of preparation for the next Presidential election).

An op-ed by Leslie G Manison (former senior economist at the International Monetary Fund, an ex-advisor in the Cyprus finance ministry and a former senior advisor at the Central Bank of Cyprus) concludes that with the government focused primarily on GDP growth and on budgetary surpluses in assessing the performance of the economy and in its policy decisions, while giving minute consideration to the deteriorating well-being of many of its citizens.