European lenders on Tuesday played down Greek hopes of a swift end to negotiations on an aid agreement and warned talks must speed up before the country runs out of cash.

A sober outlook from Brussels and Berlin contrasted sharply with vigorous optimism displayed in Athens, where top officials from the new leftist government made a series of public appearances to promise a deal was just days away.

Finance Minister Yanis Varoufakis told a talk show overnight that a deal could arrive in a week, while Prime Minister Alexis Tsipras had earlier said talks were in their “final stretch”.

The comments helped push Greek stocks up nearly 2 percent on Tuesday, but euro zone policymakers said talks were not moving nearly as fast as needed to clinch a deal in a short time.

“More time and effort is needed to bridge the gaps on the remaining open issues. We consider that progress is being made, albeit at a slow pace,” European Commission spokesman Margaritis Schinas told a daily news briefing.

The Commission also denied a Greek newspaper report that its chief, Jean-Claude Juncker, had offered a compromise proposal to break the impasse in talks, which set a lower primary surplus target for Athens in return for tax reforms and tax hikes.

After a meeting in Berlin, the leaders of Germany and France said talks between Greece and its creditors must be accelerated to free up further loans to Athens.

“I’d say the talks need to speed up, rather than that they are going too fast, and we hope the relevant forum – the Brussels (negotiating) Group – can make clear progress because the agreement in February was that a programme should be set up by the end of May,” German Chancellor Angela Merkel told a news conference.

French President Francois Hollande agreed the talks with Greece needed to be “accelerated”, adding: “We all have the same stance which is that Greece must stay in the euro zone.”

Both leaders will meet Tsipras at an EU summit in Riga this week, where Greece is pushing for a series of bilateral meetings on the sidelines to help broker a deal before cash runs out.

Euro zone leaders have said any progress made at the Riga summit cannot replace ongoing talks at the technical level between mid-level officials from both sides.

JUNE DEADLINE

After staging a small economic recovery last year, Greece has returned to a full-blown crisis since Tsipras’s leftist government took power in January promising to end austerity and unpopular bailout programmes.

Without access to debt markets or aid, the government has found itself locked in difficult negotiations as cash coffers run dry. Athens is expected to scrape through payments to government workers and pensioners this month, but payments of 1.5 billion euros to the IMF next month will pose a much bigger challenge.

A payment of about 750 million euros to the IMF last week was only made by emptying a holding account at the Fund.

Labour Minister Panos Skourletis pointed to June 5 – when Greece’s next loan payment to the IMF falls due – as the next crunch point for the cash-strapped country.

“There’s a deadline, which is June 5,” he told Greek television. “We all know that if there is no solution, let’s say until then, in relation to funding, things will be difficult.”

But like the rest of the government, he remained optimistic a cash-for-reform deal would be struck “in the coming days”.

Talks with the European Union and International Monetary Fund lenders have dragged on for the past four months. A successful conclusion would release of around 7.2 billion euros ($8.1 billion) in aid, but talks have stumbled over pension and labour reform proposed by the creditors and resisted by Athens.

“We believe that the pension system must be reformed but cutting pensions is not reform,” Varoufakis told Greek television. “We want a surgical intervention in the pensions system, not a butchering.”

He blamed the lenders for turning down Greece’s proposals and said talks should have ended in mid-March. “The comprehensive review was like a cat chasing its tail,” he said.

As the talks drag on and uncertainty over Greece’s future in the single currency bloc grows, a new poll published late on Monday showed most Greeks are unhappy with the government’s negotiating strategy with lenders.

The University of Macedonia survey carried out over May 13-15 found 41 per cent of Greeks believe the government strategy “is not stable and is therefore sometimes right and sometimes wrong.” The number who felt it was right fell to 35 per cent from 72 per cent in February.

As many as 61 per cent believe the government should water down its pre-election pledges given the circumstances, the poll said, compared with 35 per cent who want them seen through.

By Lefteris Papadimas and Jan Strupczewski

The Public Debt Management Office (PDMO) on Thursday announced the sale of €50 million of 30-day treasury bills at a weighted average rate of 1.81 per cent.

In a statement, the PDMO said total offers received were €76.1 million, of which €70 million were made in a competitive bidding process, and €6.1 million were non-competitive bids.

Offers of €50 million were accepted, according to the statement, €43.84 million in competitive bids and €6.16 million in non-competitive ones.

Return to investors on this short-term debt ranged from 1.94 to 1.70 per cent, for a weighted average of 1.81 per cent.

Properties sold in Cyprus in March increased by 31% compared with March 2014 with sales improving in all districts except for Famagusta.

A total of 452 contracts for the sale of commercial and residential properties and plots of land were deposited at Land Registry offices across Cyprus during March, recording an increase of 31% compared to the 344 contracts deposited during the same period in 2014.

Of those 450 contracts 411 were deposited on behalf of domestic buyers, while 41 were deposited by foreign buyers. Sales increased in all districts except for Famagusta, where they recorded a 29% drop. Overall sales during the first quarter of 2015 are up 16% year-on-year.

Domestic sales in March increased by 70% (25% year-on-year). Sales to foreigners, with reports of Lebanese buyers being duped, the devaluation of the rouble and reports of Chinese buyers being ripped-off appearing in the Greek-language media, dropped by 60% year-on-year. During the first quarter of 2015, sales to foreign buyers dropped 7% compared to the first quarter of 2014. 

Cyprus, Greece, and Egypt yesterday pledged to increase their political and economic cooperation to the benefit of their people and the wider region.

In a tripartite summit that was received extensive media coverage throughout the day, Cyprus President Nicos Anastasiades, Greek Prime Minister Alexis Tsipras, and Egyptian Abdel Fatah al-Sisi signed the Nicosia Declaration, a three-way framework agreement that reaffirmed that the trilateral dialogue and cooperation promotes peace, stability, security and prosperity in the Eastern Mediterranean.

On energy co-operation, Anastasiades said the leaders reaffirmed a shared conviction that the discovery of significant hydrocarbons reserves can and must act as a catalyst for broader co-operation on a regional level, contributing to regional stability, highlighting however the adherence to international law. In his own remarks, Egyptian President Abdel Fatah al-Sisi said the tripartite agreements are aimed at making the participating nations the natural gateway for boosting cooperation between Africa and Europe.

The leaders further underlined the ecumenical nature of the UN Convention on the Law of the Sea (UCLOS) and decided to expedite their negotiations for the delimitation of the remaining of their maritime zones.

Referring to the Cyprus problem, the three leaders called for a just, comprehensive and viable solution that would re-unite the island according to international law and the UNSC resolutions, as this would not only benefit the people of Cyprus, but of the wider region as well.

Commenting on migration, they stressed that the increase of migration flows constitutes a challenge to all three countries, while they agreed to intensify their actions to avert the loss of lives and sea and deal with the source of the human tragedy. 

According to the joint declaration, the three countries agreed to step up co-operation on counter-terrorism, defence, and security.

The three countries further agreed to explore all possibilities to further enhance the synergies among our economies, with a view to create a more positive economic environment for growth, to tackle the challenges of a rapidly changing international economic situation and to jointly benefit from important opportunities arising in our region.

They also agreed to continue working in the field of tourism with a view to facilitate and enhance co-operation on joint projects, including the development of joint packages and cruises, the sea connection between the three countries — both as respects cargo and passengers — and initiating co-operation on maritime education and training.

Greek Prime Minister Alexis Tsipras said the three countries decided to extend their co-operation within the international organisations of which they are members. Expressing satisfaction over the outcome of the Nicosia talks, Tsipras extended an invitation to his counterparts to follow up with a third three-way summit in Athens.

Speaking on Sigma Main Evening News yesterday, Cyprus Foreign Minister Ioannis Kasoulides said that the agreements signed as part of the Nicosia Declaration between Cyprus, Greece and Egypt are substantive, and already the Cyprus and Egypt Communication Ministers are examining the shipping connection between the two countries. He also noted that this cooperation bring Cyprus closer to the Arab world and Egypt closer to the EU.

Cyprus is preparing its second bond issue in less than a year in an effort to rebuild its finances following a bailout of its banking system in 2013.

The country has hired a group of banks to arrange a call with investors, according to reports on Monday. A yield in the lower 4% area was suggested for the planned bond which will mature in May 2022.

The banks working on the deal, Barclays, HSBC, Morgan Stanley and Société Générale, are now taking initial offers of interest, with the deal expected to be launched later today. Market participants now expect Cyprus to target an issue size of around €1 billion.

The gradual improvement of Cyprus’ finances forms a sharp contrast with Greece, which is seen as running out of time to secure new funds amid strained talks with European partners. A Greek exit from the euro would hit Cyprus particularly hard, Fitch Ratings warned on Friday, despite upgrading the Cyprus economy.

Cyprus raised €750 million in June 2014 from a five-year government bond, paying a yield of 4.85% and attracting around €2 billion of orders.

The country is likely to attract solid demand for a new bond, particularly while investors are starved of yields from Europe’s pricey bond market, which is pumped up by the European Central Bank’s stimulus package.

Eurozone finance ministers delivered a stark warning to Greece on Friday that its leftist government will get no more aid until it agrees a complete economic reform plan, as Athens lurches closer to bankruptcy.

After a tough morning of talks with Greek Finance Minister Yanis Varoufakis, the chairman of the Eurogroup of finance ministers, Jeroen Dijsselbloem, slammed the door on a request for early cash in return for partial reforms.

He also said a remaining 7.2 billion euros in frozen bailout funds would no longer be available after June, and Greece’s creditors would not talk about longer term funding and debt relief until Athens concluded a full interim agreement.

“A comprehensive and detailed list of reforms is needed,” Dijsselbloem told a news conference following a meeting in Riga. “A comprehensive deal is necessary before any disbursement can take place … We are all aware that time is running out.”

Greek Prime Minister Alexis Tsipras said after meeting German Chancellor Angela Merkel in Brussels on Thursday he hoped for an agreement by the end of this month.

But Dijsselbloem said finance ministers would review progress again only on May 11 – a day before Greece has to make a crucial and uncertain 750 million euro payment to the International Monetary Fund.

European Central Bank President Mario Draghi said the ECB would go on allowing emergency lending to Greek banks as long as they were assessed as solvent. But he cautioned that soaring Greek government bond yields were diminishing the value of the collateral that the banks present to get funds.

Facing a wave of deposit outflows, the banks are staying afloat with 75.4 billion euros in emergency liquidity assistance from the Greek central bank. But criticism of the lifeline is growing inside the ECB, central bank sources say, and it would be in doubt if Greece missed a payment to its creditors.

European Economics Commissioner Pierre Moscovici said despite some progress in recent days, international creditors were still nowhere near an agreement with Athens.

“Our message today is very clear: We need to accelerate, we need to accelerate from today … there is no other choice if we want to reach the goal that everyone shares, which is a stable, prosperous Greece anchored in the euro zone,” Moscovici said.

Varoufakis sought to play down the differences, saying ministers had agreed to speed up the negotiations, which have also been delayed by Greece’s insistence that EU/ECB/IMF teams avoid lengthy stays in Athens for fear of intensifying the popular backlash against the hated “troika”.

“We agreed that an agreement will be difficult but it will happen and it will happen quickly because that is the only option we have,” he told a separate news conference.

CONCESSIONS

Before the tense meeting he had offered some concessions in an effort to secure new funding before Athens runs out of money, saying in a blog post he was open to some privatisations and to a commission to supervise tax collection that would be independent of the government.

But he rejected any more wage or pension cuts and said creditors must agree on a realistic target for the primary budget surplus before debt service.

“Our government is eager to rationalize the pension system (for example, by limiting early retirement), proceed with partial privatisation of public assets, … create a fully independent tax commission,” Varoufakis said.

Greek officials say they are aiming for a primary surplus of 1.2 to 1.5 per cent of gross domestic product this year, well below the goals of 3 per cent in 2015 and 4.5 per cent in 2016 set in Greece’s 2012 EU/IMF bailout programme.

French Finance Minister Michel Sapin told Reuters there was room for manoeuvre on Greece’s primary surplus, “as long as it remains positive.”

Exactly when Greece’s cash reserves run out is unclear, but sources familiar with the matter said Athens would struggle to meet the IMF payment, and it was not certain to scrape together a targeted 2.5 billion euros from state entities’ idle cash.

Merkel appeared to send a signal of goodwill after her meeting with Tsipras on Thursday, telling reporters “everything must be undertaken to prevent” Athens running out of cash.

But the tone of finance ministers was harsher, in a clear effort to dramatise the stakes and force the novice Greek government to accept unpopular measures it had resisted such as pension and labour market reforms.

Negotiations have been largely fruitless since radical leftists won power in Athens in January on a promise to reverse austerity and renegotiate Greece’s 240-billion euro bailout package.

Reflecting the general mood, Slovak Finance Minister Peter Kazimir confessed to being “just a bit tired” of the Greek saga, and said the end of June was now the final date for a deal.

EUROPE SAFER

The impact of a potential Greek default is the biggest risk to the euro zone’s economic recovery after a long crisis from which the 19-nation currency area is finally emerging.

Unlike at the height of the euro zone crisis in 2011-12, economists believe the euro zone is far better placed to withstand any Greek default because the currency bloc has its own bailout fund, support from the European Central Bank and a banking union that can protect banks from crisis fallout.

“The risk of contagion exists, but it is much lower than it was before,” Standard & Poor’s Chief Economist Jean-Michel Six told Italian financial daily Il Sole 24 Ore.

The lack of progress is starting to hurt Tsipras’ popularity and that of his government. Varoufakis warned in his blog against pushing Greece too hard, saying the Greek people would not support more spending cuts after one of the deepest recessions in Europe since the 1950s.

By Ingrid Melander and Lefteris Papadimas (Cyprus Mail)

Bank of Cyprus chief executive officer John Hourican has submitted his resignation, citing personal reasons, the bank said today. He has given four months’ notice to give the bank time to find a replacement.

“The board of directors of Bank of Cyprus Public Company Ltd announces that the group chief executive officer, John Patrick Hourican, has submitted his notice of resignation, effective in four months,” Bank of Cyprus said in statement. As per his employment contract, Hourican has a contractual notice period of four months but he remains at the disposal of the board of directors. Hourican’s decision to leave the group is a personal one and he intends to relocate to his home country, Ireland”.

Hourican joined the bank in October 2013, seven months after Cyprus’s banking crisis and chaotic bailout. He worked at the Royal Bank of Scotland until February 2013. He played a key role in Bank of Cyprus’s €1bn capital issue last August which attracted US investor Wilbur Ross. Hourican also oversaw the relisting of the bank at the Cyprus Stock Exchange and Athens Exchange in December. Its share had been suspended in March 2013.

Hourican is also considered responsible for arranging the appointment of former Deutsche Bank boss Josef Ackermann as chairman of the bank.

The board “will discuss in due course issues arising from the resignation,” including his succession, the bank statement said. “The Bank’s strategy will continue to be implemented by the management team, under the guidance of the board of directors”.

In a separate statement, Bank of Cyprus said that Hourican’s decision to step down from his position has to do with his intention “to spend more time with his young family” and not “to take up another role elsewhere.”

“I have been very proud to be part of the Bank of Cyprus family during this period and to have led this chapter in the bank’s rehabilitation,” Hourican said in a statement. “It has been an honour to work with so many talented people and to play my part in laying the foundations for a better bank to serve the Cypriot economy into the future”.

Ackermann expressed his thanks to Hourican as well as his “appreciation for the remarkable progress achieved” under his leadership.

“He leaves behind a strong management team and a bank in a steadily improving financial shape, with restored employee, investor and customer confidence,” Ackermann said. “We wish him all the best in his future endeavours and we are looking forward to continuing to work with him in the months ahead.”

The lender said that “on his departure from the bank, Hourican will have spent nearly two years in Cyprus and led the Bank during an extraordinarily difficult chapter in its history. Today the bank is much better positioned to serve its customers, to offer opportunity to its employees and to create returns for its shareholders”.

Under the terms of Cyprus’s bailout, Bank of Cyprus merged with the failed lender Cyprus Popular Bank, also known as Laiki. Depositors at Bank of Cyprus saw almost half of their uninsured deposits turned into equity while those at Laiki lost all their deposits in excess of €100,000.

The lender’s share at the Cyprus Stock Exchange opened at €0.213 by 12:32 it fell to €0.208, 2.8 per cent compared with yesterday’s closing.

According to a person familiar with the situation who spoke to the Cyprus Business Mail on condition of anonymity, the lender is expected to go “head-hunting” in search for a replacement for the Irishman.

Under Hourican, the bank, which last year saw its non-performing loan ratio rise to 60 per cent of its overall loan portfolio and posted a €261m after tax loss, followed a “shrink to strength strategy,” which included the divestment of its non-core business abroad. These include its operations in Ukraine, its stake in Banca Transilvania, loans in Serbia, and the majority of Laiki’s loan portfolio in the UK. The disposal of its Russian unit Uniastrum Bank, a top priority of the bank, is still pending.

The lender managed to repay to the European Central Bank more than €2.5bn in emergency liquidity it inherited from Laiki.

The Irish banker did not fear controversy and with his no-nonsense approach he sought to tackle the lender’s non-performing loans by pressuring major Cypriot developers not servicing their loans to sell assets to pay their dues. He did not hesitate to clash with Ackermann’s predecessor, Christis Hassapis, over the bank’s strategy.

In February, Hourican drew fire from opposition parties over comments he made in an internal email that was leaked. In the email he criticised politicians for the “bemusing politicisation of the insolvency law”. Days later, a car owned by the bank and used by the Hourcan family, was destroyed by fire. Police suspected an arson attack. Holders of capital securities who saw their investment wiped out in March 2013 were angry with Hourican’s decision not to compensate them for their losses. They organised demonstrations outside the BoC headquarters on several occasions, which sometimes turned violent.

“Hourican couldn’t care less about criticism,” the source said and acknowledged that the timing of the decision — days after the parliament passed the insolvency legislation and ended the suspension of the foreclosures law, which practically allows Cyprus’s economic reform programme to continue– “was very bad”.

The funding from the ECB in the form of emergency liquidity assistance “has been dramatically reduced, and, importantly, €1bn of fresh equity has been raised to ensure that the bank is well capitalized amongst its European peers,” the lender said. “These initiatives will continue under the strong management team in place under the guidance of the new board of directors for the benefit of the bank’s depositors and borrowers and of the Cypriot economy in general”.

By Stelios Orphanides

By George Psyllides

AFTER weeks of heated debates, parliament on Saturday approved the insolvency framework, paving the way for resumption of the island’s bailout adjustment programme.

The framework passed with the 33 votes of ruling DISY, as well as DIKO and EDEK.

AKEL, EVROKO, the Green party, the Citizens’ Alliance, and independent MP Zaharias Koulias voted against.

It was made possible after DISY agreed to support two EDEK amendments concerning protection of non-viable borrowers and bank surcharges and so-called unfair terms included in loan agreements.

The vote was preceded by intense backstage trading.

“From the onset, EDEK’s intention was to protect our vulnerable fellow citizens,” MP Nicos Nicolaides said.

He added that the amendments created the conditions for parliament to fulfil its role and objective, to protect vulnerable people and support the financial system.

Approval of the framework came after weeks of discussions, which saw the derailment of the island’s adjustment programme.

The delay in passing the insolvency framework, seen as a safety net for vulnerable groups against property repossessions, had prompted the opposition to suspend the foreclosures law.

The suspension caused the interruption of the island’s bailout programme since having effective repossession legislation in place had been included in the terms.

The International Monetary Fund has withheld some €85m pending compliance.

The interruption has also made Cyprus ineligible for the European Central Bank’s quantitative easing programme.

Getting the programme back on track would allow €500m of Cypriot bonds to be bought by the ECB.

On Friday, it also emerged that the ECB had warned that it may reconsider its decision to continue accepting Cypriot securities as collateral for monetary policy operations if Cyprus delayed implementation of the foreclosures legislation further.

As long as the long-term sovereign rating of the Republic is below BBB-, the ECB exceptionally accepts Cypriot securities as collateral in exchange for liquidity through the Eurosystem’s monetary policy operations, under the condition that the island complies with the programme and has a positive evaluation.

DISY chief Averof Neophytou suggested that the approval of the framework would allow Cyprus to tap international markets with favourable interest rates, not seen even during the heydays of the economy.

“If everything goes well today, with the responsibility displayed by opposition parties, and the mild tones, we will succeed in tapping the markets in a few weeks,” Neophytou said.

His DIKO counterpart stressed in a tweet that the framework protected the people from the banks.

“Those who vote against it, not us, ought to explain themselves to the people,” Nicolas Papadopoulos said.

However, his view was not shared by main opposition AKEL.

AKEL leader Andros Kyprianou said it fell short of its objective.

“In our view there is no safety net to protect the people,” Kyprianou said.

He said he had no doubt that banks would appeal the few positive provisions included in the legislation, whose aim was to serve the banks’ interests, ignoring the consequences on the people.

Kyprianou also warned that foreign funds, including some with Turkish interests, would swoop in and buy Cypriot properties.

The response came from DISY MP Prodromos Prodromou who pointed out that the current system offered no protection whatsoever.

Prodromou also suggested that the delay in passing the legislation only worsened the situation for crisis-stricken individuals who had no options.

“Has anyone measured how bad it has become. The figures will scare you,” he said.

To those who sought to put all the blame and the burden on banks, Prodromou pointed out that following the March 2013 bailout, the shareholders were people whose deposits had been seized and the taxpayer, in the case of co-ops.

“These people put in money without being asked so that the Central Co-operative Bank could function,” he said.

Under the bailout, Cyprus had to shut down its second-biggest lender, Laiki Bank. Bank of Cyprus, the biggest, seized almost half of deposits over €100,000 to recapitalise. It gave equity in return.

Co-ops were recapitalised with €1.5bn in taxpayer money and are now owned by the state.

“We will monitor enforcement and intervene if necessary,” Prodromou said.

The first exclusive villas at the Limassol Marina have been delivered to their owners. The Peninsula Villas are the only homes of their kind in the Mediterranean. Surrounded by the sea, they offer private berths attached to their garden or direct access to the beach as part of an integrated marina development. They benefit from uninterrupted sea views and come complete with their own swimming pool, garden and parking in the heart of the most exciting new destination in the region.

The Limassol Marina spa and fitness club, dining, shopping and cultural facilities are all fully operational and situated just moments away from the villas. The variety of restaurants, cafés, fashion boutiques and convenience stores, including a supermarket, pharmacy, car rental office, chandlery and yachting agents, are also open throughout the year. This is the place to enjoy a lifestyle uniquely shaped by living on the sea in the most vibrant town of Cyprus.

To date, 40% of the first phase of the Limassol Marina Peninsula Villas has been sold. Starting from €1.5 million, prices for villas include the berth(s) attached to the property. Yiorgos Georghiou, Sales Director at Limassol Marina, commented on this next phase of development: “These villas are incredibly rare, making them a sound investment. They combine our buyers’ passion for the sea with their desire for a first or second home in Cyprus, just a stroll away from the city centre.”

Residents will also be able to step out of their villa and onto the sand, with full use of a beach. With or without a boat, they will be able to enjoy a home quite literally “on the sea”.

Limassol Marina is continuing to create waves in the Eastern Mediterranean. The first superyacht marina in Cyprus, it has already established itself as one of the most attractive and sought-after projects across Europe. Sales of the luxury apartments have surpassed 85% and contracts in excess of €170 million have already been signed for the luxury residences on the sea.

Data released by the Cyprus Statistical Service indicates that the construction sector saw its output drop almost 19% in the fourth quarter of 2014 year-on-year, coupled with a marginal 0.1% increase in producer prices.

Producer prices in construction fell 0.9% in the fourth quarter of 2014 compared to Q3, while output in construction during 2014 fell 17% compared to 2013. The number of buildings dropped by 20% and civil engineering projects were reduced by 8.4% over the same period.

In the fourth quarter of last year, the construction of both buildings and civil engineering projects fell almost 19% year-on-year. Producer prices in construction in 2014 fell 1.4% compared to the year before, while building projects saw their prices drop 0.6% in 2014 and those for civil engineering projects fell 3.1%. In the fourth quarter of 2014, prices for buildings fell an annual 0.2% while those for civil engineer projects rose 0.7% compared to a year before.