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    ECONOMIC NEWS 6.2024


    Philenews reported that Simon Mistriel Aykoot, who was arrested on June 7th on suspicion of usurping Greek Cypriot property in the occupied territories, is facing a total of 124 charges.

    The court will decide today if he will remain in custody.

    Police investigators have secured evidence from the Israeli authorities, following a request for assistance.

    Philenews reported that according to Greek energypress.gr, Greek electricity experts believe that the Cypriot Government fears the possibility that electricity consumers in Cyprus will eventually be charged with 80% or more of the cost of the construction of the electricity cable connecting Cyprus-Crete. According to the publication, if the Cypriot Government insists on “putting” 100 million euros into the project in the form of its participation in the share capital (instead of sponsorship), then the regulatory decision on cross-border cost sharing between consumers in Cyprus and Greece must be changed i.e. 80%-20% at the expense of Cypriot consumers, from 63%-37% that is now the case. This is due to the fact that this percentage was decided when the electrical interconnection of Cyprus included the electrical interconnection of Crete – Attica but now things have changed as the Crete-Attica interconnection is already close to the implementation phase.

    Philenews notes that the current position of the Cypriot Government is that it is not pushing for an amendment of 63% – 37%. Also, it does not want to “donate” to ADMIE and the interconnection the 100 million euros that will be borrowed from the European Recovery Fund in the form of sponsorship. Tt will not provide “free” money, but will give money to get a substantial stake in the Great Sea Interconnector, so as to have a role and a say in the big project. But there is an investment risk (although experts believe it’s not big) and this is of great concern to the Cypriot Ministry of Finance.

    The government extended its anti-inflation package for four months, aiming to ease the burden of rising prices on households and businesses.

    The extended measures include a tiered subsidy on electricity consumption charges for households, businesses, and industrial consumers (until October 2024 at a cost of €12 million) and a zero VAT rate on basic goods (until September 30, 2024, at a cost of €11 million).

    Media reported that the benefit for households is estimated at just 22 euros every two months.

    The Republic of Cyprus has drawn offers totalling €6.7 billion from international markets for its newly issued 7-year bond, according to a report released on Wednesday by the Cyprus News Agency (CNA).

    issuance has been oversubscribed nearly seven times.

    Cyprus is in advanced talks to acquire Sherpa armoured vehicles from French firm Arquus and equip them with anti-tank missiles, according to La Tribune newspaper.

    A memorandum of understanding (MoU) with French manufacturers is expected soon, La Tribune reported.

    Cyprus is a major consumer of French military equipment, acquiring nearly €310 million worth of systems between 2013-2022.

    Cyprus has seen a slight improvement in IMD’s world competitiveness rankings, moving from 45th to 43rd place among 67 evaluated countries. Cyprus’ improvement this year is mainly attributed to a significant enhancement in economic performance, primarily due to increased flows of foreign direct investment (FDI) into the country.


    INBNews with the title: “Internationally renowned Tal Catran reveals his secrets at Digital Cyprus” reported that the participation of international cybersecurity expert Tal Catran at the Digital Cyprus event on the 20/06/24 promises to provide important insights and perspectives on the world of cybersecurity. Catran will highlight the modern challenges facing businesses in the digital world and offer valuable advice to protect them from ever-increasing threats.

    It notes that Tal Catran is a leading expert with extensive experience in cybersecurity education and the development of national cyber academies & his presence at the conference is a unique opportunity for attendees to learn from one of the top leaders in cybersecurity.

    Media reported that according to ADMIE, Important steps in the implementation of the Greece-Cyprus-Israel electrical interconnection, are underway.

    In the field of construction, Nexans received the “green” light from the EU Commission for the Granting of Licensing of Marine Research in order to start the seabed surveys. The ship will immediately start mapping the seabed in order to choose the optimal route for the submarine cable that will connect Cyprus to Crete. In the field of financing, it is discussing with the State Fund of the United States (DFC) & financing from Greek commercial banks as well. It is continuing the rounds of contacts with other interested investors, including the Bank of Cyprus. The regulatory framework for the participation of the state fund of Abu Dhabi (TAQA) is also being discussed. 


    The Cyprus Electricity Market Association (comprised of electricity producers & belonging to the Employers’ Federation) has expressed concern for the  Great Sea Interconnector project, noting there is a risk for Cyprus losing its energy sovereignty and characterizing ADIME’s design requirements for the electrical interconnection as disastrous. 

    Philenews reported that the Permanent Secretary of the Ministry of Finance confirmed through an interview that the ministry maintains some reservations regarding the electrical interconnection between Cyprus and Crete.

    He clarified, however, that these reservations do not directly concern the interconnection, but mainly the participation of the Republic of Cyprus in the share capital of the company as well as the additional costs, beyond 100 million euros, that may be required then the state to pay due to its participation in the project. He added, that the Ministry of Finance also has reservations regarding the technical part of the whole project, a technical analysis of which has not been delivered yet.

    It is also waiting for the final cost/benefit study carried out and presented by ADMIE (it showed the possibility of reducing electricity costs by 30%) that will be evaluated by an international consulting firm.

    “Any decision taken should ensure the interests of the Republic, Cypriot consumers (individuals and businesses), as well as domestic electricity production.”

    Philenews notes that this last point, to safeguard the interests of domestic electricity production, obviously refers to the serious concerns expressed by actors in the energy sector in Cyprus about the possibility that the operation of the cable (after 2030) will lead to inactivity or under-operation of current private investments in RES, but also the conventional units of the Electricity Authority and private producers, for which it is possible that Cypriot consumers will be asked to pay for their maintenance so as to have energy availability (in reserve), in uneconomic/unviable conditions.

    The amount invested in Cyprus’ green transition is estimated to reach €3.1 billion by 2030, according to the Finance Ministry.

    They said the investment would be sourced from state funds, European Union funds, and private investment, and will go towards helping the country achieve the “high aims” set by the EU regarding climate change.

    The President of Republic, Nikos Christodoulides, participated in the International Conference for Peace in Ukraine where he referred to the readiness of the Republic of Cyprus to provide through its fleet the necessary assistance to reinforce efforts to ensure uninterrupted transport of Ukrainian grain.

    Cyprus welcomed an upgrade to the economy by ratings agency Standard & Poor’s, who updated long-term ratings to ‘BBB+’ from ‘BBB’.

    President Nikos Christodoulides said: “It is the 5th in a row since taking over the governance of the country, and this time concerns Standard and Poor’s, which confirms the positive outlooks of the Cypriot economy.” The credit rating agency said that Cyprus posted the highest consolidated fiscal surplus in the eurozone last year and by 2027 the government debt stock will fall below 60% of GDP, in line with solid growth and fiscal prospects and our expectation that the government will largely meet its budgetary surplus targets.

    The Permanent Secretary of the Ministry of Finance said in an interview that Cyprus will seek to receive technical assistance from the EU Commission for the rationalization of the state payroll, which has seen an increase in recent years.

    Deputy Minister of Tourism Kostas Koumis confirmed that there have been no flight cancellations to Cyprus due to the recent fires that ravaged parts of the island, which coincided with a searing heatwave.

    According to Turkish Cypriot media, foreign nationals (including pensioners) who had bought properties in the occupied territories and resided for years there, are now leaving due to the situation created by the changes to the “residence permit”.


    Simon Mistriel Aykut, the director of Afik Group, a property developer in the occupied north, will remain in custody for an additional six days, as decided by the Nicosia District Court.

    He faces charges related to a €1 billion development project in Trikomo on Greek Cypriot property.

    Two other individuals are still wanted in the case: Aykut’s sons, 51-year-old Afik Yaacov and 49-year-old Michael Mistriel Aykut.

    All three are suspected of five offences: conspiring to commit a felony, conspiring to commit a misdemeanour, fraudulent transactions in real estate property owned by another, unlawful possession, possession and use of land registered to another, and conspiring to commit embezzlement.

    Philenews reported that Simon Mistriel Aykut is building settler housing in the Israeli-held West Bank and the Golan Heights. 

    The sides involved in the construction of the delayed liquified natural gas (LNG) import terminal at Vasiliko (Chinese CPP & the Natural Gas Infrastructure Company ETYFA) are open to exploring alternative agreements beyond the scope of the current contract, Energy Minister Geroge Papanastasiou said.

    “On the one hand, there is a contract that we insist should be honoured by the contracting parties and, on the other hand, there is a willingness of the two parties to reach a different agreement, but this will depend very much on the two parties.”

    He explained that the different agreement will see the completion horizon of the terminal, “not necessarily in the context of the specific relationship that comes from the contract, possibly beyond the contract”. This suggests a potential extention of the terminal’s completion timeline.

    Regarding the floating unit, Papanastasiou said it is “completed”, adding that there are ongoing consultations for certification.

    The statements were made after the House energy committee’s closed-door session that primarily focused on the progress of the LNG import terminal and the Great Sea Interconnector project.

    Committee chairman Kyriakos Hadjiyiannis stressed the importance of confidentiality, warning that even a minimal leak could have significant legal implications against the public interest.

    A Cypriot (Bulat Akhatovich Yanborisov, a Russian who also holds Cyprus citizenship) and two companies registered in Cyprus have been included in the latest list of sanctions imposed by the US against Russia.

    Central Bank of Cyprus governor Christodoulos Patsalides has opposed the imposition of a windfall tax on banks, emphasising that such a tax would harm the economy by disrupting the necessary fiscal predictability needed to attract foreign investors to a small, open economy like Cyprus. He highlighted the need for changes in the governance of the CBC, stating that this institution must undergo a transformation. Addressing the state of the Cypriot economy he made note of its robust growth while regarding interest rates, the gap between lending and deposit rates is moving in the right direction, but at a slow pace.

    The European Commission launched the ‘eunite: SME’ project designed to support private sector development in the Turkish Cypriot community and boost Green Line trade. With a budget of €4 million over the next two years, the project aims to strengthen the competitiveness of Turkish Cypriot businesses by supporting their digitalisation, sustainability and compliance with EU standards.

    Philenews reported that the zero VAT measure on basic food items expires in June and there is discussion on extending it.

    Eurobank purchased an additional 503,934 shares in Hellenic Bank at a total cost of €1.29 million, increasing its stake to 55.42 per cent.

    The bills that citizens will receive in the upcoming period concerning various fees are expected to be inflated, and this is not a consequence of the local government reform, the President of the Union of Cyprus Municipalities, Andreas Vyras said.

    He explained that the rise in the cost of living allowance (COLA), fuel and material costs have financially stretched municipalities. 

    The Audit Office slammed the forestry department for its failure to obtain a sufficient number of firefighting aircraft, which has left Cyprus exposed during its most high-risk fire season. Its announcement came after a big fire in Pafos. 

    Cyprus has a specific plan for the procurement of private aerial firefighting means to upgrade and ensure self-reliance, Agriculture Minister Maria Panayiotou said. 

    Philenews reported that a new situation is being created for the planned Science Technology Park in Pentakomos, following a recent decision by the Supreme Constitutional Court, opening the way again to find a strategic investor. The Court overturned the decision which had annulled the partial revocation of expropriation of private land for the purpose of creating the Park, due to the state’s financial difficulties.

    The demand for loans in Cyprus saw a further decline in the first quarter of 2024, with banks attributing this decrease to high interest rates.


    back scene column in Politis entitled: “Kition was an April Fool’s lie” notes that unfortunately, Kition Ocean Holdings and the project of the integrated development of the port-marina of Larnaca turned out to be a lie and wonders if the date of official acceptance of the project by Kition (1/4/22) was a coincidence.

    Media reported that Israeli property developer Simon Mistriel Aykut was arrested while attempting to cross from the occupied north to the Republic.

    Aykut is the founder of the Afik Group, which has carried out various construction projects in Trikomo, many of which are believed to have been carried out on Greek Cypriot land. The Afik Group was in the media a year ago when it was reported that a law firm co-founded by then Cyprus Bar Association chairman Christos Clerides was representing Afik Group chief executive officer Afik Yaacov.

    Crown Iris sailed into Larnaca from Haifa on Friday, in the first of an estimated 22 trips till November 2024, up compared to 2023.

    The cruise ship, with 1,600 passengers, was welcomed by Larnaca’s municipality, tourist development agency and chamber of commerce and industry.

    The chamber thanked Mano Cruises for choosing Larnaca as a port of call.

    This is the first large cruise ship to arrive at the port of Larnaca, after the Ports Authority took over its management, following the termination of the contract with Kition Ocean Holdings.

    The upgrading of Cyprus’ long-term rating by agency Fitch from BBB to BBB+ is “a vote of confidence in the government”, President Nikos Christodoulides said.

    Fitch noted that the update reflects reduced vulnerabilities to financial shocks, resilience to external shocks, and favourable medium-term trends. It is also supported by a strong commitment to fiscal prudence (expected primary surplus of 4.5%, the highest in the eurozone) and a reduction of the non-performing loan ratio to 7.9 per cent. The public debt is expected to fall to 70.6 per cent of GDP.

    Cyprus’s inflation rate accelerated in May, reaching a six-month high of 2.7%, driven by rising fuel, electricity, agricultural goods and service costs.

    Prices for fresh produce defied government efforts to curb inflation, with vegetables and fruits rising 21.53% and 16.82% respectively in May compared to April.

    The increases came despite a zero Value Added Tax (VAT) rate imposed by the Ministry of Finance to shield these categories until June 30.

    Philenews reported about general satisfaction prevailing among retailers as regards market

    despite difficulty of consumers in terms of their purchasing power.

    Two major issues seem to concern retailers. The reduced VAT rate on some basic products, for which they are requesting an extension, and the matter of staff, where great needs are observed.

    The number of building permits issued in Cyprus increased by 3.3 per cent year-on-year for the period of January to March 2024.

    The government is to buy ten private aircraft with the aim of expanding its firefighting capacity, Agriculture Minister Maria Panayiotou said.

    The deputy tourism ministry has introduced the ‘Historic Hotels of Cyprus’ label to showcase and preserve the historical heritage of the country. This initiative aims to enhance the image of Cyprus as a tourist destination and further promote and enrich its tourism product.


    The president of the Cyprus Scientific & Technical Chamber recommends to the State caution and requests a careful evaluation of the final study for the Great Sea Interconnector (and the assumptions made), with the help and experts who will be chosen by the State.

    Unusually high temperatures have pushed electricity demand in Cyprus to peak levels, testing the limits of the power grid, the Cyprus Transmission System Operator (DTSO) said.

    Peak demand on Wednesday reached 1,017 megawatts (MW) at around 5:00 PM, with conventional generation capacity peaking at 900 MW (available capacity is 942MW due to maintenance at some units) during the evening hours (6:00 PM – 9:30 PM).

    While solar photovoltaic (PV) panels contribute significantly to the grid during daylight hours, there is no capacity to store this energy for use later in the day.

    Peak PV contribution was around 480 MW at 1:00 PM, dropping to 60 MW by evening peak hours.

    Finance Minister Makis Keravnos has criticised the banks for their policy of maximum lending rates and extremely low deposit rates.

    “Banks must retake the role of financiers of Cypriot businesses so we can go ahead with everything we have planned; they must make a comparison with what is happening generally in the European banking system, because they cannot continue operating along today’s lines.”

    An op-ed in the Cyprus Mail notes that banks would rather deposit its available funds with the ECB and collect 4 or 3.75 per cent interest rate, with zero risk involved, than lend to a business, at a higher rate but with significantly higher risk.

    The lack of competition does not help businesses either.

    A tender for the leasing of two firefighting helicopters has been scrapped, after none of the bidders met the standards, media reported. four firefighting planes leased by the government from a Spanish company are expected to be back to Cyprus within the month.

    Chief Scientist Demetris Skourides recently attended a ceremony at NASA headquarters in Washington DC in order to witness the Cypriot team “Brute Force” receiving the highest accolade at the esteemed NASA Space Apps Challenge.


    The Cyprus chamber of commerce and industry made a fresh call for domestic suppliers to provide products to be sent to Gaza via Cyprus’ Amalthea humanitarian aid corridor.

    In relation to the technical, financial and other aspects of the Cyprus-Greece-Israel electrical interconnection, the President and CEO of ADMIE, Manoussos Manousakis, presented the cost/benefit study to the Cyprus Chamber of Commerce & Industry and the Employers’ Federation.

    The Federation considers it vital that the final cost-benefit study be evaluated by an independent consultants as well as by state authorities.

    Politis reported that the Cypriot government gave ADMIE two weeks to officially submit the cost-benefit study, which will determine the contribution of the Republic of Cyprus with 100 million euros to the project.

    The use of energy by EU households in 2022 dropped to its lowest amount since 2016, also significantly dropping compared to 2021, while energy use in Cyprus returned to its 2019 levels.

    President of the Larnaca Hoteliers Association Marios Polyviou reported a slight decrease in tourist bookings in Larnaca compared to last year, noting that arrivals to the island are being affected by a range of world events, including the UK general election.

    Addressing the ongoing war in Ukraine, Polyviou said that “this conflict has essentially halted the flow of tourist arrivals, particularly from Russia, which about three years ago was one of Cyprus’ main markets”.

    Polyviou also mentioned that “the new factor in this year’s tourism season is the impact on the Israeli market, which last year had tremendous momentum and resulted in a significant increase in arrivals to Larnaca, making it perhaps the city’s main market”.

    “We hope that a solution to the conflict will be found, ending the daily events in our neighbouring country,” the association president stated.

    Asked whether he is optimistic about the remainder of the tourist season in Larnaca, Polyviou said that there are clear challenges on the horizon, such as the aforementioned war in Israel.

    “The prolonged economic recession in Europe and the UK, issues in air travel, which have resulted in a reduction in available seats, and rising airfares all seem to be affecting the flow of arrivals,” Polyviou added.

    INBnews reported that within the next few weeks, if not days, the official announcements about a big deal in the retail sector in Cyprus are expected.

    According to sources cited by the Greek website Euro2day.gr, the negotiations between Sklavenitis Group (Greek owned) and Papantoniou supermarkets, one of the largest retailers in Cyprus, are at an advanced stage.

    The occupied north’s ‘prime minister’ Unal Ustel and Turkey’s Vice President Cevdet Yilmaz signed the latest annual financial protocol covering the coming year’s financial provisions from Turkey to the north, with this year’s deal worth 16 billion TL (€452 million).

    The cabinet upheld a decision to revoke the citizenship of Malaysian businessman Jho Low who is wanted by Interpol for serious financial crimes.

    A grant scheme to boost business activity within British bases territory was approved by cabinet.

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