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Energy Minister Endorses Party’s Continued Role In Government Amid Political Tumult

Strong Support for Government Coalition

In a recent interview with Alpha TV, Energy Minister and Vice President of the Democratic Party (DK) Michalis Damianous made his position unmistakably clear: the party must remain in the government and coalition. His remarks came during an interview with Nikos Neokleous, amidst an environment charged by political controversies.

Political Challenges and Emerging Allegations

Notably, the interview was conducted prior to the unfolding political upheaval surrounding a discredited video and allegations of undisclosed financial contributions from businessmen alleged to benefit either the government or the state. These developments have cast a shadow of uncertainty over the current administration’s handling of complex issues.

Responding to Criticism

When pressed about the recent critical statements made by DK President regarding the management of the electrical interconnection—criticism documented in recent reports—Damianous reaffirmed his stance. He asserted that, as long as the agreed governmental program is on track, the DK must maintain its role in the coalition, a position further supported by the administration’s strategy as detailed in official communications.

Collective Decision-Making and Party Discipline

When asked about the potential scenario in which the DK might oppose his view, Damianous stressed that any decision regarding government participation will be determined collectively by the party’s governing bodies. He emphasized his commitment to upholding these collective decisions, while personally advocating for the party’s continued inclusion in the coalition. His pledge is clear: should the party resolve to exit the government following the controversies, he will adhere to the collective mandate.

Reevaluating Cost Projections

During the interview, Damianous also called for updated financial analyses concerning the electrical interconnection project—a proposal previously contested by Nikolas Papadopoulos, who cited remarks from European Commissioner Jörgensen. According to Damianous, the economic parameters used in earlier cost estimates are outdated, highlighting the necessity for a revised review as the project progresses over the years.

The interview underscores the delicate balance between maintaining political alliances and addressing accountability in the midst of evolving fiscal and governance challenges.

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

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