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Archives January 9, 2013 posted by

‘The right people are now in charge’

CYPRUS is on the road to cleaning out its banking sector and winning back the trust of the markets, Central Bank governor Panicos Demetriades said on Monday in his first address to eurozone ambassadors in Nicosia.  

In a comprehensive discussion on the trials and tribulations of the banking system in Cyprus and the government’s efforts to secure a bailout from the European Stability Mechanism, Demetriades acknowledged that an entrenched culture existed in the banking sector which exasperated the problems facing the country, resulting in its overexposure to Greece. 

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Archives January 4, 2013 posted by

CB governor: banking sector ‘turning the page

THIS YEAR will be full of challenges, Central Bank Governor Panicos Demetriades said yesterday, with the need to successfully implement the bailout adjustment programme taking centre stage.

Successful implementation of the adjustment programme would secure the stability of the island’s banking system, which is currently going through severe turbulence due to its exposure to Greece, the governor said.

“Our aim is for a banking system based on solid foundations,” Demetriades told reporters.

Demetriades, who took over at the helm of the Central Bank early last year, struck a note of optimism about the future of the sector.

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Archives January 3, 2013 posted by

Christofias ‘in no mood’ to bow to state sell-off demands

PRESIDENT Demetris Christofias said yesterday he had no intention of privatising semi-state companies as part of a bailout deal as he blamed the former Central Bank governor once more for the island’s predicament.

“We are leaving (office) with our head held high and proud for our services to the Cypriot people for the past 90 years or so and our services in the last five years,” Christofias said during a New Year event at ruling AKEL’s Nicosia district office. 

The president, who will not be seeking re-election in February, blamed the banks for Cyprus’ economic woes and former CB governor Athanasios Orphanides whom he accused yet again of lax supervision.

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Archives December 28, 2012 posted by

Russia: no bilateral loan for Cyprus

RUSSIA does not intend to grant Cyprus an interstate loan because the associated risks are too great to be assumed by any single creditor, Russia’s deputy finance minister has said.

“We have no specific plans or instructions to do so,” Sergei Storchak said in a December 24 interview with news agency Bloomberg in Moscow.

“It’s obvious that no single creditor can work with Cyprus alone,” he added. “Anyone who steps up on an individual basis to finance that country’s government or to help recapitalise its banks would be taking an enormous risk.”

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Archives December 20, 2012 posted by

Budget approved with 27 changes

PARLIAMENT LAST night voted through the 2013 budget incorporating the terms agreed between Cyprus and its international lenders after marathon speeches made over two days by MPs criticising government policy. 

With 51 votes in favour and two against, the plenum passed the austerity-geared annual budget that will see the state spend some €9.5 billion (without factoring in loans) and earn €7.6 billion. Despite voicing their reluctance, the main parties voted in favour, with only the Greens’ Giorgos Perdikis and EVROKO’s Nicos Koutsou voting against. 

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Archives December 19, 2012 posted by

Defaulting on public-sector wages could have triggered a ‘run on the government’

THE QUESTION ‘what would happen had the state defaulted on civil servants’ 12th and 13th salaries’ has elicited mixed reactions, reminiscent of the speculation on the (supposed) Mayan prediction for December 21, 2012: some declare it would have brought about the apocalypse, others say “bah, humbug!”

“The consequences would be quite severe,” offers Theodore Panayotou, director of the Cyprus International Institute of Management.

“For one thing, civil servants would have lowered their productivity – there’s no doubt in my mind about that. Also, Cyprus would risk losing any credibility it has abroad: if the state is unable to pay its own employees, then what sort of message does that send?”

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Archives December 18, 2012 posted by

Orphanides closes 11 branches

ORPHANIDES Supermarkets’ hopes for a reprieve appeared to have been dashed yesterday after its main creditors reportedly rejected the appointment of an administrator to oversee the company’s restructuring.

The news came as the company, in the red for well over €200m, announced it was temporarily shutting down 11 stores across the island amid depleting stocks.

Citing sources, the state broadcaster said last night both Popular Bank and Bank of Cyprus turned down the company’s proposal to appoint Andreas Andronikou, of UK auditing firm UHY Hacker Young, as administrator.

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Archives December 14, 2012 posted by

DISY bid to axe free healthcare to Turkish Cypriots

OPPOSITION parties DISY and DIKO yesterday submitted draft legislation that would effectively end free health care for Turkish Cypriots and allowances paid to asylum seekers.

“At a time when the state is cutting social allowances from vulnerable groups of the population, we consider it inconceivable for our Turkish Cypriot fellow citizens or other citizens of third countries, to have free access to health services and collect allowances without making any contribution to the social insurance fund or having submitted a tax return,” said DISY MP Tasos Mitsopoulos.

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Archives December 13, 2012 posted by

CoLA freeze, fuel hikes, and tax on lottery winnings

APART from cuts in social transfers, the batch of austerity bills approved by parliament yesterday include a freeze in cost of living allowance payments (CoLA), hikes in fuel taxes and contributions of private sector workers.

Petrol and motoring diesel will go up by 7 cents per litre from January 1 next year and five more cents in 2014.

Private sector employees and pensioners and the self-employed will continue in 2013 to pay a staggered contribution between 2.5 per cent and 3.5 per cent on their monthly wage with the threshold being €2,501.

The contribution was extended to 2016 with the threshold going down to €1,501 in 2014.

The same goes for the public sector.

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Archives December 12, 2012 posted by

Supreme Court orders retrial in Helios case

BY A majority decision the Supreme Court has upheld an appeal lodged by the Attorney-general and has ordered a retrial of the Helios air crash case.

In the ruling, six of the nine judges said they had found fault with the Nicosia criminal court’s prior decision to acquit the defendants and as such a retrial was warranted.

“It is understood that the complexity and scope of the case will entail additional time and cost, however the public interest is such that it must prevail, in order that proper and effective justice be served,” the decision by the majority of the panel read.

The case will now be tried from scratch by a different criminal court, at a date to be determined.

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