Day: March 8, 2023

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The Foreign Office (FCDO) has reassured the UK Cypriot community that the UK Government had had ‘no contact’ with a small group of UK parliamentarians that paid a visit to the occupied northern part of Cyprus a few weeks ago, pointing out that the UK recognises only one Cypriot state.

In response to a letter by the National Federation of Cypriots in the UK’s President Christos Karaolis highlighting the controversial visit, an official from the FCDO’s relevant department added that the group had not asked for official guidance or advice prior to their ‘private, unofficial visit’.

The response letter also referenced the official FCDO travel advice for British nationals which states that no full consular support could be provided to those visiting the areas in the north of the island which are not under the effective control of the Cypriot government.

‘I would like to reiterate that the UK recognises only one Cypriot state – the Republic of Cyprus – and only one government as the sole legitimate government,’ added the FCDO official.

They also noted that Prime Minister Rishi Sunak wrote to President Nikos Christodoulides to congratulate him on his election and to reaffirm the UK’s support for the UN-led process towards ‘a comprehensive, just and lasting Cyprus Settlement – on the basis of a bi-zonal, bi-communal federation with political equality.’

Source Cyprus News Agency

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The investigations of the Police Electronic Crime Sub-Division continue at an intensive pace in relation to the case of spreading fake news, which was reported to the Police on Monday afternoon by President of the House of Representatives, Annita Demetriou.

Demetriou made the complaint following a post on a specific social media page, which referred to a close relative of hers and his involvement in a criminal case, with hints and accusations of a cover-up by the House President.

In statements to CNA on Tuesday, Police spokesperson Christos Andreou said that the Electronic Crime Sub-Division continues investigations in order to identify the administrator or administrators of the page in question, who, he noted, to begin with appear to be anonymous.

At the same time, Andreou confirmed that in recent days the police have been taking increased security measures for Demetriou and her close family, clarifying however that the measures have nothing to do with the content of the post.

He added that the increased police presence is related to security measures and not the post on the specific page, ‘which is completely unsubstantiated, false and in no way corresponds to reality.

Source Cyprus News Agency

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I would like to thank Capital Link for organizing the Annual Cyprus Maritime Forum and for offering me the opportunity to talk about current economic issues. I will discuss inflation developments by contrasting the euro area with the US, in order to give a clearer focus on the dynamics and differences of the economic trends and inflation. I will also talk about the Cyprus economy, focusing on the reasons that kept our economy strong and the factors that will help safeguard its future path.

Overview of international and euro area economic developments

Let me start with contrasting economic and inflation developments in the US and the euro area. Even though both economies were hit by rising inflation, the factors behind it have been different. In the United States, demand factors have been the main determinants of the upward inflation trend, while in the euro area, price increases were, initially, mostly driven by the supply shock caused by the energy crisis.

The post-covid demand recovery in the US was faster and stronger than in the euro area. As a result, the Federal Reserve moved earlier with actions to curb the accelerating inflationary pressures and in particular it started raising interest rates in March 2022. By contrast, the euro area was more exposed to the energy crisis than the US, given its proximity and higher energy dependence to Russia and especially Russian gas. As long as inflation is largely caused by supply side factors such as energy prices, interest rate hikes cannot address the problem. Hence the ECB reacted when the inflation rate in the projected horizon breached its 2% target and saw signs of infiltration of inflation into demand side factors of the economy. Consequently, the ECB started raising interest rates in July 2022. However, it had started normalising its monetary policy much earlier in 2022 by terminating the PEPP and APP bond purchases.

The second main difference relates to the labour market dynamics of the two economies. The US labour market exhibited at a relatively early stage, a greater degree of tightness, evidenced by stronger wage growth in the US than in the euro area. This higher degree of US labour market tightness was another key factor in explaining the medium-term inflationary pressures.

By contrast, in the euro area, the pick-up in wage growth is relatively a more recent phenomenon. Characteristically, US labour costs increased by 5.8% in 2022, and almost 12% in the two year period 2020-2022. In the euro area, data until the third quarter of 2022 show that labour costs have increased by 2.8%, with a cumulative growth of 7% over the same period of 2020-2022.

As regards other economic developments specific to the euro area, despite the recent favourable GDP outturns, Russia’s unjustified war against Ukraine and its people, continues to act as a headwind to euro area growth. Whilst supply chain bottlenecks are gradually easing and the supply of gas has become more secure, inflationary pressures remain elevated. Specifically, following a peak of headline inflation at 10.6% in October 2022, in February this year it still stands at 8.5%. At the same time, core inflation, which excludes the volatile items of energy and food and therefore captures demand pull forces of inflation, continues on an upward trajectory moving from 5.0% in October 2022 to 5.6% in February this year. In addition, wages continue to grow fast, supported by robust labour markets, with some catch-up to high inflation becoming the main theme in wage negotiations.

In this setting of high headline and core inflation, monetary policymakers must ensure that inflation does not become entrenched. Therefore, from an expansionary monetary policy up until the end of 2021, the ECB has moved through the neutral range and continued moving into the restrictive monetary policy interest rate range, currently at 2,5%. At the last ECB Governing Council meeting beginning of February, we reiterated the need to stay the course in raising interest rates at a steady pace and keeping them at restrictive levels to ensure a timely return of inflation to our two per cent medium-term target. Keeping interest rates at restrictive levels will over time reduce inflation and will guard against the risk of inflation expectations becoming de-anchored, which, if it happens, it would be a very costly outcome for the euro area economies and for both businesses and households. At the same time, fiscal support measures to shield the economy from the impact of high energy prices should be temporary, targeted and tailored to the vulnerable in order to avoid boosting inflationary pressures. In particular, as the energy crisis becomes less acute, it is important to start converting these broad measures to targeted ones and in a concerted manner. Any fiscal expansion falling short of these principles is likely to increase medium-term inflationary pressures, which would necessitate a stronger monetary policy response through higher interest rates.

Euro area projections

The euro aoof the rea latest available projections of December 2022, show that the annual average real GDP growth is anticipated to slow down significantly from 3.5% in 2022 to 0.5% this year, before rebounding to 1.9% in 2024 and 1.8% in 2025.

Average annual inflation is expected to fall, from an average of 8.4% last year to 6.3% this year, with inflation projected to fall from 10% in the last quarter of 2022 to 3.6% in the last quarter of 2023. Headline Inflation is then expected to fall to an average of 3.4% in 2024 and 2.3% in 2025. The reduction in headline inflation over the projection horizon, reflects strong energy-related downward base effects throughout the course of 2023, the gradual impact of the normalisation of the ECB’s monetary policy which started early in 2022, the weaker economic growth outlook and the assumed decline in energy and food commodity prices, in line with futures prices. The underlying assumption in all this is that long-term inflation expectations will continue to remain anchored.

The Cyprus economy

As regards Cyprus, the economy showed notable resilience in 2022, recording significant growth of 5,6%, despite the negative international environment. This is in part due to the higher than expected activity in the tourism industry, the non-dependence of the Cypriot economy on Russian gas, as well as the reality that the Cypriot banking sector has very limited exposure to the Russian economy and therefore has not been affected by the sanctions on Russia. In particular, according to the latest available data, deposits from Russian Federation citizens amount to only 2,17% of total deposits of the Cyprus banking sector at the end of January 2023 , while loans amount to only 0,2% of total loans.

Economic growth in Cyprus was supported by new lending by the Cyprus banking sector and by foreign direct investment. For example, largely owing to the enactment of new incentives, including the facilitation of a fast-tract process for incoming firms, a large number of high value-adding foreign companies have been attracted to Cyprus. These incentives are offered in the context of the so-called ‘international headquartering’ policy.

According to the latest Central Bank of Cyprus forecasts of December 2022, the growth of the Cypriot economy is expected at 2,5% this year which compares well to the euro area average of 0,5%. Inflation is expected to decelerate in 2023, levelling at 3.3%, from 8.1% in 2022.

Foreign investment in Cyprus, as I mentioned before, constitutes a significant driver for development. In recent years, major multinational firms in the Information, Communication and Technology industry (ICT), have relocated or expanded their activities in Cyprus, supporting Cypriot GDP and reinforcing the vision to transform Cyprus into an emerging technology hub in the Mediterranean. Cyprus’ importance as a foreign investment hub is also reflected in the Greenfield FDI Performance Index[1], created by FDI Intelligence, according to which in 2021, Cyprus was ranked in 18th place out of 84 countries included in this index (climbing by 50 places compared to 2020).

Undoubtedly, the shipping sector is another important pillar of Cyprus’ economic success. Limassol, Cyprus’ maritime capital, is the home of influential names in the shipping industry, which boosted the country to the top ranks of the sector. Indicatively, Cyprus is the largest third-party ship management centre in the European Union, one of the largest in the world[2] and is primed for further growth. The importance of the sector is evident in the balance of payments data where it ranks third in terms of its contribution to the total value of exports of services at 19% for 2021, after the financial services and ICT sectors, with contributions of 32% and 23%, respectively.

Concluding remarks

Let me conclude by underlining the challenges for policy makers The global inflation dynamics are currently being addressed by central banks, but the fight is far from over. Monetary policy is being utilised at a different pace in different regions, due to the differences in economic fundamentals.

However, we should not forget that other policies also play a role. For instance, state support should avoid horizontal measures and instead use targeted fiscal measures, which focus on the economically vulnerable, in order to support social cohesion but avoid undermining monetary policy measures against inflation.

Finally, regarding the shipping sector, it is and will continue to be the backbone of the global economy. In fact, when talking about the importance of shipping, I cannot avoid the temptation of referring to the British writer Arthur C. Clarke, who said and I quote ‘How inappropriate to call this planet, Earth when it is quite clearly Ocean’. Cyprus, a tiny spot on the planet, continues to strengthen its role in the shipping sector. As a hub for ship management, ship owning and vessel chartering services, it aims to maintain and enhance further the competitiveness and prospects of the sector.

Source Cyprus News Agency

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An international conference entitled Financial Literacy and Education in Cyprus Challenges, Lessons from Other Countries and the Way Forward, which will take place on March 10, 2023, in Limassol, is organised by the Central Bank of Cyprus (CBC).

In a press release CBC said that the conference is organised in the context of the coordinating role undertaken by the CBC for the promotion of Financial Literacy and Financial Education in Cyprus.

The event is also part of the Global Money Week international action of the Organization for Economic Cooperation and Development with the Central Bank of Cyprus as the implementing body.

It is added that two keynote sessions are to be held on the day of the event. The morning session is addressed to members of the academic community and will focus on research results on the importance of financial literacy both in Cyprus and globally.

During the afternoon session, which is open to a wider audience and the media, the keynote speaker will be Dr. Annamaria Lusardi. Distinguished academic, professor of Economics and Accounting at the George Washington University School of Business (GWSB), Dr. Lusardi is the founder and Academic Director of the Global Financial Literacy Excellence Center. The afternoon session will begin with an address from the Governor of CBC, Constantinos Herodotou.

Source Cyprus News Agency

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Training sessions will take place in two major public hospitals in Nicosia, starting today, as part of the accreditation process that the SHSO (OKYpY) has initiated, under the guidance of Canada Accreditation.

During a press conference at the SHSO headquarters today, the Organisation announced that the staff at the Nicosia General Hospital and Makarios III Hospital, will be trained to incorporate 19 and 17 international standards, respectively.

On behalf of Accreditation Canada, Yuliya Shcherbina, said that the training will kick off with orientation sessions, that will provide both hospitals with the knowledge about international standards of excellence, team work and assessment methodologies. She added that both hospitals will also have a chance to perform a self- assessment process and work on improvement plans under the guidance of Accreditation Canada.

She added that evaluations of healthcare services will be performed, against the standards of excellence, leading to a report detailing the areas of improvement, as well as the areas of success. ‘Accreditation is a continuous quality improvement process and we are very pleased that SHSO decided to embark on this journey and we will do the best to guide and support through the entire process and help reach the goals,’ she concluded.

OKYpY head of Quality Procedures Unit, Nicolas Nicolaou, said that the training aims to enable the incorporation of international standards, both in individual clinics and departments, as well as in the hospitals’ general operation. He explained that the training will last for a week, but the Canada Accreditation team will remain in contact with OKYpY on a weekly basis.

Through the accreditation process, Nicolaou said, hospitals will be accredited with internationally renowned quality standards, something which is expected to benefit professionals and patients alike. OKYpY will monitor the accreditation process in these two hospitals in Nicosia and will include more hospitals in the accreditation process.

Accreditation Canada is a non-profit organization, established in Canada in 1958, currently present in 38 countries, including several European countries, such as Italy, Belgium, Luxemburg, Croatia and Slovenia.

Source Cyprus News Agency

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The EU gender gap for median equivalised net income was close to 5% during the last decade, according to data released by Eurostat, the statistical service of the European Union, ahead of International Women’s Day.

In 2021, in absolute terms, the median value for males was 18,774 euro, almost 800 euro higher than the one for females (17,972 euro).

The equivalised disposable income is the total income of a household, after tax and other deductions, that is available for spending or saving, divided by the number of household members converted into equalised adults; household members are equalised or made equivalent by weighting each according to their age.

In 2021, considering the differences in the degree of urbanisation, the EU gender gap for net income was narrower for people living in rural areas than for those living in cities 4.0% against 4.8%.

Cyprus is sixth when it comes to the overall gender gap, both when it comes to cities as well as when it comes to rural areas, with both percentages being above 6%. However, the difference between urban and rural areas is relatively small, with urban areas being slightly higher.

The gender gap is defined as the difference between male and female incomes as a percentage of male incomes.

At the national level, gender income gaps were higher in cities than rural areas in 13 Member States, with Lithuania and Malta presenting the highest differences in terms of the degree of urbanisation 8.5 and 7.3 percentage points, respectively.

Among the 14 countries where income gaps were higher in rural areas than cities, Austria (5.3 pp) and Italy (4.2 pp) presented the largest differences between the income gender gaps observed in urban and rural areas. Interestingly, in Austrian cities and Maltese rural contexts, the income gap was in favour of females -1.7% and -4.4%, respectively.

Source Cyprus News Agency

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The SIEQUA-CERT (Real-time monitoring and actionable decision support for Sustainable Indoor Environment Quality Certification) project has been selected for funding by the Research and Innovation Foundation under the CO-DEVELOP Programme. The project started on January 1st, 2023, and has a 24-month duration.

The general objective of the SIEQUA-CERT project is the development of real-time Indoor Environment Quality (IEQ) health-impact metrics per building zone and an Indoor Environment and Health Awareness Decision Support System (DSS) with measurable added value to support stakeholders in high occupancy public and private buildings.

Active solutions for monitoring the IEQ

The DSS will provide automated suggestions for potential improvements within buildings, which can lead to the following

Increased employees’ performance and satisfaction.

Reduced risk of transmission and viability of airborne viruses.

Reduced heatingcooling costs.

Overall optimization of resources usage.

Generating actionable insights in terms of the impact on occupants’ health

The SIEQUA-CERT project is coordinated by PHOEBE Research and Innovation Ltd. The interdisciplinary consortium also includes LELANTUS Innovations Ltd, the KIOS Research and Innovation Center of Excellence of the University of Cyprus, the Cyprus Sustainable Tourism Initiative, and two research teams from the Cyprus University of Technology (CUT) the Cyprus International Institute for Environmental and Public Health (CII) and the Department of Electrical Engineering, Computer Engineering and Informatics (EECEI).

The leader of the CUT team is Dr. Konstantinos Makris, Associate Professor from the CII. Other members of the CII team include Corina Konstantinou, PhD candidate; Pantelis Charisiadis, Postdoctoral Fellow; and Christina Xeni, Research Fellow. From the Department of EECEI, the second CUT team is composed of Dr. Michalis Michaelides, Assistant Professor; and Christina Kakoulli, PhD candidate.

The contribution of the two CUT teams is mainly focusing on literature review, acquisition of questionnaire data with respect to environmental and health parameters in indoor environments, as well as refinement and transfer of algorithmsIP for the capturing of virus transmissibility indexes in indoor environments.

Source Cyprus News Agency

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An all-female choir from Cyprus has been selected to perform during a Service to mark this year’s Commonwealth Day at London’s Westminster Abbey.

The Service, on 13th March, will be attended by King Charles, Head of the Commonwealth, and The Queen Consort, accompanied by The Prince and Princess of Wales, The Earl and Countess of Wessex, The Princess Royal and Vice Admiral Sir Tim Laurence.

The ‘Amalgamation Choir’ is a spin-off of a vocaliats’ workshop organised in Cyprus in 2014 and 2015 by Vasiliki Anastasiou, who is the choir’s conductor.

It is a group of voices that performs ‘a cappella’ original compositions with traditional music influences as well as re-arranged songs from the Mediterranean and the Balkans.

The Commonwealth represents a global network of 56 countries, having been joined by Gabon and Togo in 2022. It totals a population of 2.5 billion people.

The Commonwealth Day theme for 2023 is ‘Forging a Sustainable and Peaceful Common Future’.

The Service will commence with a procession of Commonwealth member states’ flags. As 2023 is the Commonwealth Year of Peace, a specially designed Commonwealth Flag for Peace will also be processed this year.

The King will deliver the Commonwealth Day Message from the Great Pulpit and the Service will include the selected musical performances from across Commonwealth countries, including Cyprus.

Source Cyprus News Agency

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The Cypriot economy is expected to grow by 2.5% in 2023, well above the euro area average of 0.5%, said the Governor of the Central Bank of Cyprus Constantinos Herodotou on Tuesday at the Annual Cyprus Maritime Forum in Limassol, adding that the shipping sector has been an important pillar of Cyprus’ economic success.

Referring to Cyprus, Herodotou said that the economy showed notable resilience in 2022, recording significant growth of 5.6%, despite the negative international environment, partly due to the higher-than-expected activity in the tourism industry, the non-dependence of the Cypriot economy on Russian gas, as well as the reality that the Cypriot banking sector has very limited exposure to the Russian economy and therefore has not been affected by the sanctions on Russia.

He added that according to the latest Central Bank of Cyprus forecasts of December 2022, the growth of the Cypriot economy is expected at 2.5% this year, which compares well to the euro area average of 0.5%, and inflation is expected to decelerate in 2023, levelling at 3.3%, from 8.1% in 2022.

CBC Governor also noted that economic growth in Cyprus was supported by new lending by the Cyprus banking sector and by foreign direct investment, while due to new incentives, including the facilitation of a fast-tract process for incoming firms, a large number of high value-adding foreign companies have been attracted to Cyprus, such as major multinational firms in the Information, Communication and Technology industry, supporting Cypriot GDP and reinforcing the vision to transform Cyprus into an emerging technology hub in the Mediterranean.

Cyprus’ importance as a foreign investment hub is also reflected in the Greenfield FDI Performance Index, created by FDI Intelligence, according to which in 2021, Cyprus was ranked in 18th place out of 84 countries included in this index (climbing by 50 places compared to 2020), he added.

The shipping sector is another important pillar of Cyprus’ economic success, noted Herodotou, with Limassol as Cyprus’ maritime capital being the home of influential names in the shipping industry, boosting the country to the top ranks of the sector.

He added that Cyprus is the largest third-party ship management centre in the European Union, one of the largest in the world, while the importance of the sector is evident in the balance of payments data where it ranks third in terms of its contribution to the total value of exports of services at 19% for 2021, after the financial services and ICT sectors, with contributions of 32% and 23%, respectively.

Challenges for policy makers include the global inflation dynamics currently being addressed by central banks, with monetary policy being utilised at a different pace in different regions, due to the differences in economic fundamentals, Herodotou noted.

Regarding the shipping sector, he said it will remain the backbone of the global economy, adding that Cyprus continues to strengthen its role in the shipping sector as a hub for ship management, ship owning and vessel chartering services, aiming to maintain and enhance further the competitiveness and prospects of the sector.

He also contrasted economic and inflation developments in the US and the euro area, Herodotou pointing out that even though both economies were hit by rising inflation, there were different factors behind it, since in the United States demand factors have been the main determinants of the upward inflation trend, while in the euro area price increases were, initially, mostly driven by the supply shock caused by the energy crisis.

The second main difference, he continued, relates to the labour market dynamics of the two economies, with the US labour market exhibiting at a relatively early stage a greater degree of tightness, evidenced by stronger wage growth in the US than in the euro area, while in the euro area the pick-up in wage growth is relatively a more recent phenomenon.

Source Cyprus News Agency

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Cyprus President, Nikos Christodoulides, will meet in Nicosia with the UN Under-Secretary-General for Political and Peacebuilding Affairs, Rosemary DiCarlo, on March 15 at 10.00 local time, Government Spokesman, Konstantinos Letymbiotis, has told the Cyprus News Agency (CNA).

Letymbiotis noted that the meeting will take place in the framework of efforts for the immediate resumption of negotiations for a Cyprus settlement, adding that President Christodoulides will convey to DiCarlo and through her to the UN Secretary General, to whom DiCarlo reports directly, the will of the Greek Cypriot side to break the deadlock in the Cyprus problem.

Moreover, Christodoulides will brief DiCarlo about the diplomatic effort he will make during the next period of time aiming to promote the more active involvement of the EU to efforts for a Cyprus settlement, always under the UN auspices, Letymbiotis noted, adding that the aim is to prepare the ground for the resumption of the talks the soonest possible.

Letymbiotis moreover said that President Christodoulides will have on Thursday a meeting with the UN Secretary General’s Special Representative in Cyprus, Colin Stewart, in view of DiCarlo’s visit to Cyprus, to discuss about the objective of breaking the deadlock in the Cyprus problem. This meeting will take place in the framework of the contacts which the President of the Republic is holding to demonstrate the will of our side to immediately begin negotiations, the Government Spokesman said.

Asked about the document which Nicosia has prepared aiming at a more active involvement of the EU in efforts for a Cyprus settlement, under the UN auspices, Letymbiotis noted that this is a working document, the content of which President Christodoulides will discuss with the Presidents of the EU institutions and with some of his EU counterparts, in the framework of his visit to Brussels at the end of March to participate in the European Council meeting that will take place on March 23 and 24.

Letymbiotis said that to this end President Christodoulides will have meetings in the Belgian capital with the French President Emmanuel Macron, the German Chancellor, Olaf Scholz, and with the Prime Minister of Sweden, Ulf Kristersson, whose country is currently holding the Presidency of the Council of the EU.

Nicosia wants the appointment of an EU envoy for the Cyprus problem, who will always act within the framework of the efforts made under UN auspices and as Letymbiotis noted, President Christodoulides will outline his proposal on this. The President of the Republic does not want to wait until the elections in Turkey and in Greece to begin with these efforts on the Cyprus problem, the Government Spokesman stressed.

Replying to a question, Letymbiotis noted that there has been no answer so far as regards President Christodoulides’ request to meet with the UNSG, Antonio Guterres, in Brussels on the sidelines of the European Council, as Guterres will be there to meet with the EU leaders. We know that Guterres has a tight programme and so we are waiting to see, he added.

State visit to Athens

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Asked about President Christodoulides’ state visit to Athens on March 13 and 14, the Spokesman said that it is an established practice for each President of Cyprus to pay his first visit abroad to Greece, after his election.

He added that apart from this and the fact that Christodoulides will express, during the visit, Cyprus’ solidarity with Greece after the deadly train crash in Tempi, the President will discuss with the Greek Prime Minister, Kyriakos Mitsotakis, about this great effort which begins in Brussels on the sidelines of the European Council, adding that they will also have substantive discussions on other issues, such as energy.

The most fundamental issue is to have the necessary coordination in view of the European Council and efforts on the Cyprus problem, Letymbiotis noted.

Moreover, he said that during his state visit to Greece, President Christodoulides will meet with Prime Minister Mitsotakis, the President of the Hellenic Republic, Katerina Sakellaropoulou, the Archbishop of Athens and All Greece, Ieronymos II, the President of the Hellenic Parliament, Konstantinos Tasoulas, and political party leaders.

Cyprus has been divided since 1974, when Turkey invaded and occupied its northern third. Repeated rounds of UN-led peace talks have so far failed to yield results. The latest round of negotiations, in July 2017 at the Swiss resort of Crans-Montana ended inconclusively.

Source Cyprus News Agency

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