The Cyprus Electricity Authority (EAC) is currently managing projects worth a total of €92 million, co-financed by the EU. These initiatives are part of the “THALEIA 2021-2027” Political Cohesion Program, with the EU covering 70% of the funding.

Major Projects Overview

• Transmission Infrastructure Upgrades (€43 million): This involves the installation and enhancement of transmission substations and other electrical equipment to ensure more reliable power delivery.
• Geographic Information System Expansion (€5 million): The development and expansion of GIS capabilities to improve the management and planning of the electrical network.
• Optical Fiber Network Implementation (€17 million): Integration of optical fiber within the distribution system to enhance communication and data transfer efficiency.
• Distribution System Automation (€27 million): The installation of SCADA/ADMS systems to automate and optimize the distribution network, improving response times and reliability.
• Transmission Line Upgrades (€10 million): Utilizing the reconductoring method to enhance the capacity and efficiency of existing transmission lines.

Strategic Goals

These projects aim to modernize Cyprus’s electrical infrastructure, increase efficiency, and enhance the overall reliability of the power grid. The emphasis on automation and advanced technology integration aligns with broader EU objectives of creating a more resilient and sustainable energy network.

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The successful execution of these projects is expected to have a significant positive impact on Cyprus’s energy sector, fostering economic growth and ensuring a more stable power supply. This initiative reflects a strategic commitment to leveraging EU funds to bolster national infrastructure, thereby supporting long-term development goals.

Recent Eurostat data reveal that 13.8% of young people in Cyprus, aged 15 to 29, were neither employed nor in education or training (NEET) in 2023. This figure, although showing a decline from the 20.4% recorded in 2013, remains higher than the EU average of 11.2%. Cyprus ranks fifth highest in NEET rates within the EU. The European Pillar of Social Rights aims to reduce NEET rates to 9% by 2030, a target already achieved by several EU countries.

Despite a decrease of 0.9 percentage points from 2022, Cyprus continues to face challenges in integrating young people into the workforce or educational systems. The persistent NEET rate underscores the need for targeted policies and programs to address the barriers preventing youth from engaging in employment or education.

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The Cypriot government, in collaboration with the European Union, is working on various initiatives to tackle this issue. These include vocational training programs, apprenticeships, and initiatives aimed at improving access to higher education and job opportunities for young people. The goal is to equip the youth with the necessary skills and qualifications to meet the demands of the modern labour market.

Economic and Social Implications

High NEET rates have significant economic and social implications. Young people who are neither working nor studying are at a higher risk of social exclusion, poverty, and long-term unemployment. Addressing this issue is crucial for fostering a more inclusive and resilient economy.

As Cyprus strives to meet the 2030 target, continuous efforts are needed to reduce the NEET rate further. This involves not only government action but also the participation of businesses, educational institutions, and the community in creating an environment that supports youth engagement in productive activities.

TheSoul Publishing, a leading digital studio, has announced the launch of World’s Fair Communications, a new strategic communications agency targeting Cypriot companies aiming to enhance their global presence. The agency, headquartered in the United States, is co-founded by Craig Radow and Eric Schultz, both former senior executives at TheSoul Publishing with extensive backgrounds in global communications and media relations.

World’s Fair Communications will offer a range of services, including media relations, crisis communication, brand identity, and content strategy, focusing on elevating the global communications footprint of Cypriot businesses.

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Experienced Leadership

Radow and Schultz bring over four decades of combined experience in media and public relations. Their previous roles at TheSoul Publishing and other high-profile companies have equipped them with the expertise needed to navigate the complexities of global communications. Their leadership is expected to drive the agency’s success in helping Cypriot companies achieve international recognition.

 TheSoul Publishing’s Vision

Arthur Mamedov, CEO of TheSoul Publishing, expressed excitement about the new venture, highlighting the successful collaboration with Radow and Schultz in building TheSoul’s global communications department. The new agency aims to replicate and expand these successes to benefit other Cypriot companies, leveraging TheSoul’s strategic communication capabilities.

Loan demand continued to decline in the first quarter of 2024, with banks attributing the decline to high interest rates, while the terms and conditions for granting loans to businesses became tighter in the first quarter of 2024 after three consecutive quarters in which they had remained unchanged.

The criteria for lending to households remained stable.

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According to the Central Bank’s Bank Lending Survey for the first quarter of 2024, the credit standards, as well as the terms and conditions for loans to enterprises, tightened in the first quarter of 2024, mainly due to Banks’ reduced risk tolerance, as well as their perception of increased risk about the general economic situation and the outlook for the economy.

On the other hand, the credit standards for loans to households remained unchanged in the first quarter of 2024, for mortgage loans, consumer and other loans.

The terms and conditions for housing loans also remained unchanged while they tightened for consumer credit and other lending to households.

The net demand for business loans decreased, in the first quarter of 2024, and at the same time, the net demand for housing loans as well as for consumer credit and other lending also decreased.

However, the survey notes that increased financing needs for fixed investment, possibly reflecting the positive growth prospects of the Cypriot economy, as well as debt refinancing/restructuring, contributed positively to loan demand.

As far as households are concerned, the net decline in demand for mortgage loans is attributed by banks to higher interest rates, lower consumer confidence and a weakening housing market outlook.

Finally, according to banks’ expectations for the second quarter of 2024, the lending criteria for both businesses and households are expected to remain unchanged compared to the previous quarter. At the same time, a decline in net demand for consumer and other loans from households is expected, while both net demand for business loans and mortgage loans from households are expected to remain stable.

Minister of Labour and Social Insurance Yiannis Panayiotou has conveyed the government’s commitment to adequate wages and dignified pensions promoting more social justice in citizens’ everyday life.

According to a press release issued by the Ministry of Labour, Panayiotou made the statements while addressing the Plenary of the ILO’s Global Coalition for Social Justice held in Geneva, on 13 June.

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The Global Alliance was set up during the 2023 ILO Conference, aiming to promote social justice in the shaping of public policy and social dialogue between social partners, numbering more than 250 participants including governments, workers and employers’ organisations and other international organisations.

Cyprus was one of the first states to respond to the invitation by ILO Director-General, the Ministry said.

In his address, Panayiotou said universal and lasting peace can only be consolidated if it is based on social justice.

“This is what we are defending in this body for over a century and our commitment will continue to be in place for the years and generations to come,” he added.

Panayiotou stressed that the Cypriot government remains “dedicated to safeguarding better wages and better pensions, adequate income for all those actively participating in the labour market so we could maximize the economy’s capacity and to secure our citizens’ welfare.”

“Our government is determined to actively participate in the Global Alliance because we believe in its cause and we want our Alliance to succeed,” he said.

The Y. Georgiades & Associates announced that it has joined Dentons’ Nextlaw Referral Network, enabling it to connect its clients to high-quality lawyers around the world. Nextlaw Referral Network is the largest legal referral network in the world, with more than 750 member firms and 36,000 lawyers across 200+ countries.

The managing partner Mr Yiannos Georgiades said, “By joining Nextlaw Referral Network, we can now provide our clients with the best of all worlds by continuing to serve them where we currently have offices, while also being able to direct them to top-tier lawyers in other jurisdictions where they need legal counsel and business advice. We can build on our trusted relationships with our clients by putting the full resources of the global, legal powerhouse at their disposal.”

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Aleksandra Pimenides, Director of Member Services at Nextlaw Referral Network said, “We’re proud to have Y. Georgiades & Associates LLC as part of our network. We’re only as good as the quality of our member firms and Y. Georgiades & Associates LLC makes us stronger and better able to meet the needs of our other members’ clients in Europe and on a more international level.”

Nextlaw Referral Network was created by Dentons, the largest law firm in the world. The network, which is free to join, employs a detailed screening system to guarantee the quality of its member firms and has developed proprietary technology to allow members to identify lawyers at other member firms with the appropriate experience where clients need legal counsel.

Y. Georgiades & Associates LLC is recognized for its commitment to delivering high-quality legal services, driven by a passion for justice and a deep understanding of our clients’ needs. The firm stands by its clients, representing individuals, businesses, and corporations across a spectrum of industries. They provide robust and reliable legal counsel, making them a trusted advisor in Cyprus and beyond.

Y. Georgiades & Associates LLC champions innovative tech startups and investors, strengthening the ecosystem by establishing private equity and VC funds focused on technology. The firm ensures robust IP protection through patent and trademark registration, due diligence, and essential agreements while offering comprehensive tax, regulatory, and compliance advice and strong dispute representation.

Another individual, holder of the Cypriot nationality and two companies registered in Cyprus are included in the list of new sanctions imposed by the US against Russia on Wednesday.

The US Treasury Department announced new sanctions on more than 300 individuals and entities to degrade Russia’s capability to pursue its war of aggression against Ukraine.

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In OFAC’s updated list, Bulat Akhatovich Yanborisov, a Russian who also holds Cyprus citizenship, is included. According to a US Treasury Department press release, Russia-based Silk Way Rally Association holds an annual off-road rally race that the U.S.-designated Russian Main Intelligence Directorate (GRU) uses as a front for intelligence operations.

The GRU has given awards to Bulat Akhatovich Yanborisov, the head of Silk Way, for his work. Bulat appears to use his properties in Europe as transit points for GRU officers. Bulat, who is Silk Way’s CEO and general director, alongside his son Amir Bulatovich Yanborisov, uses Silk Way’s logistical infrastructure to procure anti-UAV and radioelectronic warfare equipment for use on the battlefield in Ukraine.

Moreover, the Cyprus-registered companies Picotin Holdings Ltd and Sentimare Enterprises Ltd were also added to the list of sanctions. According to the US Department of State, the two companies are linked to Vladimir Olegovich Potanin, one of the wealthiest oligarchs in Russia, who formerly served as a Deputy Prime Minister for the Russian Federation.

Potanin has been on the sanctions list since December 2022. The Department is designating four Liechtenstein-based foundations, Paloma Foundation, Spero Foundation, Natwin Foundation, and Cafar Foundation, as well as two Cyprus-based entities, Sentimare Enterprises Ltd and Picotin Holdings Ltd and one UAE-based entity, Sentimare Me Ltd, connected to the scheme.

Given that Potanin was previously the ultimate beneficial owner of Sentimare Enterprises Ltd and his minor children’s current equal ownership of the four foundations, the US Department of State believes that Potanin retains control of the four foundations and thus the control of Sentimare Enterprises Ltd, that is controlled by the four foundations.

Moreover, it notes that Sentimare Me Ltd and Picotin Holdings Ltd are being designated for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Sentimare Enterprises Ltd, since they are both wholly owned by Sentimare Enterprises Ltd.

Eurobank’s share in Hellenic Bank has increased to 55.48%, after the latest acquisition of 240.303 shares, for €0.62 million.

In a press release, Eurobank S.A., a subsidiary of Eurobank Ergasias Services and Holdings S.A., announced that on June 11th, it purchased 240,303 shares in Hellenic Bank Public Company Limited at the price of €2.56 per share for a total consideration of ca. €0.62 m. 

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Eurobank, following the above acquisition, directly holds 229,029,857 shares representing 55.48% of the total issued share capital and of the voting rights of Hellenic Bank.

A significant increase of 12.87% was recorded in the Cyprus Stock Exchange (CSE) during May, mainly driven by the rise in financial companies, which accounted for 77.54% of the monthly trading volume.

The weight of Bank of Cyprus and Hellenic Bank stocks was particularly notable.

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According to a monthly review issued by CSE in the latest trading session of May 2024, the financial markets experienced a significant surge, with the General Index reaching 163.35 points, marking a notable 12.87% increase from the previous month. This upswing was accompanied by a substantial rise in the total value of shares traded, which increased by 51.28% compared to the preceding month.

However, despite the increase the highest level that the General Index reached for the month was 166,62 points. The other Market Indices reached the following levels: Main Market reached 127.47, Alternative Market 1,314.80, and Investment Companies 1.916,24 points. On a sectoral level, the Hotels Index reached 923.57 points. The FTSE/CySE20 reached 99.30 points. The market capitalisation of shares reached € 4.62 billion. According to this month’s results, the Main Market accounted for 21.28% of the total market capitalisation, the Alternative Market 6.23%, the Surveillance Market 0.49% and the Bond Market 72.01%.

Moreover, the total market capitalisation including the Bond Market reached € 16.52 billion compared to € 15.91 billion the previous month, registering an increase of 3.81%. The total value of transactions during the month in review reached € 17.41 million, with an average of € 0.92 million per trading session.

The Financials sector contributed 77.54% to the total value traded which was the highest among all other sectors. Investors primarily focused their interest on the shares of “Bank of Cyprus Holdings Plc” and also on shares of “Hellenic Bank Public Company Ltd” with 42.53% and 29.09% of the total value respectively.

New Governor of the Central Bank of Cyprus (CBC), Christodoulos Patsalides, said he was against the imposition of taxation on windfall profits, explaining that such a move would not help the economy. Still, it would be harmful since it would disrupt the fiscal predictability necessary for attracting foreign investors to a small open economy like Cyprus.

The Governor, who gave his first press conference since the assumption of his duties, spoke about the need for the CBC to be transformed and added that broad responsibilities will be given to the executive members of the bank’s Board of Directors.

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Regarding interest rates in Cyprus, Patsalides said that following the first reduction of key interest rates by the European Central Bank, the gap between lending and deposit rates is moving in the right direction, but at a slow pace.

Asked about the acquisition of the Hellenic Bank by the Greek Eurobank, the Governor said that this is positive, noting that it will strengthen competition. 

The Cypriot economy, Patsalides said, records “very good growth rates” and highlighted the big fiscal surpluses, but also the downward trend of the public debt, which, as he stressed, is very important for Cyprus and this will become more evident with time when in many other EU countries they are still making efforts to converge with the Maastricht criteria.

Asked about proposals to tax the windfall profits of banks, the Central Bank Governor said that he had a meeting with the parliamentary party AKEL which handed over such a proposal. He noted that it was a serious proposal, adding however that such a tax “would not help the economy, but would rather hurt it.”

“The unwanted gap between deposit and lending rates should be managed, not through taxation but through measures which will help mitigate the problem,” he said.

Such ad hoc taxes cause side effects on the economy without offering solutions, he noted, adding that any tax reform should be predictable since the Cypriot economy depends on investments and in particular on foreign investments which would also help with reducing the deficit of the current account balance. 

At the same time, he noted that in other countries where this tax has been imposed consumers had to pay the extra cost as banks passed it on. 

Patsalides said that banks are performing very well and have high capital ratios, large return on equity ratios, high liquidity and a significant improvement in assets.

He added that non-performing loan ratios, however, are above the European average.

Meanwhile, when asked about applications for granting a banking license to financial technology companies (fintechs), the Governor confirmed that there are indeed such applications. 

“New banks in Cyprus, if and as long as there is interest and it concerns serious banks, which will comply with the supervisory criteria and provided they have a sustainable plan, then they are welcome,” he said, pointing out though that Cyprus is too small to attract a large number of banks.