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EU announcement: Cyprus has excellent bathing water quality

LoveCyprus — Tue, 09 Jun 2020 07:06:52 +0000

Environment Minister Costas Kadis on Monday hailed the announcement by the EU that Cyprus tops the MS on the quality of its bathing waters, with 99,1% being of excellent quality for 2019.

The Minister pointed out that the quality of the waters is linked with tourism. He said that the quality is important for the health of the swimmers and the environment but at the same time is associated wit the economy and the tourist industry.

He pointed out that Cyprus’ excellent results did not come by chance as since its admission to the EU in 2004, Cyprus has been complying with strict criteria on bathing waters.

Kadis also said that between May-October 2019 a total of 112 bathing areas have been under inspection on a monthly basis and tests were carried out before the swimming period.

He praised the actions of the Environment Department which is responsible for the application of EU directives as well as the actions for the Health Services of the Health Ministry, the State Laboratory and the local authorities.

Source: CNA

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FinMin: Cyprus enters recovery phase as banks say they are ready to support the economy

LoveCyprus — Wed, 03 Jun 2020 05:52:54 +0000

The first signs from the market following the partial lifting of lockdown measures are very positive, Minister of Finance Constantinos Petrides said on Tuesday, adding that “we will emerge victorious from this uncertain battle.”

Cyprus President Nicos Anastasiades and Petrides discussed the situation of the economy with the CEOs of the Cypriot commercial banks after the launching of the government second support package that contains interest rate subsidies and VAT reductions for the tourist sector and guarantees to the European Investment Bank for cheap loans to the economy through local banks.

It was a very constructive discussions, we pass to the second phase, that of recovery, Petrides said in statements following the meeting adding “both the government and the banking sector will contribute with the means at their disposal towards that end.”

“Market sentiment is changing and this is very important,” Petrides said.

On the interest rate subsidy, Petrides said this is a very important assistance and what we said today is that while entering this second phase and with the change in sentiment of the people, the banks with their participation and by explaining these rapid procedures will do their part so that we all support the economy.”

“And we have every right to be really optimistic that we will manage to emerge victorious from this crisis.”

Responding to a question, Petrides said “the first signs concerning the market and the labour market following the partial lifting of restrictions are very positive and we have every right to be optimistic.”

Stating that there will be more data in the coming period, the Finance Minister added that “it seems the government’s measures have acted as a catalyst.”

He also noted that the growth registered in the last years have given the public finances and the private economy the resilience necessary to cope with the crisis.

“Of course, there are problems, currently our plans are more targeted but we are convinced we will emerge victorious from this uncertain battle, both the private sector, the state, the government and political parties. And this is the positive message we should give as we pass to the restart phase,” he concluded.

On his part, Ioannis Matsis, President of the Association of Cyprus Banks (ACB) assured that the banks have the intention, the liquidity and the capital buffers to support the economy.

Welcoming the government measures, Matsis said that measures such as interest rate subsidies and loans through the EIB will give the banks greater capacity to provide loans.

He also observed that since the relaxation of the lockdown measures and by monitoring credit and debit card movement and other data “we have seen the economy expanding rapidly.”

“Therefore, things seem better than our April estimates and we are very optimistic,” he said.

Asked on the role of the banks in the economic restart phase, Matsis said “as banks we have the will, the intention the liquidity and the capital adequacy to support the economy.”

“It would be beneficial for all, both the society, the economy and the banks alike, to proceed with (granting of) financing and liquidity,” he said, pointing out however that banks always need to assess the viability of the borrowers.

But Matsis noted that “the schemes announced by the government will bring increase volume (to the banks) and will be very helpful.”

Source: CNA

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Gradual lifting of restrictions and economy restart strategy before Cabinet on April 29

LoveCyprus — Wed, 22 Apr 2020 05:34:54 +0000

A strategy on the gradual lifting of restrictive measures in place to contain the COVID-19 pandemic and the economy`s restart is expected to be presented to the Cabinet of Cyprus on April 29, Government Spokesperson Kyriacos Koushos said on Tuesday.

Cyprus President Nicos Anastasiades had two meetings today with employers organisations and trade unions and construction sector actors.

In statements after the meetings, Koushos said that they were convened in order for President Anastasiades to inform them on the situation as it stands in relation with managing the COVID-19 pandemic and to listen to economic and social partners’ views on the strategy which is being prepared by the government for the gradual lifting of restrictive measures and restarting the economy.

All participants in the two meetings, he noted, “expressed their satisfaction in relation to the measures the government has taken so far and submitted their positions as to the planning for the gradual lifting of restrictions and the operation of business activity sectors.”

During the meetings, Koushos said, President Anastasiades “stressed that both the strategy for the gradual lifting of restrictive measures and the economy’s restart will fully depend on epidemiological data, the scientific team’s recommendations, the systematic monitoring of the situation through testing and the capability of taking and maintaining safety measures.”

He further informed that the strategy which is being drafted by the relevant ministerial committee is expected to be presented at the Council of Ministers on April 29.

Source: CNA

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Cyprus economy to shrink by 6.5% in 2020 amid coronavirus pandemic, says IMF

LoveCyprus — Wed, 15 Apr 2020 05:52:56 +0000

The Cypriot economy will shrink by 6.5% of GDP in 2020, amid the coronavirus pandemic followed by a sharp but not equal recovery in 2021, the International Monetary Fund (IMF) said in its April 2020 World Economic Outlook issued today.

According to the IMF, following a growth rate of 3.2% in 2019, the Cypriot GDP will shrink by 6.5% in 2020, compared with its projection of 2.9% in the October 2019 WEO.

In 2021 the Cypriot economy is projected to bounce back registering a growth rate of 5.6%.

According to IMF estimates, Cyprus inflation will amount to 0.7% in 2020 follower by 1.0% the following year.

Unemployment from 7.1% in 2019 will rise to 8.8% this year and is projected to decline to 7.4% in 2021.

Cyprus’ current account deficit is projected to reach 8.3% this year from -6.7% in 2019 and will decline to -5.6% in 2021.

Amid the coronavirus pandemic, the IMF downgraded its projections for the world output, which is forecasted to shrink by 3.0% this year followed by a sharp recovery in 2020 amounting to 5.8%.

The Euro area economy is projected to shrink by 7.5% followed by a recovery amounting to 4.7% in 2021, while the US economy is forecasted to shrink with a rate of 5.9% to be followed by a growth rate amounting to 4.7% next year.

“This crisis is like no other. First, the shock is large,” IMF says, adding “the output loss associated with this health emergency and related containment measures likely dwarfs the losses that triggered the global financial crisis.”

According to the IMF, this crisis will need to be dealt with in two phases: a phase of containment and stabilization followed by the recovery phase, while “in both phases public health and economic policies have crucial roles to play.”

“Quarantines, lockdowns, and social distancing are all critical for slowing transmission, giving the health care system time to handle the surge in demand for its services and buying time for researchers to try to develop therapies and a vaccine. These measures can help avoid an even more severe and protracted slump in activity and set the stage for economic recovery,” the IMF notes.
Source: CNA

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Finance Minister calls for unity for the sake of the economy

LoveCyprus — Tue, 14 Apr 2020 06:03:29 +0000

Finance Minister Constantinos Petrides called for unity on the domestic front, for the sake of the economy, noting that the situation is difficult, and resources are not infinite.

He was speaking on Monday after a meeting at the Presidential Palace, under the President of Cyprus, where political party leaders were briefed about the situation of the economy.

At a time of deep crisis, it is required that the political world and the government display maximum unity and responsibility vis-à-vis European policies and the EU, in order to be able to overcome the difficulties ahead of us in the best possible way, Petrides said.

He also noted that during the meeting they had a thorough discussion about the economy, noting that the fiscal support package of the government is now estimated at 5.4% of GDP or €1.32 bln, compared to 3% of GDP on average at European level.

The Minister also said that all available tools provided by the EU and the European Commission must be utilized, including that of government guarantees to businesses through lending. On the latter, the Minister noted that they had a thorough and constructive discussion, and said that they will look into proposals and take into account the concerns of the political parties “so that we can finally use this tool as well.”

Cyprus is among the member states that took very strict measures to limit the loss of human lives from COVID-19, the Minister said, adding that the impact on the economy is expected to be bigger.

Success will also depend on the gradual resumption of economic activity across sectors, the Minister concluded.

Source: CNA

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Cyprus President briefs political party leaders about the economy

LoveCyprus — Tue, 14 Apr 2020 05:57:22 +0000

Cyprus President, Nicos Anastasiades briefs on Monday political party leaders about the situation of the economy, due to the coronavirus pandemic, as well as about the government’s plans on how to address the economic repercussions of the pandemic.

The meeting of the political party leaders, under Cyprus President, Nicos Anastasiades takes places at the Presidential Palace, and is also attended by the House President, Demetris Syllouris, the Central Bank of Cyprus Governor Constantinos Erodotou and the Finance Minister Constantinos Petrides.

Government Spokesman Kyriakos Koushos has told the Cyprus News Agency (CNA) that political party leaders will be briefed about the state finances and the state’s intentions as regards the economy, noting that “a discussion will take place about the situation of the economy as it is being formed due to the crisis created by the coronavirus pandemic, which inevitably affects Cyprus’ economy as well.”

Political party leaders will be informed about the potentials of the state and the plans made by the Finance Ministry to address the economic repercussions of the coronavirus pandemic, Koushos noted. He also said that the political party leaders are expected to express their views on this issue during the meeting.

Source: CNA

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Fitch’s rating action highlights Cyprus’ responsible fiscal management, FinMin says

LoveCyprus — Mon, 06 Apr 2020 11:06:42 +0000

The announcement of Fitch rating agency on Cyprus long term rating highlights the government’s responsible management both of the economy and the public finances under the present adverse conditions due to the coronavirus pandemic, Ministry of Finance said on Saturday.

Fitch yesterday maintained Cyprus long-term credit rating to BBB- changing the outlook to stable from positive.

“Fitch rating agency’s announcement maintaining the Republic of Cyprus credit rating under these adverse conditions, even with stable outlook, shows that the government’s responsible management of the economy and of the public finances remains the key to safeguarding macroeconomic stability,” the Ministry said in a press release.

“In these particularly difficult conditions in the global economy and international markets due to the coronavirus pandemic crisis and the economic challenges we are called on to face the Finance Ministry remains focused on maintaining the Cypriot economy’s credibility to the maximum extent and on maintaining jobs and supporting the economy,” the Ministry added.

Source: CNA

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Policy reforms crucial to backbone sectors performance, UCY’s Economic Research Centre says

LoveCyprus — Tue, 31 Mar 2020 05:46:39 +0000

Policy reforms towards improved legal and institutional environment are crucial to the performance of the backbone sectors, according to the productivity analysis released today by the University of Cyprus’ Economic Research Centre (ERC).

Based on the analysis, a particularly tough period for the Cyprus economy was the period of the European economic crisis. Over the years from 2007 to 2009, a period by the end of which the European economic crisis began to unfold, as well as up to 2014 is the worse in terms of productivity growth (TFP growth) for all sectors of the economy. The banking crisis that peaked in 2013 also affected sectoral performance.

It is not until the last period of our sample, the years between 2015 and 2018, that the Cyprus economy showed a remarkable improvement in terms of productivity growth, both at the aggregate and at the sectoral level. This is mainly due to reforms (in the labour market and the public sector) that have taken place since the beginning of the crisis, it is noted.

Cyprus’ main productivity growth drivers, it is added, are the Information and communication sector, the Financial and insurance sector and the Wholesale and retail trade transport, accommodation and food service sector. Productivity growth in these backbone sectors over the period 1996-2018 exceeded the productivity growth in all other sectors. On the other hand, the analysis says, among the worst contributors to the economys’ productivity growth are the Industry and the Agriculture, forestry and fishing sectors. These two sectors are relatively small and their TFP grow this on average amongst the lowest relatively to the other sectors.

It is noted that policy reforms towards improved legal and institutional environment are crucial to the performance of the backbone sectors. Countries with deeper financial markets, flexibility in their labour markets, more skilled labour, and greater private investment in R&D, are also the countries whose high-tech industries are experiencing higher TFP growth. Further, labour market regulations, like strict employment protection legislation are known to depress productivity in low technology sectors. Labour market flexibility and efficient financial markets can ease the shift of labour and capital from less-to more-productive activities, it is added.

Overall, policies introducing greater flexibility in the labour market, reforming the public sector to minimize bureaucracy and increase efficiency, as well as policies that support innovation through financial deepening and human capital investment, should be a priority in order to promote and sustain productivity and, consequently, economic growth, the analysis concludes.

Source: CNA

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State considers granting €2 billion guarantees to unlock credit to the economy amid COVID19 epidemic

LoveCyprus — Tue, 24 Mar 2020 06:55:04 +0000

The Cyprus government is considering a plan to provide state guarantees to banks amounting to €2 billion, in a bid to unlock credit to self-employed, small and medium-sized enterprises and large corporations, hit by the coronavirus epidemic.

The plan, which will be put into consultation with the Cypriot banks provides for the granting of government guarantees to SMEs and self-employed persons amounting to €1.7 billion and €0.3 bl for large corporations.

The aim of the plan, a copy of which was obtained by CNA, “is to provide state government guarantees with a total amount of up to €2 billion to Cypriot licensed banking institutions, including subsidiaries of foreign credit institutions with the purpose to provide loans to companies and self-employed persons (to help them) to deal with the consequences of the measures to combat the coronavirus (epidemic).”

The plan aims to cover the credit risk encouraging the bank to provide cheap new loans from April 2 until the end of the year, as well to cover the credit risk current loans of Self-employed persons, SMEs and large corporates which have been hit by the coronavirus epidemic.

Furthermore, the plan also covers the issuance of current accounts and overdrafts that may not exceed 50% of amount offered to a self-employed person, 25% of the amount provided to an SME and 15% of large corporation.

“The provision of loans aims to cover the companies’ and self-employed persons’ liquidity needs, working capital and investments,” the draft reads.

However, the draft makes clear that self-employed or corporates that had non-performing exposures at the end of 2019 will not be eligible for the plan.

As far as the limit of loans is concerned, the draft notes that a loan cannot exceed an amount that is double of a company’s or a self-employed total annual wage bill in 2019 or the latest available year, or cannot exceed the annual wagebill for the first two years of operation in case of companies or self-employed persons that began operations in January 2019.

According to the draft, in some justified cases and based on liquidity plans, loans can be increased to cover the liquidity needs for the next 18 months in case of a self-employed person or an SME and the next 12 months when it comes to a large corporation.

According to the draft, the plan will be put into force on April 2 until the end of the year.

Source: CNA

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Government submits complementary budget amounting to €302 ml due to COVID-19

LoveCyprus — Fri, 20 Mar 2020 07:38:44 +0000

The government submitted on 19th of March a complementary budget amounting to €302 million with a fiscal impact of 1.3% of GDP, as part of a €700 million economic package to alleviate consequences on the economy due to the coronavirus epidemic.

The Finance Minister invoked a clause in the fiscal responsibility and budget system law allowing for the submission of complementary budget prior to 15 June when special circumstances prevail as an unusual event out of the Republic’s control with grave consequences on the general government’s fiscal situation.

The complementary budget covers expenditures of the fiscal package aiming to support vulnerable groups, companies, self-employed and the economy in general, a report accompanying the bill said.

The budget provides for €40 million for the granting of Special Leave to parents in both private and the public sector who are forced to stay at home to care for the children up to 15 years old due to the decision to close public and private schools.

An amount of €110 million as part of the Businesses Suspension of Operations Plan covering companies which suspend operations or lose 25% of the turnover. The scheme aims to protect jobs while providing unemployment allowance for the time a company suspends operations.

The budget also provides for €10 million for the support of small and medium sized corporations that employ up to five persons. These companies will be sudsidised with 70% of their employees’ salaries provided they had a 25% in their turnover and that they don’t’ proceed with any layoffs.

An amount of €16 million will be used to pay sick leave with an average amount of €800.

The budget also includes €100 million for the combating of the coronavirus epidemic and, if necessary, will be utilised for the hiring of additional doctors and other health and support personnel, equipment and other infrastructure as well for the support of the Cyprus Institute of Neurology and Genetics in human resources and equipment.

An additional €15 million are earmarked for the allowance of €750 to be paid each student who opted to stay to the countries where they study.

The budget also provides for €11 million earmarked for the recovery of the Cyprus tourism covering the period of June – September, as well as actions to attract tourists in the period of October – March 2021.

Source: CNA

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