Daily Press Review - 21/1/2020

Herodotou: Mechanism for complaints on foreclosures in late February

Central Bank (CBC) Governor Constantinos Herodotou told the House Finance Committee yesterday that the mechanism for complaints relating to foreclosures, which will have the European Central Bank’s (ECB) seal of approval, is expected to be finalised after 20 February. Consultations between the CBC and ECB began on 6 December 2019, and a number of other consultations and clarifications followed, he said. There are currently two issues that need to be ironed out, said Herodotou, and these have to be discussed between the Finance Ministry and the CBC. To this end, a meeting has been scheduled with Finance Minister Constantinos Petrides at the end of next week. Herodotou estimates that the final bill will be sent to the ECB for approval by 6-7 February. From there on, based on his experience with the ECB, Herodotou expects it to give the green light around 20-21 February. Herodotou said he had asked the credit institutions to hand over all the complaints they have received by borrowers relating to foreclosures, by the end of January. The mechanism is based on an analysis so that it does not affect the banks, but also so that it ensures that there are no complaints by citizens, he said. “We have found the right balance,” said Herodotou. The site also refers to the topic above, saying Herodotou told MPs that BoC is preparing to sell loans worth €2.8b and HB loans worth €1.2b.

 

Hellenic Bank: CCLEI dropped for the third consecutive month

The Cyprus Composite Leading Economic Index (CCLEI), which is prepared by Hellenic Bank in cooperation with the University of Cyprus, recorded an annual 3.5% reduction in November 2019, reaching 111.3 points, after dropping 3.9% in October and 4.0% in September (going by recent data). According to HB, the index continues “to signal downward, though weaker, pressure on economic growth”. The bank said that the “recent annual downward trends of the CCLEI are mainly due to the external environment, which however combined with the annual positive performance of the majority of local variables, is consistent with the forecasts of international and local agencies for the Cyprus economy, which is expected to continue to record strong, yet decelerated growth rates”. It added that the downward pressure on the CCLEI was mainly due to the annual drop in the Economic Climate Index in the Eurozone, as well as the annual increase in the price of oil in November 2019. However, HB noted that there were some favourable developments in the international environment, such as the China-US trade relations and positive industrial production indexes in Germany, which are expected to positively impact on the CCLEI. As for local developments, “the production of electricity recorded a slight annual negative growth rate in October 2019”, though on the other end of the spectrum, the positive annual performance of the majority of local indexes, particularly in the credit card and tourist arrival markets up until November 2019, as well as retail sales and registered construction permit numbers up until October 2018, contributed to containing the CCLEI’s reduction.

 

20 students to complete their studies with Hellenic’s support

Hellenic Bank will support 20 new students up until the fourth year of their studies, after assessing the applications that were submitted for its first Scholarships Programme (2019-2023). The bank announced the 20 students that were approved yesterday, Monday 20 January, and their application numbers were uploaded to the website jumpstart.hellenicbank.com. The programme, which is being implemented by HB for the first time this year, provides €2,000 a year to each student at any university or higher education academy, in Cyprus or abroad. There were 135 applications in 2019 by lyceum and technical school graduates, as well as conscripts who finished their mandatory army service in 2018.

 

Demetra Investment: Increase of value of investment in Hellenic

The value of Demetra Investment’s investment in Hellenic Bank has presented a significant increase. According to the company’s financial results, the value of its investment at end-December 2019 was €72.2m, compared with €14.9m at the end of 2018. Its investment in Hellenic represents 49.88% of DEM’s assets, compared with 11.64% in 2018. Demetra participated in HB’s share capital increase, which boosted its stake from 10.05% to 18.42%. Its bank deposits and cash at end-December 2019 totalled €3.4m, representing 2.33% of its total assets (€42.6m at end-2018 representing 33.41%). DEM’s biggest investments are in Cyprus (€31.4m), followed by Romania (€6.5m) and Bulgaria (€3.3m). The net intrinsic value of its share was €0.6563 (€0.6201 in 2018). Its total assets were €144.7m, compared with €127.6m in 2018.

 

MEMOs a new headache for Estia

Borrowers who have applied for the Estia scheme may be faced with more hassle if the property they are applying for has been placed under a MEMO due to debts owed to the state. A MEMO is placed over properties if the owner owes money to the Social Security Fund or other duties to the state. The House Finance Committee heard yesterday that the state services are demanding these debts are settled before the MEMO is lifted, whereas the banks have proposed that the state services temporarily lift the MEMO and once the borrower joins Estia, the MEMO can be reinstated. Representatives of the borrowers’ protection and primary residence protection associations told MPs that there is a serious issue with the properties that are bound by a MEMO. The banks’ association’s representative, Michalis Kronides, said that it is difficult to remove MEMOs, especially if the debts are to the state.

 

Estia: Unviable at 10%

A Finance Ministry spokesman yesterday told the House Finance Committee that the banks have received 5,638 applications for Estia, but only 1,150 were complete with all the necessary documentation. Ninety have been forwarded to the labour ministry for processing. The applications to date represent some €1.7b in bad loans backed by primary residencies. The governor said it was too early to say how many will be approved, but at first glance the Finance Ministry expects about 10% to be ruled unviable. An effort will be made to include those in other state support programmes although none existed currently.

 

JCC: Plastic money neared €4b in 2019

There was an 11% increase in card transactions in 2019, reaching €3.92b, according to JCC data. The turnover from credit card use reached €459m in December alone, recording an 8% year-on-year increase. Cypriots’ spending abroad (purchases and cash withdrawals) increased by 10% in 2019, reaching €1.93b. In December, the annual increase was 20%, with card transactions exceeding €184m. Transactions by foreigners in Cyprus (purchases) increased by 16% in 2019 reaching €1.28b, while for December they increased 19% reaching €85.9m. With the addition of transactions in trade and cash withdrawals by tourists in Cyprus, the sum for 2019 reaches €1.56b for 2019 (up 15%) and €109.5m for December (up 19%).

 

122% increase in the occupied areas

The foreign exchange crisis in Turkey and the sharp drop of the Turkish lira appear to have encouraged Cypriot sales in the occupied areas. In 2017, €9.491m were spent in the occupied areas with credit cards issued by banks in the government-controlled areas of the Republic of Cyprus, while €25.929m were spent in the government-controlled areas with Turkish credit cards. According to JCC data, in 2019, transactions in the occupied areas with government controlled issued credit cards skyrocketed by 122% compared to 2017, and totalled to €21.129m, while only €18.810m were spent in the government-controlled areas with Turkish credit cards, a 27.5% drop compared to 2017. The use of Cypriot credit cards in Turkey increased by 68.15% compared to 2017.

 

Cyprus passport applicants are high-risk

The Institute of Certified Public Accountants of Cyprus has sent a circular to its members calling for high scrutiny of citizenship via investment applicants. And it also notes that passport applicants should be considered as high-risk clients. In addition, ICPAC wants auditors to check the framework behind a potential investment stressing that this should also assist the overall economy of Cyprus. It then underlines that citizenship by investment programmes carry the risk of legalising money coming from laundering, corruption and tax evasion mainly because of the nature of the target group they attract, that is, high-income individuals. Therefore, the circular points out, particular attention should be paid to addressing all risks of possible money laundering and the reputation associated with the island’s investment programme. The goal of the circular’s guidelines is the application of uniform due diligence checks when services are provided to new or existing clients associated with the Cyprus’ Investment Programme. The guidelines are there to also assist auditors with ensuring that the implementation of anti-money laundering legislation is not circumvented within the context of providing services to applicants of this programme.

 

€ 65 for Piraeus but 30 hours away

According to Offsite the cost of the ferry from Limassol to Piraeus via the ferry line, is being examined. Cost is estimated at 130 euros round trip (including Port taxes). That is, 65 euros to go to Piraeus and 65 euros for the return. The Offsite report also reveals how much it costs to transport a car or motorcycle to Piraeus. However the cost of the ticket (65 euros) will be just for a ticket. And it takes about 30 hours to get from Limassol to Piraeus by boat. So, will you be on deck for 30 hours? Without a shower? Without sleeping anywhere? The cost of a cabin ticket is not known whether it will be over 250 euros for a round trip, but anyway the Cyprus-Greece ferry is a good alternative to traveling "to the outside world", especially for many who have phobia with airplanes, but also for many who will see such a journey together as an alternative tourist route.

 

Mohegan-TERNA awarded license for Hellinikon casino

Greece’s Gaming Supervision and Control Commission announced that it accepted the bid by the consortium Mohegan Entertainment – GEK Terna for the competition that awarded a license to build a casino in Hellinikon. Hard Rock was officially excluded from the competition.

 

Construction works for Hellinikon casino to start soon, TERNA and Mohegan

Hellas Journal reports that following the announcement that GEK-Terna and Mohegan have been awarded with the casino license, construction works are expected to begin very soon. Following these developments, the bidder that was excluded from the competition – Hard Rock International (HRI) – has 10 days to submit its objection to the rationale of the decision to the Authority for the Hearing of Pre-Judicial Objections (AEPP). It also has a right to appeal to Greece’s Council of State. As Lamda Development said on the occasion of the announcement, most of the pending issues have been resolved, including the issuance of a Presidential Decree and the relevant Joint Ministerial Decision, while the completion of the tender process and the award of a license, the settlement of rights in rem and the issuance of decisions on the pending rights to cancel are still ongoing. With the settlement of the said issues, the company is ready to start the implementation of the project, which has been called the biggest-ever investment in modern Greece.

 

New Transport Minister raises hopes

Transport Minister, Yiannis Karousos held meetings with Paphos’ stakeholders and even if he avoided to promise budget lines for different projects, there was widespread optimism that most of their demands will be met. Karousos held consecutive meetings with the Paphos, Polis Chrysochous, Yeroskipou and Peyia mayors. During these meetings, they told the Minister their priorities that concern his ministry. Speaking at his meeting with Mr Karousos, the Paphos mayor Phedonos stressed that the Minister was positive to dealing with the matters in a practical and quick manner as well as the monitoring the course of the projects. Both the Minister and the directors of the involved Transport Ministry departments committed that there will be in close communication with the Municipality so as to overcome any issues that arise from the implementation of the projects. On his part, Karousos stressed that a Supervision Committee with all the mayors will be established at his Ministry, so as to resolve issues and complete the projects on time by the Ministry or the Local Authorities.

 

Health benefits of living in the village

A new study by the Cyprus University of Technology argues that Cypriots who (even temporarily) stayed in the Troodos area, gained very significant health benefits. The study aimed to highlight the potential health benefits resulting from the environment of the wider Troodos area on human health during the summer period. Phileleftheros’ author argues that this is a very useful study that the Deputy Minister of Tourism and the Mountain Communities Commissioner should adopt and implement policies for medical tourism, also with a view to develop the mountain areas. The experimental results of the study prove something we already knew: that living in the village is better.

 

Changes in TV advertising times

An amending bill was submitted to the House by AKEL MP Eleni Mavrou (on behalf of the House Interior Affairs Committee), that according to the explanatory report that

accompanies it, revises the current legal provisions for the advertisement of games of chances, the placement of children’s toys in TV shows and the advertisement of games of chance and betting agencies on the radio and TV. The amending bill reduces the blocked hours for toy advertisement and as well as for games of chance and betting agencies. The bill mentions that the the window for radio and TV advertising for children, teleshopping hours and children’s toys teleshopping, is from 06:00-12:00 and from 19:00-06:00 on weekdays and from 19:00-06:00 on Weekends and school holidays. The total duration of radio and TV ads for children’s games cannot be more than 3 and a half minutes every hour. Ads for children’s toys, are also banned during children’s radio and TV shows, as well as five minutes before and after the TV shows start or end. As it comes to advertising games of chance and betting agencies, the amendments mention that the radio and TV advertisement of games of chance and betting agencies is prohibited from 06:00 to 20:00 every day. In exceptional cases, ads for games of chances and betting agencies are allowed on the breaks of live football games as well as 15 minutes before or after the live transmission of games on the radio as well as TV. According to the amendment, the ads need to be one and a half minutes long, every hour. The Amending bill also mentions that the Radiotelevision Authority will be able, in specific cases, to demand the immediate revocation, amendment or interruption of broadcasting ads for games of chance or betting agencies, if they consider that this ad affects underage persons or impairs the public interest.

 

UNTWO predicts global tourism will grow by 4% in 2020

The rise in the number of international tourist arrivals slowed to 4.0 % in 2019, due to a cooling global economy, geopolitical tensions and uncertainty regarding Brexit, the World Tourism Organization (UNTWO) said Monday. The deceleration mostly affected the developed economies and especially Europe and the Asia-Pacific region. In 2017 and 2018 the number of tourists internationally had increased by 7% and 6% respectively. France, Spain and the US are the countries are expected to once again be the three most visited countries in the world last year once the organisation has final figures. China, the leading outgoing tourism country recorded a 14% increase in outgoing tourism over the first half of 2019, even though tourist spending fell by 4%. The Madrid-based UN body, UNWTO, predicted global tourism will grow by 4% this year, buoyed by major sporting and cultural events such as the Tokyo Olympics in Japan and the Expo 2020 Dubai.

 

Hospital fees catalogues ready

Hospital doctors received today the catalogues with the fees for surgeons, assistant surgeons and anesthesiologists for the different medical acts/surgical operations that will be incorporated under GHS next June. The catalogues are of course preliminary and will be reviewed and adjusted as in the case of outpatient care, which will be decided between the HIO and the doctors/hospitals themselves. At the same time, the HIO committed yesterday during its meeting with private hospitals union (PASIN) that it will prepare and submit the catalogues that pertain to the expensive and specialized consumables that cannot be included in the total compensation, DRGs that will also be drafted and sent to PASIN by the end of the month. The HIO-PASIN meeting was lengthy and is considered to be the last one, as the two sides agreed that following the answers and clarifications given by the HIO, the union will now decide whether they will sign the proposed memorandum with the HIO and the Minister of Health or not. “The meetings lasted a total of 8 hours. We answered all the questions. Now the ball is in PASIN’s court to decide”, the HIO’s president Thomas Antoniou said after yesterday’s meeting. On behalf of PASIN’s board, the executive secretary of the Union Markos Christodoulou said that the union will convene to decide on the Memorandum on Thursday 30 January and from then on each hospital will take its decisions to negotiate with the HIO. At yesterday’s meeting it was made clear that the private hospitals can officially express their interest by 14 February. As HIO told PASIN’s representatives, it does not rule out cooperation with hospitals that will express interest at a later stage. However, it is very unlikely that they will implement similar regulations, since in the case where some hospitals do not show interest, the Organisation must cover the needs for certain services through the hospitals that will participate.

 

All patients will be equal

The HIO stresses that hospitals that joined the GHS, will not be allowed to keep empty rooms for the patients paying for services outside the GHS framework because in such an event the average waiting times for GHS beneficiaries would be greater than the people receiving services outside the GHS. Answering a relevant question by clinic owners, the organisation notes that the private hospitals will not be asked to provide a statement with the distribution of the rooms among GHS beneficiaries and those served outside the GHS. However, the hospitals will have the right to give services to patients who aren’t GHS beneficiaries and they will also have the right to accommodate doctors who don’t participate in the GHS, but they will not be allowed to use abuse their rights. The HIO also clarifies that they will establish certain regulations pertaining to the services, that will not be compensated by the system but are still an integral part of the total inpatient care provided outside the GHS framework. For example, the charge for a single-bed room must not be very far off from the charge that was valid before the GHS.

 

Sterilisation with husband’s consent

The Ministry of Health will establish a protocol safeguarding women’s right to sterilisation without needing their husband’s signed consent. This matter was raised by the House Human Rights Committee yesterday, which also addressed the sexual and reproductive rights of women, which in many cases are found to be either violated or not adequately safeguarded in Cyprus. During the meeting they highlighted the need to ensure women’s rights, and the that people should be free to decide about their own body. There is no regulation or legislation governing this matter, however, practical implementation in hospitals, mainly state hospitals, still require the spouse’s consent. The Ministry of Health said that it is making an effort to establish relevant protocols by which sterilisation will not require the spouse’s consent. Members of the Parliament argued it would be more appropriate if this matter was regulated by law instead of only through guidelines.

 

Male condom the only method of contraception

On the same topic as above, Alithia reports that during yesterday’s House Human Rights Committee meeting, MPs discussed about Cyprus’ lack of contraceptive methods because they are not profitable for the pharmaceutical companies that import them. As a result, a large number of women have been led to abortion, which in turn causes psychological and biological problems. The president of the Committee Skevi Koukouma expressed her concern about the lack of contraceptive methods available in Cyprus, leading to the male condom being the only available method, while the state doesn’t provide any contraceptive method through the healthcare system.

 

On-the-spot help to people abusing substances

A new Mobile Harm Reduction Unit aimed at persons that abuse substances and alcohol will be introduced next March in Cyprus. Yesterday, the National Addictions Authority Cyprus (NAAC) called non-governmental organisations, state services as well as local authorities to express interest for a €32,000 budget line, for the implementation of this programme for 1 year (with a possibility to renew for another year). This unit was seen as necessary due to the results of recent studies showing that the transmission of infectious diseases among Persons Who Inject Drugs is increasing significantly. Additionally, in recent years, there has been an increase in cases of legal and illegal psychoactive substance abuse, increased incidents of violence and delinquency, as well as an increase in the number of immigrants, mainly in downtown Nicosia, who have reduced access to health services. It should be noted that this mobile harm reduction unit aims to reduce the harmful consequences of substance abuse such as infectious diseases and mortality, rather than help users quit substance abuse.

 

How a tobacco industry is fighting smoke

The title itself is oxymoron, but there isn’t any better way to describe Philip Morris International’s (PMI) strategy. Taking into consideration the need to reduce the impact of tobacco use, it pioneered in creating and promoting alternatives that meet the needs of the smoker, but without the combustion and the familiar cigarette smoke. It’s generally accepted that the measures implemented in recent years have led to the reduction of smokers, but according to World Health Organisation (WHO) data, smokers stand at 1.1 billion, and by 2025 they will fluctuate around the same levels. Anti-smoking campaigns and bans have produced some results, however the aim of reducing smokers and improving the population’s overall health is based on reduced harm, prevention and quitting. PMI’s whole philosophy is based on these three tenets; if you don’t smoke don’t start, if you smoke then quit, and if you can’t quit then try an alternative. Research into the impact of smoking has come to a common conclusion. The have discovered thousands of substances in the smoke produced by cigarettes, of which at least 100 are associated with smoking related diseases. The release of these substances happens, mainly, due to the burning of tobacco at temperatures exceeding 800 degrees Celsius. This is where PMI scientists focused, aiming to create an alternative tobacco product that will produce fewer harmful substances. To create such a product, that will only heat tobacco while also having the necessary nicotine, is no small feat. PMI started looking into alternative tobacco products about 12 years ago, they’ve invested $5b in research and development. Data shows there are 11 million people who’ve switched to this specific product worldwide, while in Cyprus this number stands at 20,000. PMI’s goal is the penetration of alternative products internationally to exceed 30% by 2025.

 

RES failure results in fuel increases

Cyprus’ failure to meet its 10% target for Renewable Energy Sources (RES) in transport, will result in fuel increases again. The target had been set by the European Union 11 years ago (2009) and must be met by the end of 2020, as it is one of the two Cyprus’ mandatory environmental objectives. According to data by the Ministry of Energy, Commerce and Industry, Cyprus now stands at only 5% of this target and to achieve 7.3% it is necessary to mix certified fuels with conventional fuels. This move by the Ministry of Energy will result in increases in fuel prices as biofuels are more expensive, because they produce little impact on the environment. The head of the petrol station operators association, Stefanos Stefanou expressed concern over the “solution” of the occupied areas. He said this issue needs to be examined, as continuous price increases are driving consumers to the occupied areas. It’s worth noting that the latest figures show that the total value of purchases from the occupied areas almost stand at €120m in 2019. Indeed, according to the figures, the annual increase in fuel purchases from the occupied areas is estimated at 3% for 95 petrol and at 8% for diesel. The state has lost taxes of €31.9m from 95 petrol sales in the occupied areas, and €25.2m in taxes from diesel sales. Mr Stefanou stressed that we cannot want a "green" policy in the free zones while some people go through the occupied areas and refuel their cars with fuel that does not meet the required standards, citing tighter controls and penalties.