In the press today:
The banking sector’s plans have changed
Up until February, no one doubted the banks’ efforts to get rid of the burden of NPLs, aiming to limit the NPL ratio to below 10%. However, from 15 March 2020, Covid-19 also known as coronavirus, hugely overturned the narrative of the positive cycle that was apparently about to start for the Cyprus banking system. The most recent alarm was sounded by the international credit rating agency Moody’s who downgraded the Cyprus banking sector from positive to stable, due to the expected disruption of the country’s macroeconomic environment. The firm believes that the crisis will increase NPLs and affect their earnings. However, they note that the combination of already high capital flows, supervisory relaxations and potential state guarantees will keep their capital adequacy above the regulatory limits. The firms expects that the lockdown and the closure of businesses will lead to recession this year, which will overturn the country’s steady reduction of NPLs and negatively affect the banks’ profitability. Fitch also revised the prospects of Cypriot banks from stable to negative. Cypriot banks are considered more vulnerable to businesses and SMEs that are faced with risks. This is due to our bank’s significant exposure to sectors such as tourism, which were directly affected by the outbreak of the coronavirus. The first big victim of the coronavirus crisis was the potential to sell NPLs. The Bank of Cyprus was very close to choosing their preferred bidder for Helix 2 i.e. the sale of a €2.7b loan portfolio to credit acquiring companies. With this sale, the bank would remove a large burden from its balance sheet, without any significant capital burden. At the same time, Hellenic Bank was at an advanced stage of negotiations to sell NPLs of over €2b through the Tide project. What banks are worried about is the day after the crisis and how many borrowers will be in a position to pay their instalments. This scenario also worries the Central Bank of Cyprus. Moreover, banks and the two largest systemic banks, BoC and Hellenic Bank are concerned that the properties they keep in their portfolios will start to drop further in value. Most estimates believe that the drop in property values will resume.
Borrowers association congratulates Petrides and Herodotou
The borrowers association congratulated the Minister of Finance and the Central Bank Governor for their excellent coordination, which resulted in their immediate mobilisation in cooperation with the European authorities in order to tackle the financial consequences of the pandemic. They also referred to the relationship of acknowledgement and respect that the two officials have managed to build on a national and European level. “Their vigilance and ability to actively contribute scientifically in the decision-making process of the European authorities resulted in Cyprus being legally and politically prepared to enforce the final decisions when these were announced without losing any time. This was our main advantage, in the midst of the pandemic”, the association says in a relevant announcement. The association also congratulates the special emphasis that was given to supporting households and SMEs with the 9-month loan suspension, at a time when other European countries implemented a 6-month loan suspensionand the ability to plan long-term on the basis of financial analysis and realistic evaluation so as to avoid a future crisis.
Investments, large projects and recovery
The economy will start to be steadily reopened in less than two weeks and the property sector, which occupies thousands of employees and, will most likely be the first to restart its operations. The large projects will create a dynamic that will contribute to tackling the recession, the Chairman of the Association for Large Investment Projects, Andreas Demetriades said. As he said, they are currently promoting 25 large developments. Some have started being implemented, while others are at the licensing stage while others have been paused. The total cost of these investments amounts to €7b. These projects will contribute to restarting economic activity, Demetriades said. As he reported he adoption of initiatives so that the construction sector returns to normality, was a main element of the discussions at the Presidential Palace.
Improving verification process
In an effort to reduce the problems in verifying the information of beneficiaries for state subsidies, the government decided to take more measures to verify bank accounts through the submission of copies certifying the bank account information. This measure has already been implemented, allowing the team of officials to correct the mistakes that were identified. Moreover, after seeing that there were many mistakes in the applications due to wrong social insurance numbers, no application will be accepted if the social insurance number submitted isn’t confirmed at the submission.
Minimum benefits payable determined at €360
The minimum unemployment and special sick leave benefit as well as the minimum benefit given to employees due to the partial or full suspension of their business operations were determined at €360. Essentially, the minimum benefit corresponds to the value of the minimum pension, while the cap on benefits stands at €1,214 per month. On the other hand, for the self-employed the minimum amount stands at €300, while the maximum is €900. The abovementioned measures regarding the minimum limit on benefits are included in the ten corrective measures approved by the Cabinet yesterday to support employees.
State’s revenues boosted by VAT contributions
Businesses not affected by the measures to prevent the spread of the coronavirus have been called via email to pay their VAT contributions by Monday 27 April. Moreover, the country’s 200 biggest businesses were called to pay 30% of their owed VAT. The Tax Department is enforcing the relevant decree issued by the Cabinet as part of the extraordinary measures to manage the healthcare crisis. The goal of this measure is to boost the liquidity of the state. Specifically, an amending regulation provides for the monthly and not quarterly payment of VAT for business belonging to specific sectors and an advance on the VAT for the largest taxpayers.
Benefit payment timeframes are changing
The Ministry of Finance is making major cutbacks due to the serious impact of the coronavirus on public finances. Following its recommendations to other ministries and independent authorities to proceed with cutbacks and savings, with a second circular the Finance Ministry is asking that all government departments comply, including semi-governmental and local administration bodies so that they tackle the societal and economic consequences of the virus. The four measures recommended in the circular signed by the Director-General of the Finance Ministry also change the timeframes for the payment of benefits. As it is stressed, the submission of benefits such as the student loan, the child benefit, the rural areas benefit, housing benefits, the mother benefit as well as tax returns will be paid at different time periods and in coordination with the Directorate of Budget of the Ministry of Finance. At the same time, they stress that no new project will be announced nor a new contract will be awarded without the approval of the relevant department of the Ministry of Finance.
Noise pollution in Limassol port neighbourhoods
(Reproduction from print edition yesterday). A reader’s letter to Phileleftheros newspaper (signed Constantinos Ch.): “I am a resident of Zakaki and following the extension that took place at Limassol port, its borders have reached very close to my home. Thus, the noise caused from the various operations that are carried out there during the day, but also during the night, prevent us from getting any rest. This is happening even now, when there are restrictions on movement and everyone is supposedly staying at home and enjoying the tranquillity. The two huge ‘cranes’ at the port operate day and night, while especially at nights we cannot get any sleep. Note that the area that is being used for the port’s needs is being extended and it has already touched the residential area. Next to our homes, huge freezer-containers are parked after being dropped off by large vehicles, and besides the visual pollution, they also cause general air pollution, on top of the noise pollution. A licence was given that allows these noisy operations to take place at the port 24 hours a day, without anyone thinking that this has caused huge problems for those who happen to live near the port.” The newspaper responds that it contacted Limassol Mayor Nicos Nicolaides, who said that he was aware of the problem and that he has already made his position clear that he is by the residents’ side and is making efforts to find solutions. Nicolaides said the residents surrounding the port raised the issue of noise pollution and that the municipal authorities considered the demands reasonable. Hence, the mayor asked the Environment Department to carry out an audio study, to register and verify the problem. However, the Department said such a study was carried out every five years. The matter was then taken to Parliament, where Nicolaides said the Municipality of Limassol was willing to sponsor the specific study, under the condition that the Department provides the relevant specifications. “It has since been 3-4 months and the Environment Department continues to refuse to provide the relevant specifications. This is unacceptable. I have repeatedly requested a meeting with the director of the Environment Department and it has not been arranged yet,” said Nicolaides.
Ankara’s diplomatic pandemic
A new diplomatic war has broken out between Turkey and France over the former’s fresh provocative actions in the Eastern Mediterranean and Middle East. Ankara was incensed by criticism from Paris and proceeded to launch an unprecedented attack against France, which it even blamed for the Cyprus problem. Commenting on an interview given by French Foreign Minister Jean-Yves Le Drian to Le Monde newspaper, Turkish foreign ministry spokesman Hami Aksoy accused France of attempting to cover up the dead-end situation it is in because of the coronavirus, by targeting Turkey. “We understand the frustration caused by the fact that France can’t offer a hand of assistance to its neighbours during these difficult times, when Turkey is rushing to provide friendly assistance,” said an announcement by the Turkish FM. “In reality, it is France that supports the terrorist organisations in Syria, which encourages the powers against the legal regime of Libya, undermines dynamic solutions for the Cyprus problem, persistently ignores the rights of the Turkish Cypriots and attempts to impose sanctions on its ally Turkey,” it added. In his interview, the French foreign minister had criticised Turkey over its behaviour in order for Ankara to get a response to its demand for support from NATO. Le Drian said that Turkey “is in NATO while it chooses Russian anti-aircraft systems; it takes Syrians to Libya for them to participate in hostilities; it uses the migration issue as a means for blackmail, and it sends ships to the Eastern Mediterranean”. He added that when Turkey asks for solidarity, it should also give specific explanations.
- Kyprianou
Turkey’s actions in the Cyprus EEZ are illegal, condemnable and unacceptable, said the leader of main opposition AKEL, Andreas Kyprianou, yesterday. He said the government’s reaction to the provocations is moving in the right direction. But he said they are not going to solve the problem. Last time Cyprus asked for action from the EU, in the form of sanctions against TPAO officials, the reaction was unfortunately lukewarm and very delayed, said Kyprianou. “So we reiterate, once the pandemic is over, Mr Anastasiades will have to take the initiative to arrange an immediate resumption of substantive negotiations to solve the Cyprus problem, with consistency and dedication to finding a solution, within the framework defined in the UN resolutions, the high-level agreements, international justice and the principles upon which the EU is founded. This will be the solution to deal with all the other problems that Turkey is illegally causing, with an unprecedented proactiveness.”
Hoegh through the back door
Phileleftheros reports on the letters sent by Hoegh LNG to the President and Finance and Energy Ministers to set up an FSRU facility in Cyprus, as a cheaper solution to import LNG. The paper reports that its CEO and chairman Sveinung Stohle has become personally involved, exerting pressure on the government to promote a collaboration with Cypriot companies VTTV and H4E Gas Fuel to set up the floating natural gas storage unit. With Hoegh’s proposed solution, the facility will be up and running in around 15 months, providing natural gas for electricity production. DEFA-ETYFA expect to operate their facility in Vasilikos in August 2022. It is noted that constructions on the latter, including port infrastructure and the actual floating unit, are scheduled to begin this June. If the proposal is accepted, this will mean electricity bills will become much cheaper, both because of the cheaper fuel and the reduction of the emissions fee charged to bills.
Construction work in August
Natural Gas Public Company DEFA hopes that it will be in a position to greenlight the launch of construction works by China Petroleum Pipeline Engineering – Metron SA for the state infrastructure to import, store and re-gasify natural gas by August. According to Politis’ sources at DEFA, intensive preparations are underway to settle all pending matters in the next 2-3 months, so that the construction work can begin this August, with the project contracted to be completed in two years from when works begin.
Hope from Sweden!
Three big tour operators in Sweden – Apollo, TUI and Ving – have announced the launch of chartered flights to Larnaca in mid-June. Also, another prominent Norwegian tour operator has announced that it will launch flights to Cyprus on 19 June. These developments are extremely encouraging for the country’s tourism industry, which is experiencing its worst year since the 1974 Turkish invasion. However, everything will become clearer once Cyprus is in the position to open its airports again and start allowing in visitors from abroad. The Scandinavian market may be the island’s saving grace, provided that everything goes smoothly and the experts’ predictions for the coronavirus being contained prove true. Member of the Ayia Napa Tourism Board, Lakis Avraamides, told Politis newspaper that the announcements by the aforementioned tour operators have led to reserved optimism. However, it all depends on when Cyprus will open its airports again and what terms and conditions will be in place for visitors to arrive. “Whatever these procedures are, as a state, we must act in time and take swift decisions,” said Avraamides. “The announcements of the Scandinavian travel agents are positive; however, a lot will depend on when Cyprus will be ready to open its doors and under which conditions.”
More state support or else bankruptcy
Entertainment venues in the free Famagusta district have called for more state support, with their association issuing an announcement yesterday saying that the support measures announced so far by the government are not enough to save their businesses, which rely heavily on tourism. It therefore asked for a special approach for these businesses. “Following teleconferences and discussions between its members, the association notes that the support measures that have been announced so far do not satisfy the Famagusta entertainment venues, which are on life support. The government is urged to realise that Famagusta lives and breathes tourism, with the main characteristic being seasonality,” it said. It further warned that if state support is not stepped up, then it is possible that venues will remain closed once the restrictive measures are lifted.
7 ways to help you use less plastic in your daily life
Plastic pollution in our oceans has been rising at an alarming rate, resulting in 8 million tonnes of plastic ending up in the sea each year. If you calculate the amount over 10 years, the numbers turn really scary. There is a lot that anyone can do on their own to help the environment, starting with a few small changes in their daily lives. Try to avoid buying single-use-plastics, such as plastic bottles of water; instead try to buy other versions of your products that may be in reusable packaging. Buy a reusable bag, and keep it in your car or folded in your everyday bag, at your disposal for the next time you need it, instead of buying plastic ones. Avoid microspheres, which can be found in everyday beauty products such as facial cleansers and toothpastes, which are rinsed in the sink and end up in our oceans. Prefer to buy bulk foods, using fewer packages. You can keep food such as cereals or pasta in glass jars to help the environment, but also save money in the long run. Cook healthy meals with fresh ingredients and avoid using ready meals, which are packages with plastic. Rethink about your beauty routine, makeup remover wipes and cotton pads should always be thrown in the garbage. Look for biodegradable wipes or choose cotton wipes that can be washed and reused such as Face Halo. Check your closet for any clothes that contain plastic, in synthetic fibres such as polyester and lycra that have microplastic fibres; don’t throw your clothes away just keep it in mind for future reference!
