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Central Bank of Cyprus Issues Warning on Economic Risks

by THEFUTURE.TEAM

August 5, 2024

The Central Bank of Cyprus (CBC) has issued a stark warning regarding potential economic risks, emphasising the necessity for vigilance and proactive measures to ensure economic stability. Governor Constantinos Herodotou, in his address, highlighted several key vulnerabilities that pose significant threats to the Cypriot economy.

Inflation Pressures

The CBC is particularly concerned about rising inflation rates. Persistent inflation can erode purchasing power and destabilise the economy. Governor Herodotou urged both policymakers and businesses to implement effective strategies to mitigate inflationary impacts, suggesting that a coordinated approach is essential to managing this risk.

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Real Estate Market Concerns

Another area of concern is the rapid growth in the real estate market. While growth can be a sign of a robust economy, unchecked expansion can lead to speculative investments and market bubbles. The CBC’s cautionary stance suggests that measures should be taken to ensure that real estate investments are sustainable and that market stability is maintained.

Banking Sector Stability

The stability of the banking sector remains a top priority for the CBC. Governor Herodotou emphasised the importance of stringent regulatory frameworks to ensure that financial institutions can withstand potential economic shocks. The CBC advocates for a resilient banking sector that can support the economy even during periods of uncertainty.

Strategic Recommendations

To counter these risks, the CBC recommends several strategic measures:

Enhancing Economic Diversification: Reducing reliance on a limited number of economic sectors can mitigate risk and promote stability.
Implementing Robust Financial Regulations: Ensuring that financial institutions adhere to strict regulatory standards is crucial for maintaining stability.
Fostering Sustainable Growth: Encouraging practices that promote long-term economic health over short-term gains is essential.

Governor Herodotou also stressed the importance of maintaining fiscal discipline. This involves managing public finances prudently to avoid excessive debt and ensuring that monetary policies are aligned with long-term economic objectives.

The CBC’s warning serves as a critical reminder of the delicate balance required to maintain economic stability amidst evolving global and local challenges. Stakeholders in Cyprus’s economy must heed these warnings and take concerted actions to safeguard the nation’s financial health. The proactive measures suggested by the CBC are aimed at fortifying the economy against potential risks and ensuring sustainable growth.

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Competition Authority Launches Comprehensive Review of ExxonMobil Cyprus Acquisition

by THEFUTURE.TEAM

September 16, 2025

Investigation Initiated Over Strategic Acquisition

The Competition Protection Authority has commenced a thorough investigation into the acquisition of ExxonMobil Cyprus Limited’s share capital by Petrolina Holdings Public Ltd through Med Energywise Ltd. This inquiry was formally initiated following a session held on 10 September 2025, after an in-depth review of the pertinent report by the Authority’s Service.

Concerns Over Market Compatibility

Authorities have expressed serious concerns regarding the compatibility of the transaction with established competitive practices. The review indicates that the acquisition may affect several critical petroleum markets, both horizontally and vertically, thereby raising the potential for adverse impacts on market dynamics.

Horizontal Market Dynamics

On the horizontal front, potential effects have been identified in the import market for petroleum products, as well as in both wholesale and retail distribution channels of these products. The consolidation is believed to increase the risk of price rises and coordinated actions, given the direct competitive proximity between Petrolina and ExxonMobil.

Vertical and Adjacent Market Implications

Vertical aspects of the merger are also under close scrutiny. The new entity could restrict competitors’ access to critical infrastructure such as storage facilities, supply channels, and customer bases. These restrictions could further affect the onshore distribution of fuels, the wholesale market for lubricants, and specialized technical services connected with fuel station operations.

Local Market Considerations

Particular attention is being paid to the potential concentration in the retail fuel market. The investigation suggests that a reduced competitive landscape within a four-kilometer radius of the companies’ fuel stations could lead to diminished local competition, adversely impacting consumer prices and options.

Next Steps and Industry Impact

The Competition Protection Authority, which reached a unanimous decision to pursue a full investigation, remains open to submissions from parties that might be affected by this transaction, as mandated by current legislation. A final decision is expected within four months upon receipt of all necessary evidence, potentially setting a significant precedent for future market consolidation cases in the energy sector.