In a landmark meeting in Nicosia, the Cyprus Research and Innovation Foundation (RIF) and Japan Science and Technology Agency (JST) laid the groundwork for future collaborative initiatives in cutting-edge fields such as artificial intelligence, robotics, energy, space research, and biotechnology.

The meeting, attended by prominent figures including Cypriot Chief Scientist Dimitris Skourides and JST President Dr. Kazuhito Hashimoto, highlighted Cyprus’s strategic vision and significant advancements in innovation. These achievements, reflected in Cyprus’s strong performance on the European Innovation Scoreboard, are attributed to strategic policies, robust funding programmes, and supportive government incentives.

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Skourides emphasised that these efforts have substantially enhanced Cyprus’s research infrastructure, spurring a notable increase in innovative activities among small and medium-sized enterprises. He also pointed to Cyprus’s excellence in research publications, particularly those resulting from public-private partnerships, and in promoting collaborations between innovative businesses.

The meeting marked a crucial step in identifying specific areas for joint research and innovation efforts. Dr. Hashimoto expressed keen interest in Cyprus’s initiatives, signalling a promising avenue for future projects that leverage the strengths of both nations.

The discussion underscored a strong commitment from both countries to foster a cooperative environment in research, innovation, and technology. The potential collaboration aims to harness the combined strengths of Cyprus and Japan, particularly in AI and robotics, promising significant advancements and mutual benefits.

The successful Cyprus-Japan Business Forum held earlier this year further exemplifies the growing economic cooperation and opportunities for a more innovative and sustainable future for both nations.

Strengthening Innovation Ties

The collaboration between Cyprus and Japan is poised to significantly bolster the innovation landscapes of both countries. Cyprus, with its growing reputation as a hub for technological advancement, offers a fertile ground for Japan’s sophisticated research and development capabilities. This partnership is expected to facilitate the exchange of knowledge, expertise, and resources, driving forward innovations that can address global challenges in various high-tech domains.

Maria Panagiotou, the Cypriot Minister of Agriculture, has called upon the European Union to support the demographic revitalisation of rural areas. Addressing the EU Agriculture and Fisheries Council in Brussels, she emphasised the critical need for enhanced funding mechanisms under the Common Agricultural Policy (CAP) to counteract rural depopulation and make these areas attractive to younger generations.

Panagiotou’s appeal aligns with broader European concerns over rural depopulation, a pressing issue that threatens the socio-economic fabric of many member states. The inaugural Council under the Hungarian EU Presidency highlighted demographic revitalisation as a key agenda, underscoring the shared challenges across the Union.

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The Cypriot government’s strategy hinges on a multi-faceted approach, leveraging a range of financial tools to support sustainable agricultural practices and improve rural infrastructure. These efforts aim to create viable economic opportunities that can attract and retain young people in rural communities. Panagiotou stressed that relying solely on national resources is insufficient to address these challenges, advocating for a bolstered CAP supplemented by additional EU funding streams.

Central to this strategy is the need to make small and medium-sized agricultural enterprises competitive and sustainable. The high cost of transporting goods from remote areas presents a significant barrier to profitability and growth. By enhancing CAP with additional financial instruments, Cyprus seeks to build the necessary infrastructure that can transform rural areas into thriving, attractive locations for new farmers and families.

The call for EU support reflects a recognition of the interconnected nature of rural development challenges and the need for a coordinated response. Panagiotou’s remarks underscore the urgency of action to ensure that rural areas do not become mere historical footnotes but instead vibrant, economically viable communities.

In conclusion, Cyprus’s request for EU assistance in rural demographic revitalisation is a strategic move aimed at sustainable development. It seeks to address the dual challenges of rural depopulation and economic viability, with a clear focus on creating a supportive environment for the next generation of farmers and rural inhabitants. The success of this initiative could serve as a model for other EU member states facing similar challenges, highlighting the importance of solidarity and coordinated action in addressing common European issues.

Cyprus is on the cusp of achieving its first ‘A’ rating from Fitch in over a decade, marking a significant milestone in the country’s economic recovery. The international rating agency Fitch recently upgraded Cyprus’s credit rating from BBB to BBB+, and Standard & Poor’s followed suit, both reflecting positive economic developments.

The Road to Recovery

In the aftermath of the financial crisis in 2013, Cyprus faced severe economic challenges, including a high ratio of non-performing loans (NPLs) and substantial public and private debt. Over the years, concerted efforts have been made to address these issues, leading to significant improvements. Fitch noted that the NPL ratio had dropped to 7.9% by the end of 2023, the lowest since the global financial crisis, a significant decrease from its peak near 50%.

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Policy and Legislative Reforms

The Cypriot government has implemented various policy and legislative reforms to strengthen the financial sector and promote economic resilience. A notable initiative is the revised divestment framework approved by Parliament, expected to further reduce NPLs and enhance the banking sector’s stability. Additionally, the government’s efforts in deleveraging have resulted in reduced household and corporate debt-to-GDP ratios, bringing them closer to the EU average.

Economic Indicators and Future Prospects

The upgrades by Fitch and Standard & Poor’s signal increased confidence in Cyprus’s economic prospects. These improvements, coupled with a positive outlook, pave the way for Cyprus to achieve an ‘A’ rating for the first time since 2011. The return to an ‘A’ rating would signify a restored confidence in Cyprus’s economic stability and growth potential, attracting further investment and boosting economic activity.

Challenges Ahead

Despite these advancements, challenges remain. The non-performing loans, though reduced, still represent a higher percentage of total loans compared to other EU countries. Additionally, ongoing social incentives complicate the resolution of mortgage-related NPLs. The Cypriot economy must continue to navigate these complexities to maintain its upward trajectory.

The South-Eastern Europe Cinema Network (SEECN) has unveiled an exciting opportunity for filmmakers through a competition aimed at funding production plans for feature films among its member countries. Announced by the Cyprus Ministry of Culture’s Department of Contemporary Culture, this initiative seeks to support and enhance the creative output of the regional film industry.

Funding Details and Goals

The SEECN competition offers substantial financial support, with funding amounts ranging from €6,000 to €10,000, contingent on the network’s financial capacity. The goal is to boost collaborative projects that promote cultural exchange and innovation in cinema. This funding aims to provide a significant boost to filmmakers, helping them bring their creative visions to life and reach a broader audience.

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Eligibility Criteria

The competition targets feature films with a minimum runtime of 70 minutes, intended for theatrical release. To qualify, proposals must be co-productions involving at least two producers from the network’s member states, which include Cyprus, Greece, Serbia, Albania, North Macedonia, Montenegro, Kosovo, Romania, and Bulgaria. This requirement encourages cross-border collaboration, fostering a spirit of cooperation and shared cultural experiences.

Submission Requirements

Applicants must submit detailed proposals by 16 September 2024. Each submission should include:

• A synopsis of the film
• An extended summary
• The full screenplay in both English and Greek
• Additional documentation in English

Two identical, bound copies of the complete production folder are required for the application to be considered. The proposals will be meticulously reviewed at the network’s General Assembly meeting scheduled for November 2024.

Selection Criteria and Operation

The selection criteria focus on the project’s potential to contribute to the cinematic landscape, its cultural relevance, and the feasibility of the production plan. The Department of Contemporary Culture will provide additional information and support to applicants. Interested parties can contact the department via phone or email and access detailed guidelines and application forms on the Ministry of Culture‘s website.

Importance of the Initiative

This competition underscores the SEECN’s commitment to fostering cinematic excellence and supporting filmmakers in the region. By providing financial assistance and encouraging international co-productions, the initiative aims to elevate the standard of filmmaking and promote cultural dialogue through the arts.

As Cyprus grapples with soaring temperatures, the financial burden on consumers due to increased energy consumption is becoming apparent. The Cyprus Electricity Authority (EAC) has reported a significant uptick in electricity bills, driven not by rising energy prices, but by extensive use of air conditioning units.

Rising Costs

According to the EAC President, George Petrou, electricity bills for June and July 2024 are projected to increase by approximately 1.5% compared to May. This rise is attributed to the heavy reliance on air conditioning, necessitated by the extreme heat. Petrou highlighted that while fuel prices have remained stable due to pre-purchased stock, the intense use of air conditioning has led to higher consumption rates, thereby increasing costs for consumers.

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Recommendations for Consumers

To mitigate these costs, the EAC advises consumers to use air conditioners judiciously. Petrou recommends setting air conditioners to 26 degrees Celsius, noting that each degree lower can increase energy consumption by up to 6%. This means that setting an air conditioner to 18 degrees instead of 26 can lead to a 40% rise in energy usage. Consumers are also urged to ensure windows are closed while air conditioners are in operation to maximise efficiency.

Economic Implications

Kostas Karayiannis, Head of the Consumer Protection Service, pointed out that electricity costs and high interest rates are major concerns for households and businesses. While a recent decrease in fuel prices provided some relief, there is cautious optimism about the stability of these prices in the near future.

Government Measures

The Cypriot government has extended its subsidy on electricity prices and maintained a zero VAT rate on 11 essential consumer goods until October 2024. These measures aim to alleviate the financial strain on consumers during the peak summer months. Marios Drousiotis, President of the Cyprus Consumers Association, commended the government’s initiatives but cautioned that consumers will still face significant electricity bills due to the necessity of air conditioning in the high temperatures.

The latest data from the Central Bank of Cyprus indicates a notable decline in the issuance of new business loans during the first five months of 2024. The reduction is largely attributed to the prevailing high interest rates and overarching economic uncertainties, which have deterred businesses from taking on new debt.

Decrease in Loan Issuance

New business loans amounted to €814 million from January to May 2024, marking a significant drop from €971 million during the same period in 2023, representing a decrease of 16.1%. This downward trend contrasts with the increase in loans to households, which rose by 6% to €556 million, up from €524 million in the previous year.

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Factors Influencing the Decline

The economic environment in Cyprus has been characterised by heightened interest rates, making borrowing more expensive and less attractive for businesses. Additionally, the broader economic uncertainties have prompted companies to adopt a more cautious approach, opting to restructure existing debts rather than seek new loans. The data reflects a broader trend where businesses are focusing on managing their current financial obligations in a volatile economic climate.

Restructuring Over New Borrowing

The preference for debt restructuring over new borrowing is evident from the data. Business loan restructurings decreased to €731.1 million from €951.7 million in 2023. This decline indicates a strategic shift among businesses towards consolidating and managing existing debts instead of expanding their borrowing.

Household Loans on the Rise

In contrast to the business sector, household loans have shown resilience and growth. The increase in household loan issuance suggests a stable demand for personal and residential financing. This growth may be supported by favourable government policies and economic measures aimed at boosting consumer confidence and spending.

Implications and Future Outlook

The decline in business loans could have significant implications for the Cypriot economy. Reduced borrowing can lead to lower investment in business expansion and innovation, potentially impacting economic growth. However, the focus on debt restructuring may lead to healthier balance sheets and more sustainable financial practices in the long run.

The construction sector in Cyprus demonstrated remarkable growth in 2022, with the value added at current prices escalating by 8.9% to €1,442.4 million, a notable rise from €1,325.0 million in 2021, according to the latest Construction and Land Development Survey. This increase underscores a robust recovery and expansion within the sector, reflecting a broader positive trend in the island’s economy.

A Detailed Breakdown of Growth

The overall production value in the construction sector surged by 10.3%, reaching €5,564.7 million in 2022, up from €5,044.9 million the previous year. This substantial rise is indicative of increased activity and investment within the industry, driven by both public and private sector projects. Notably, the value of new construction projects climbed by 15.6%, totalling €3,392.8 million, a testament to the sector’s dynamism and its pivotal role in the country’s economic landscape.

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Sector-Specific Insights

Residential buildings experienced an impressive 21.3% increase in value, highlighting a strong demand for housing and reflecting the sector’s responsiveness to market needs. This surge is partly attributed to favourable financing conditions and government incentives aimed at stimulating residential construction. Conversely, non-residential buildings saw a slight decline of 1.8%, suggesting a potential shift in investment focus or market saturation in certain commercial real estate segments. However, civil engineering projects recorded a robust 18.4% growth, driven by substantial investments in infrastructure development, including roads, bridges, and utilities, which are essential for supporting long-term economic growth.

Employment Trends

Employment within the construction sector also saw a positive trajectory, with a 3.0% increase in the workforce, totalling 37,500 individuals in 2022, up from 36,400 in 2021. This growth in employment is a clear indicator of the sector’s expanding capacity and its contribution to reducing unemployment rates. The increase in job opportunities within construction further underscores the sector’s critical role in the broader economic recovery and growth of Cyprus.

Implications and Future Outlook

The significant growth in the construction sector not only highlights its resilience but also its crucial role in the economic framework of Cyprus. The surge in residential construction points to a thriving housing market, which could attract further investment and drive economic stability. The robust performance in civil engineering projects signals ongoing infrastructural improvements, essential for sustaining long-term economic development.

Moving forward, the construction sector is poised to continue its growth trajectory, supported by ongoing and planned infrastructure projects, coupled with favourable economic conditions. Policymakers and industry stakeholders must, however, remain vigilant to potential market shifts and ensure sustainable development practices to maintain the sector’s positive momentum.

Government Spokesman Konstantinos Letymbiotis said that during the 12 July Council of Ministers meeting, the Ministries began presenting their flagship actions that will be included in the 2025 state budget.

In statements after the Cabinet meeting, Letymbiotis said it was the second special meeting of the Council of Ministers that took place intending to coordinate the preparation of the state budget for 2025. The first special session of the Council of Ministers for the preparation of the state budget for 2025 took place at the start of last week.

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The goal, he added, is for the second annual state budget to clearly capture the vision, but also the essence of the governance programme of President Christodoulides.

Letymbiotis said that each Ministry will present its action programmes – just as they did last year – noting that at the beginning of next year, the President will present, in a special event, the actions that will be implemented in 2025.

Elon Musk’s social network X is violating European Union digital law by misleading users and not being transparent enough, the European Commission announced today.

KEY FACTS

• The European Commission’s move follows a seven-month investigation under the Digital Services Act (DSA), which requires many major online platforms and search engines to do more to tackle illegal content and risks to public safety.
• The commission said the user authentication system, known as a blue tick, is open to abuse by motivated malicious actors because anyone can pay to have a blue tick next to their name.
• Previously, the blue tick “indicated reliable sources of information,” European Internal Market Commissioner Thierry Breton said in a statement. X now has the right to a defence, but if our opinion is confirmed, we will impose fines and demand significant changes, he added.

WHAT TO WATCH FOR

The EU’s move under the Digital Services Act could eventually pave the way for fines of up to 6% of X’s revenue if the company fails to allay the bloc’s concerns. There is no specific time frame for the next steps in the investigation.

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A lack of transparency about ads also potentially violates the law, the European Commission said, as does the platform’s failure to open up its data to researchers.

China’s imports fell in June, missing expectations for a slight rise, while exports rose more than expected, customs data showed on Friday.

KEY DATA

• China’s imports fell 2.3% in June from a year earlier in US dollar terms. That contrasted with a forecast for growth of 2.8 percent, according to a Reuters poll.
• Exports denominated in US dollars for June rose 8.6% year-on-year, beating expectations for growth of 8%.
• Those numbers boosted year-to-date imports by 2% and exports by 3.6% in the first six months compared to the same period a year earlier.
• China’s trade with the Association of Southeast Asian Nations grew 7.1 percent in the first half of the year, cementing the bloc’s position as the country’s largest trading partner by region, followed by the European Union.

ACCENT

China’s imports of rare earth elements, meat, cosmetics and machinery fell sharply in the first half of the year, customs data showed. During this time, however, imports of iron ore and oil increased.

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Amid slower domestic growth, Beijing has sought to shore up its supplies of food and essential minerals to bolster national security.

In the first half of the year, China’s exports of furniture, home appliances, ships and automobiles rose. Exports of rare earths fell in value but rose in volume, the data showed.

China’s car exports rose 18 percent in volume last month from the same period last year, customs data showed.

WHAT TO WATCH FOR

China’s exports rose 7.6% in May from a year ago in US dollar terms, but imports rose just 1.8% during that time.

Domestic demand remains weak. Consumer prices in China rose 0.2 percent in June from a year earlier, beating expectations, while producer prices met expectations, data from the National Bureau of Statistics showed on Wednesday.

The core consumer price index, which strips out more volatile food and energy prices, rose 0.6% year-on-year in June, slightly slower than the 0.7% increase in the first six months of the year.

China’s National Bureau of Statistics is due to release second-quarter gross domestic product data and economic indicators for June on Monday.