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CBC Governor: Cyprus Banking System On Positive Course But Vigilance Required

by THEFUTURE.TEAM

August 6, 2024

In a recent address, the Governor of the Central Bank of Cyprus (CBC) emphasised that the country’s banking system is on a positive trajectory, showcasing resilience and recovery. However, he cautioned against complacency, underscoring the need for ongoing vigilance and prudent management to sustain this progress. This balanced perspective reflects the complexities of navigating the post-crisis economic landscape and highlights the critical factors influencing Cyprus’ financial sector’s future stability and growth.

The CBC Governor’s optimistic outlook is grounded in several key indicators of banking sector health. Notably, there has been a marked improvement in the quality of assets held by banks, a decline in non-performing loans (NPLs), and an increase in capital buffers. These developments result from rigorous regulatory measures and strategic reforms implemented over the past decade, aimed at fortifying the financial system against future shocks.

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A significant factor contributing to this positive course is the reduction in NPLs, which posed a substantial challenge for Cypriot banks in the aftermath of the financial crisis. The concerted efforts to resolve and manage bad debts have borne fruit, significantly lowering the NPL ratio and restoring confidence in the banking sector. This progress is crucial, as high levels of NPLs can severely constrain a bank’s ability to lend, thereby stifacing economic growth.

Moreover, the increase in capital buffers has fortified the banks’ capacity to absorb potential losses, ensuring greater stability and resilience. Enhanced regulatory frameworks have mandated higher capital requirements, promoting a culture of cautious risk management and financial prudence. This shift not only safeguards the banking sector but also builds trust among depositors and investors, fostering a more robust economic environment.

Despite these positive developments, the CBC Governor’s warning against complacency is well-founded. The global economic environment remains uncertain, with potential risks such as geopolitical tensions, inflationary pressures, and the ongoing impacts of the COVID-19 pandemic. These factors could pose significant challenges to the stability of the banking system if not carefully monitored and managed.

For Cyprus, maintaining the momentum of banking sector recovery requires a continued focus on several strategic areas. Firstly, there is a need for sustained efforts in digital transformation. Embracing advanced technologies can enhance operational efficiency, improve customer service, and mitigate risks associated with cyber threats. Cyprus’ banking sector must continue to innovate and adapt to the rapidly evolving digital landscape to remain competitive and resilient.

Secondly, enhancing the regulatory framework remains imperative. Ongoing adjustments to regulatory policies should aim to address emerging risks and ensure alignment with international standards. This proactive approach will help preempt potential vulnerabilities and reinforce the sector’s overall health.

Lastly, fostering a culture of prudent lending and robust risk management is essential. Banks must prioritise sound lending practices and maintain stringent credit assessment processes to prevent the accumulation of bad debts. This approach will ensure that the banking sector remains a pillar of stability and a catalyst for sustainable economic growth.

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EU Mercosur Agreement Sparks Political Battle Over Cyprus Agriculture

by THEFUTURE.TEAM

January 16, 2026

A political battleground emerged in the Parliamentary Agriculture Committee’s latest session, as fierce debates broke out over the controversial trade deal between the European Union and Latin American nations under the Mercosur framework. Lawmakers voiced deep concerns regarding food safety and the prospects for local agriculture, particularly following the high-profile absence of the Minister of Trade.

Minister Absence And Parliamentary Integrity

Committee Chair Giannakis Gabriel expressed strong disapproval over the Minister’s no-show, noting that the extraordinary session was scheduled at midday at the Minister’s own request. “His absence undermines the authority of the parliament,” Mr. Gabriel declared. Given that the Minister is not abroad, it was expected that he would be present to clarify why Cyprus supported an agreement widely criticized as disadvantaging the agricultural sector.

Trade Deal Under Scrutiny

In his address, A.C.E.L General Secretary Stefanos Stefanos described the pact as a “dangerous agreement” imposed under the pressure of multinational conglomerates. He especially critiqued the contrasting sanitary standards whereby, while the EU bans our farmers from using certain pesticides and antibiotics, the Mercosur deal appears to allow imports produced with these very substances. His remarks underscored the possibility of double standards in safety measures and the potential long-term impacts on Cypriot agriculture.

Economic And Safety Concerns

Legislators questioned the basis of government studies that justified backing the agreement, even as Cyprus’ agricultural sustainability is increasingly threatened by water scarcity and soaring production costs. Representatives from various political factions pointed to insufficient controls over import volumes and tariff structures. For example, Christos Orphanidis (DIKO) demanded precise data on imports from Latin America, citing honey as a case in point, and pressed for clear explanations regarding the tariff regime.

Legal And Health Implications

Questions about legal authority were raised by Elias Myriantounos (EDEK), who inquired whether parliament can reject or amend the agreement should economic studies forecast negative outcomes. Environmental advocates, like Haralambos Theopemptou of the Movement of Ecologists, emphasized the need to safeguard traditional products such as halloumi, highlighting concerns over how rigorous food safety controls will be maintained. Meanwhile, Linos Papagiannis (ELAM) cautioned against unfair competition, drawing parallels with challenges posed by lower-standard goods from occupied territories.

Protecting Local Interests

The overarching message from lawmakers was clear: the future of Cyprus’ farming community and the well-being of its citizens should not be sacrificed at the altar of commercial trade. Agricultural organizations have voiced alarm over the importation of goods potentially contaminated with banned substances, the risk of market distortion by low-quality products, and the lack of localized impact studies. They argue that the agreement is biased in favor of select corporate interests, ultimately undermining consumer safety and the livelihood of European farmers.

As this debate continues to unfold, the outcome of these deliberations will be pivotal in determining not only trade policy but also the long-term economic and food security landscape of Cyprus.