Cyprus Eyes United Arab Emirates Partnership On Landmark Subsea Cable Project

by THEFUTURE.TEAM

September 9, 2025

Strategic Political Engagement

Cyprus has turned to the United Arab Emirates as it looks to forge a stronger cooperative bond to develop an ambitious EU-financed subsea power cable. This initiative, designed to link Europe with the eastern Mediterranean, underscores Cyprus’ unwavering backing of the project. In a recent meeting, Cypriot President Nikos Christodoulides and his foreign minister held discussions with UAE leadership to explore the potential for joint investment and broader collaboration in related sectors.

Investing In Infrastructure and Future Growth

The dialogue marks a notable step forward in international energy infrastructure, paralleling the vigorous political interest in regional connectivity. The discussions come in the wake of remarks from Greek Prime Minister Kyriakos Mitsotakis, which prompted Cyprus to elaborate on its strategic plans. A partnership with the UAE could not only inject fresh capital into the project but also signal robust, multinational support in an era when energy security and sustainability are paramount.

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Technical Milestone With Global Implications

At a length of 1,240 km and reaching depths of 3,000 metres, the cable – currently under construction by Greek transmission operator Admie – is poised to become the world’s longest high-voltage and deepest subsea link. Building on nearly a decade of groundwork by Cyprus-based developers, the project now navigates complex financial and operational challenges, including clarifications on overall cost, viability, and accountability for delays.

Regulatory Hurdles And Future Outlook

Adding to the scrutiny, European prosecutors recently initiated an investigation into potential criminal offences related to the €1.9 billion venture that aims not only to connect Cyprus with Greece but also extend to Israel. Despite these challenges, the trilateral support from Cyprus, Greece, and Israel is a robust testament to the project’s strategic importance and its potential to reshape regional energy dynamics.

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ECB Raises Deposit Facility Rate For First Time In Nearly Two Years

by THEFUTURE.TEAM

June 15, 2026

Economic Shift: ECB Reverses Years Of Declining Rates

The European Central Bank (ECB) confirmed its first interest rate increase in nearly two years, raising the deposit facility rate in response to inflationary pressures and geopolitical uncertainty. Marking a shift in monetary policy, the move follows a period of rate cuts aimed at supporting economic activity and easing financing conditions.

Reevaluation Of Bank Liquidity Strategies

Although the immediate impact will be felt by only part of the borrowing market, the decision carries broader implications for banks. During the period of lower rates, banks maintained significant amounts of excess liquidity with the ECB as returns on these funds declined alongside deposit rates. With the deposit facility rate increasing by 0.25 percentage points to 2.25% from 2.00%, returns on surplus liquidity are expected to improve.

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Higher interest rates, however, could also increase borrowing costs and influence lending conditions across the banking sector.

Transitioning Investment Approaches And Market Dynamics

Banks had already begun diversifying the use of excess liquidity through investments in bonds and by expanding lending activities.

Successive reductions in the deposit facility rate from 3.00% at the end of 2024 through four consecutive cuts in early 2025 reflected a more accommodative policy stance as inflation pressures moderated.

Sectoral Impact And Future Outlook

Data from the ECB’s 2025 monetary policy report show that liquidity in the Cypriot banking system declined from €19.2 billion at the end of 2024 to €18.6 billion by the close of 2025. Despite the reduction, liquidity levels remained elevated. Outstanding loans increased from €27.6 billion to €31.7 billion, while deposits recorded a slight decline. Customer deposits continued to account for the vast majority of funding. By the fourth quarter of 2025, they represented 95% of total liabilities, highlighting their importance as the banking sector’s primary source of financing.

Changes in ECB rates are expected to influence how banks manage liquidity and allocate capital as monetary conditions evolve.

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