A NCIIAL MII ROR THIISS WEEK

Financial Mirror (Cyprus) - - FRONT PAGE -

The tele­com wars has never been bor­ing, with Cyta chal­leng­ing ri­val mo­bile op­er­a­tor Areeba over its con­tract and pay monthly pack­ages, while the Cab­i­net ap­proved a ‘sta­ble’ bud­get that would see the 2005 deficit at the same level as in 2004, the Fi­nan­cial Mir­ror re­ported in is­sue 586, on Septem­ber 15, 2004.

Cyta said it was ready to match Areeba’s mo­bile phone pro­mo­tional pack­ages, as soon as the Tele­com Reg­u­la­tor gives the green light. The first area where the two telcos were ex­pected to clash was the monthly fixed con­tracts, with Areeba of­fer­ing

Just as Cyprus was try­ing to break into the CIS mar­kets, the Cen­tral Bank of Cyprus suc­cumbed to pres­sure from its coun­ter­parts in Moscow and banned ad­ver­tis­ing by Cyprus com­pa­nies in Rus­sia, the Cyprus Fi­nan­cial Mir­ror re­ported in its is­sue 77, on Septem­ber 21, 1994, while in other news, the business cham­ber KEVE was call­ing for more lib­er­al­i­sa­tion to boost the econ­omy.

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The Cen­tral Bank has clamped down “ag­gres­sive” ad­ver­tis­ing tac­tics of Cypriot pack­ages from CYP 4 to 29, while in­clud­ing sub­sidised prices on phone de­vices.

The Coun­cil of Min­is­ters ap­proved a ‘sta­bil­is­ing’ bud­get for 2005, with Fi­nance Min­is­ter Makis Ker­avnos say­ing that the em­pha­sis was on de­vel­op­ment projects, while main­tain­ing the so­cial wel­fare. The bud­get forecasts to­tal rev­enues marginally lower at CYP 2.72 bln, while spend­ing is mildly up at CYP 3.55 bln, cre­at­ing a deficit of CYP 827 mln or 5.8% of GDP. While ef­forts were un­der­way to re­duce the deficit to 2.9% of GDP, Ker­avnos said no new posts will be cre­ated.

Real GDP growth ac­cel­er­ated again in the sec­ond quar­ter, reach­ing 4.1% year on year in April-June after 3.6% in the first quar­ter. This is the fastest pace of growth since the fourth quar­ter of 2001 and a shade above the seven year av­er­age of 0.8%, pro­fes­sional forms in Rus­sia and has ef­fec­tively placed a ban on di­rect ad­ver­tise­ments in the Rus­sian me­dia. Cypriot ac­coun­tants and au­dit firms hav been told to keep a low pro­file and re­strain them­selves from ad­ver­tis­ing in Rus­sia pro­mot­ing Cyprus as on off­shore base. Rus­sian au­thor­i­ties re­cently warned House Pres­i­dent Alexis Gha­lanos that they were un­happy with the fact that a large num­ber of of off­shore com­pa­nies were be­ing es­tab­lished and that many were ex­port­ing funds out of Rus­sia.

The Cham­ber of Com­merce called for mea­sures to be in­ten­si­fied to en­cour­age an even­tual ad­mis­sion to the Euro­pean Union and lib­er­al­i­sa­tion of the econ­omy. KEVE Pres­i­dent Phanos Epiphan­iou called for a joint body to be set up to help co­or­di­nate driven by con­struc­tion, whole­sale and re­tail trade, real es­tate, tourism, fi­nan­cial ser­vices and man­u­fac­tur­ing.

The tax amnesty pe­riod of­fi­cially be­gan on Septem­ber 6 with the first stage ex­pected to con­tinue un­til De­cem­ber 4, for the con­tri­bu­tions of 5% on un­de­clared in­come and prof­its earned up to the end of 2002. The sec­ond stage will run un­til the end of the year and will carry a 6.5% levy. The aim is to raise some CYP 50 mln.

House prices in Au­gust rose 2.9% ac­cord­ing to the Buy­Sell Home Price In­dex, de­vel­oped by Stelis Platis. The in­dex was up 8.6% un­til the end of June with an an­nu­alised gain of 17%.

Cyprus Air­ways said it is to cut flights to War­saw, Bu­dapest and Birm­ing­ham in a drive to cut costs, while flights to Jed­dah and Riyadh are un­der re­view. The air­line had re­ported net first half losses of CYP 25 mln har­mon­i­sa­tion ef­forts.

The draft rules on the op­er­a­tion of the of­fi­cial stock mar­ket by the new CSE Coun­cil have been de­layed by a month, said its pres­i­dent Di­nos Pa­padopou­los.

The rea­son was that some or­ga­ni­za­tions had not yet re­sponded with their com­ments on the fu­ture im­pact of the draft rules on the smooth op­er­a­tion of the stock ex­change. He added that there was a time limit that the CSE could wait and ex­pected re­sponses by a few days or a week at most.

To­tal ex­ports surged 23.4% to CYP 153.1 mln in the first four months of the year, but the mer­chan­dise trade deficit con­tin­ued to ex­pand and rose by 5.1% to CYP 331.7 mln. The EU re­mained the main trad­ing part­ner rep­re­sent­ing 51% of to­tal im­ports and 54% of ex­ports.

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