Decisions regarding the co-operative banking sector in Cyprus might have been different, a senior European Commission official told MPs on Tuesday, but noted that the final solution was not too bad.

“Now with the benefit of hindsight we might have made things differently and decided differently but I think all in all the solution does not look too bad” said Manfred Bergmann of the Directorate General for Economic and Financial Affairs of the European Commission.

He was meeting with MPs of the House Finance and Labour Committees, in Nicosia, following the European Commission’s 2019 report for Cyprus, published in February.

“It is not really a solution” he said, adding that “the only thing that happened is that what was non performing in the banking sector is now non performing in the public sector via the special entity we have created for this”.

In his remarks Bergmann warned that Cyprus has the “major disadvantage” of being a small open economy, which makes it “very vulnerable to shocks” and “not really resilient”. The Cypriot economy, he went on, is based on tourism, construction and the golden passport regime and “these are issues which might be very fragile” he stressed.

Bergmann also said that public servants in Cyprus seem to enjoy both high salaries and protection of their positions, unlike in other EU member states where public servants have their positions secured but get lower wages. “In Cyprus they have both high wages and protection, sounds like having the cake and eating it. And when we talk about lack of qualified labor in the private sector one reason might be this and another reason might be the education system” he noted, adding that “the economy is in a transition phase and the private sector and education hasn’t caught up yet. Cooperation between the private sector and education is needed” he stressed.

On privatizations he told Mps that “we don’t make it a mantra and we don’t make it a religion” but added that “if you don’t want to go for privatization in the fields that you have monopolies, such as telecommunication or energy, you need a plan B so that at the end of the day the result is good” and  “you have a very efficient telecommunication sector, transport or energy sector”.

Barbara Kauffmann, Director for Employment and Social Governance in DG Employment said that Cyprus has seen a “significant increase” in part time employment and in atypical labour which “is a concern”. She also said that the rate of employees that earn less than the minimum wage in Cyprus is relatively low compared with other EU member states.

Source: StockWatch

The European Parliament urged EU member states on Tuesday to curb money-laundering in the bloc by ending programmes by several countries, including Cyprus, to sell visa and passports, a step the multi-billion-dollar industry said would cause economic damage.

The recommendation is part of a hard-hitting report released late last month, which accused seven EU countries of acting as tax havens: Cyprus, Luxembourg, Ireland, Malta, Hungary, Belgium and the Netherlands.

The document was the result of a year’s work by the parliament’s committee on financial crime and tax evasion. The report has now been adopted by the whole assembly, boosting its political weight, though it remains non-binding.

Lawmakers said EU states should “phase out” as soon as possible all existing schemes to market citizenship and residency permits to wealthy foreigners. Currently 20 of the 28 EU states run these programmes.

The economic advantages of these schemes “do not offset the serious security, money laundering and tax evasion risks they present”, the resolution said, echoing a report from the European Commission in January.

The industry’s trade association, the Investment Migration Council, said that ending the programmes would threaten vital investments in “peripheral economies”.

Lawmakers upheld the Commission’s warnings on risks posed mostly by programmes run by Malta and Cyprus.

“A good first step to combat intra-EU money laundering would be to get rid of the so-called ‘golden visa’ which are a gateway for money laundering and organised crime,” said Markus Ferber, head of the conservative group in the parliament’s economic committee.

In the report, lawmakers also urged the creation of an EU-wide financial police to counter the laundering of proceeds from criminal activities, which they estimated amount to €110 billion annually in the EU.

They called for stricter rules and supervision to counter money laundering in the face of the series of scandals which hit several banks, noting that the latest overhauls maintained several loopholes in the EU legal framework.

The report further urged the EU Commission to assess money-laundering risks posed by legal arrangements such as special purpose vehicles and non-charitable purpose trusts, especially in Britain and its crown dependencies and overseas territories.

More broadly, deputies called for tougher EU rules against tax evasion and tax avoidance, saying the bloc should counter these practices in foreign tax havens and also in the seven EU states that “facilitate aggressive tax planning”.

The report by a special European Parliament committee on financial crime and taxation that was made public at the end of last month named Cyprus and the six other member states as displaying traits of tax havens.

Its report was adopted in February by the overwhelming majority of MEPs, including the European People’s Party (EPP) – the biggest group in the European Parliament whose membership includes ruling Disy.

Included among the committee’s findings and recommendations were that the seven EU countries facilitate aggressive tax planning; that the golden visas and passports were problematic and should be phased out; that there was great concern about member states’ general lack of political will in Council to tackle tax evasion/avoidance and financial crime; that the cum-ex fraud scheme clearly showed that the complexity of tax systems results in legal loopholes and that multilateral, and not bilateral, tax treaties were the way forward.

The recommendations ranged from overhauling the system for dealing with financial crimes, tax evasion and tax avoidance by thoroughly improving cooperation in all areas between the multitude of authorities involved, to setting up new bodies at the EU and global level.

Cyprus has been censured a number of times by the EU over the lack of transparency of its citizenship-by-investment programme and inadequate checks regarding the origins of wealth of individuals.

In the initial report, Polish MEP and committee coordinator Dariusz Rosati pointed out Russia’s role in several scandals was investigated by the special committee. “Money laundering cases, including ING Bank, ABLV Bank, Danske Bank as well as Deutsche Bank were linked to Russian capital or citizens,” said Rosati, the EPP group’s spokesman in the special committee.

“In addition, the infamous golden visa programmes very often benefit Russian oligarchs. Our work in the committee has proven that Russians and Russia play a disreputable role in tax avoidance, tax evasion and money laundering within the EU.”

The EPP group also censured the inability of EU member states to agree on fundamental measures to tackle the problem of legal tax avoidance.

“Through inaction and lack of cooperation, member states are enabling the problem. The single market needs, among others, a Common Consolidated Corporate Tax Base. We call on the Council to stop quarrelling. European citizens do not want their leaders to be the weakest link in this battle,” Rosati said.

Source; CyprusMail

British lawmakers wrested control of the parliamentary agenda from the government for a day in a highly unusual bid to find a way through the Brexit impasse after Prime Minister Theresa May’s EU divorce deal was rejected again.

Lawmakers will now vote on a range of Brexit options on Wednesday, giving parliament a chance to indicate whether it can agree on a deal with closer ties to Brussels – and then try to push the government in that direction.

Nearly three years after the 2016 EU membership referendum, and four days before Britain was supposed to leave the bloc, it remains still unclear how, when or even if Brexit will take place, with parliament and the nation still bitterly divided.

The vote underlined the extent to which May has lost authority over her own lawmakers and ministers, though she said the government would not be bound by the results of the so-called indicative votes.

“The government will continue to call for realism – any options considered must be deliverable in negotiations with the EU,” said a spokesman for the Department for Exiting the European Union.

Brexit minister Stephen Barclay had said on Sunday that if parliament took control of the Brexit process, a snap election – which the main opposition Labour party would be likely to back – could be the consequence.

May too has made clear that she would not implement a proposal that ran counter to her election manifesto, which promised a clean break with the EU.

THIRD VOTE ON MAY’S DEAL?

But while lawmakers may struggle to turn Wednesday’s indicative votes into law, if they do reach some kind of a consensus, it would pile pressure on a prime minister who has accused parliament of having no more viable solution than her deal.

Monday’s vote was put forward by Oliver Letwin, a lawmaker in May’s Conservative Party. The prime minister had earlier admitted that the deal she had agreed with the EU after two years of talks still did not have enough support to pass.

May has not ruled out bringing back her deal for a third time this week. Thursday would be the most likely day.

The Sun newspaper reported that she had suggested on Sunday that she could resign if that persuaded enough doubters in her party to back her deal.

Some of her lawmakers have already publicly urged her to go.

Parliament backed Letwin’s proposal more clearly than had been expected, by 329 votes to 302, helped by three junior ministers who resigned in order to defy the government line.

“The amendment … upends the balance between our democratic institutions and sets a dangerous, unpredictable precedent for the future,” the Brexit department spokesman said.

Sterling rose slightly after the votes but the gains were muted with traders little wiser about when, how and even if Britain will exit the European Union.

“No government could give a blank cheque to commit to an outcome without knowing what it is,” May said before the vote. “So I cannot commit the government to delivering the outcome of any votes held by this house.”

SNAP ELECTION?

Opposition leader Jeremy Corbyn raised the prospect of putting any proposal supported by lawmakers back to the people.

“This House must also consider whether any deal should be put to the people for a confirmatory vote,” he told parliament after the votes.

Last week, the EU agreed to delay Britain’s original March 29 departure date because of the deadlock. Now, it will leave the EU on May 22 if May’s deal is approved this week. If not, it will have until April 12 to outline its plans.

European Council President Donald Tusk said last week that all Brexit options were still open for Britain until April 12, including a deal, a departure with no deal, a long extension – or even revoking Article 50 and remaining in the EU.

May’s deal was defeated in parliament by 149 votes on March 12 and by 230 votes on Jan. 15.

To get her deal passed, May must win over at least 75 MPs who voted against her on March 12 – dozens of rebels in her Conservative Party, some opposition Labour Party MPs and the Northern Irish Democratic Unionist Party (DUP), which props up her minority government but has rejected her deal so far.

Earlier, May’s divided cabinet of senior ministers had met to discuss a way forward. Some reports said ministers had “war-gamed” a national election.

“I think we’re going to end up with a general election before the end of this year, probably in the summer,” Conservative lawmaker Andrew Bridgen, who supports Brexit, told Sky News.

Source: CyprusMail

Millions of butterflies have made their appearance in Cyprus as part of an annual migration from North Africa, to the delight of hundreds of people across the island captivated by the beautiful sight.

Elli Tzirkalli, a doctoral student at Ioannina University and a butterfly researcher told, philenews that the mass migration of the Vanessa Cardui or Painted Lady starts from North Africa, passes through Israel and Cyprus, over the Mediterranean and then to Central Europe.

At the beginning of May, the Painted Lady will also be observed in the UK, she said.

Tzirkalli said that the flight of butterflies is observed in Cyprus every year at this time of the year. However, this year’s migration appears to have multiple generations. She said the reason for migration are weather conditions and their survival.

The Painted Lady can have been seen in Cyprus to a smaller scale throughout the year from Akrotiri to Mount Olympus.

Cyprus has a special group — the Cyprus Butterfly Studies group — which studies the specific species, she said adding that a butterfly observation programme would be launched soon.

Source: InCyprus

Energy Minister of Cyprus Yiorgos Lakkotrypis said Tuesday that the fact that discoveries in the Eastern Mediterranean and Cyprus were piling up and further exploration was planned, was creating confidence that the interest would remain alive, despite the Turkish provocations trying to create conditions of instability in the region.

The Minister was speaking at a panel discussion during the 10th Economic Ideas Forum organised by the Wilfried Martens Centre of European Studies and the Glafkos Clerides Institute, in Nicosia.

Lakkotrypis also said that the Eastern Mediterranean as an alternative source of energy for Europe, was receiving lately a lot of attention because of the new discoveries.  

“This is why we feel that we should implement our strategy and keep the interest we have built in the region”, he said, stressing the importance of keeping Cyprus’ interests aligned with the companies in the sector or with the countries from which the companies originate, in order to have support.

“At the same time, we try our best to create stable conditions all around, including Turkey”, he said.

He also mentioned that there were many issues with Turkey that needed to be addressed, such as the questioning of the Republic of Cyprus` Exclusive Economic Zone (EEZ).
 
“If we accept Turkish version of our EEZ we will be left with 30% of what we have today”, he said adding that “we will have all of the discoveries, Aphrodite, Calypso, Glafkos, falling into other countries”. He expressed hope that activities and discoveries in gas sector would act as an incentive to Turkey to sit down to the negotiating table to find a just solution to the Cyprus problem.

Referring to Turkey’s claims that the country advocates the rights of Turkish Cypriots, he wondered if having only 30% of the Cypriot EEZ was best for the Turkish Cypriots.
 
He also pointed out that Turkey’s provocations were aiming to create destabilization conditions for the companies, so as not to come and invest in Cyprus. The Republic of Cyprus, as he said, had been very careful in order not to engage in this game of destabilization and to proceed with its strategic plans in oil and gas.
 
Asked about the gas quantities needed for Cyprus to acquire its own land-based natural gas liquefaction terminal, he said that energy plant needed 12-15 tcf to make it competitive.

He also said that Eastern Mediterranean gas should be offered at competitive prices in order to be able to compete with Russian natural gas sold at very cheap prices due to the existing infrastructure and shale gas from the United States.

The Minister also stressed that natural gas was going to function as a bridge fuel in the coming years in order to move from fossil fuels to renewable energy sources (RES), for which Cyprus system was not yet ready.
 
Speaking at the same panel discussion, Ambassador of Israel to Cyprus Sammy Revel referred to the tripartite cooperation of Cyprus, Greece, Israel, saying that that cooperation was not aimed against anyone, but countries believed that if they work together, they could contribute to the security, stability and prosperity of the region.

Responding to a question, he said that cooperation on energy issues with Turkey was not on the table at the moment and said that Israel was prioritizing the EastMed gas pipeline to contribute to energy security and diversification of energy sources in Europe.

He also said that Cyprus and Israel could become important partners in both gas and renewable energy issues, as well as on technology issues by exploiting their huge human resources.

"Now is not the time to relax. Now is the time to proceed with further and more radical reforms" President of the ruling party DISY Averof Neofytou told the Forum and noted that "for entrepreneurship to flourish, startups to scale and the economy to grow, there are no magic ingredients. What we need are prudent, growth oriented policies: Less taxes in a stable and consistent tax system. Incentives to attract private investments and to encourage startups to grow across Europe. Regulatory reforms for smart regulation. Mission oriented policies and actions. Stability and predictability in the business environment".

Above all, he stressed, "as a divided country, for us the most radical reform is reuniting our country".

Source: StockWatch

Speaking at the 10th Economic Ideas Forum organized by the Martens Centre, the official think tank of the European People's Party, and Glafkos Clerides Institute, President Anastasiades louted what has been achieved since 2013 to return the economy back to normalcy.

The President said that the economy was elevated from the "rubbish" investment category and returned to investment grade. A development that, as he said, sends powerful messages.

This, he said, was the result of prudent economic policy. He referred to Cyprus's competitive tax regime, which has become an attractive investment destination. He also referred to the banking system, pointing out that it is now on a more healthy track. The President of the Republic pointed out that the government will continue the effort to address non-performing loans. NPLs have declined, but they remain at a high level. Cyprus, the President said, saw the highest reduction of NPLs in the EU.

Speaking on fiscal issues he said that "last month we were able to issue a 15-year bond at a rate of 2.75% for the first time, clearly showing that macroeconomic stability has returned and trust is restored" .

He added that the government's rational fiscal policy has led to a high nominal and primary budget surplus, noting that the stable and competitive tax and legal status of Cyprus is maintained.

He added that the adoption of specific measures has created economic and investment opportunities, and pointed out that significant investments have been made in a range of sectors, such as ports, marinas, new hotel units, land developments, casino-resort development, investments in tourism, shipping and renewables.

He also pointed out that the discovery of hydrocarbons opens up prospects for the Cypriot economy and for the realization of the vision of turning the Eastern Mediterranean into an energy center that will contribute to stability in the region and to the energy security of Europe.

The Economic Ideas Forum (EIF) is a high-level, award-winning, interactive conference on the most pressing issues facing the economy. Cyprus, which successfully ended its financial assistance programme in 2016, is now one of the fastest growing economies in the Eurozone.

Source: KNEWS

The Cabinet approved new criteria which will see a Cyprus passport being granted in exchange for an investment of €2.5 million, raising it from €2 million, including the purchase of a residency.

Provision were also made for a mandatory donation of €75,000 to the Research and Innovation Foundation and a second €75,000 contribution to the Cyprus Land Development Corporation to be used for affordable housing. In addition, the applicant must have a Cyprus residence permit for at least six months before being naturalised as a Cypriot citizen and has to maintain the required investments for a period of at least 5 (five) years from the date of naturalization, instead of 3 (three) years.

In cases where the investment relates to the purchase of real estate or property as well as in the case of a permanent home-owner, a planning permission, a completion certificate and a bank waiver will be required.

Georgiades said the results of an economic impact study of the scheme was presented before the Cabinet.

He said the scheme was launched in the aftermath of 2013 banking crisis, since then 1,864 citizenships were granted within the framework of the scheme, bringing in €6.6 billion.

“But what emerges from the study, is that trade and investment with a positive contribution to the growth rate of an economy are two different things,” Georgiades said. “The scheme is quite important for the real estate and construction sector, but with little overall impact on the economy,” he added.

The Minister stressed that despite 24% of transactions in the real estate sector were made in the scheme’s framework and the sector has recovered partly because of the scheme, however the economy and its growth rate are not dependent on the specific sector. For the three-year period 2016-2019, the total contribution of the programme to growth is 1.2% GDP out of a total of 13 percentage points, which is the growth rate over the last three years.

The Cabinet decided to alter the scheme’s criteria in order to protect the financial benefits making it more reliable at the same time, said Georgiades. “I believe that the mandatory contribution to the Foundation for Research and Innovation will further encourage the creation of an eco-system of business innovation, while the mandatory contribution to the Cyprus Land Development Corporation is to go to financing housing programs mainly for affordable housing,” said Georgiades.

He said, stricter criteria have also been adopted to ensure due diligence procedures are more stringent and effective, such as the measure of thorough scrutiny of each applicant carried out by an independent international house, the obligation for investors to obtain a Schengen visa and the exclusion of applicants who have been rejected by others Member States with similar schemes.

The changes come after an EU report ‘Investor Citizenship and Residence Schemes in the European Union‘ said Cyprus was not doing enough to ensure transparency to combat illicit and criminal activity.

Cyprus is only one of three EU countries selling passports for investment including Malta and Bulgaria which says it will stop.


Copyright © Cyprus Property News

THE INTERIOR Ministry has asked the House Finance Committee to release €3.6 million, part of which will go to pay for services to clear a backlog of cases at the Land and Surveys Department.

Of this €400,000 will pay for private land surveyors to tackle a pile of cases.

According to Philenews, thousands of applications relating to boundary disputes, access applications, land developments and the issuing of title deeds have been pending for many years, leading to long waits and the loss of state revenue.

To deal with the problem the Interior Ministry is contracting services from the private sector and paying employees overtime.

The 2019 budget provides for €700,000 for overtime pay at the department as follows: €300,000 for overtime allowances for staff working on title deeds, computerization of the archives and land surveys.

€200,000 for overtime pay to cover current and pending cases relating to the issue of title deeds of apartments, plots of land, houses in development projects and upgrading of the land information system and the implementation of other current IT projects.

€200,000 for overtime pay for contract employees who help land surveyors.

The ministry is also asking for funds to buy services from the private sector as follows:

€285,000 to collect information for land appraisals (this is the first-time private evaluators will be involved). The value of an estimated 2 million properties are to be re-assessed. The procedure is underway and should be completed by the end of June.

€522,000 for new aerial photography. €80,000 to improve the department’s online platform and implement changes resulting from the European INSPIRE directive (establishing an infrastructure for spatial information in Europe.)

Source:  Cyprus Properties News

Deputy Minister of Tourism Savvas Perdios told the Cyprus News Agency (CNA) on Wednesday that the Russian market is expected to boost the tourist industry of Cyprus this summer.

Perdios is currently in Moscow holding meetings in the framework of the Moscow International Travel & Tourism Exhibition.

In his statements to CNA, he noted that it seems that this year the tourist flow from Russia will be the same as last year, adding that this will give the tourist industry a boost compared to other markets from where indications are negative, as Germany and the UK.

He went on to say that arrivals from Russia were 800 thousand last year.

Moreover, Perdios said that Russian tour operators seem to be ready to invest, to a smaller extent, in winter tourist programmes. He also said that Russian tour operators have begun to represent other Russian speaking countries as Belarus, Kazakhstan and Uzbekistan, as well as Baltic countries.

As regards the British market, the Deputy Minister of Tourism said that they will be waiting to see developments on Brexit, adding that this issue is related to the exchange rate for the sterling.

This will be a difficult year, he added, noting however that we should focus on the opportunities.

Perdios also said that Cyprus should seek to attract tourists from other markets as well, and not only from traditional markets as the UK,

Source: Stockwatch

Cyprus said Tuesday it has suspended all flight operations of all Boeing Model 737-8 MAX and 737-9 MAX aeroplanes inside its airspace.

The ban came to force at 9pm.

The island said it was complying with an EU-wide suspension issued by the European Union Aviation Safety Agency after the accident involving an Ethiopian Airlines plane of the same type.

EASA has also suspended all commercial flights involving the models performed by third-country operators into, within or out of the EU.