ANCIIAL MII ROR THII WEEK

Financial Mirror (Cyprus) - - FRONT PAGE -

cor­po­rate gov­er­nance.

Eq­uity prices on the Cyprus Stock Ex­change surged another 1.5%, reach­ing lev­els not seen in eight months, as in­vestors con­tin­ued to flock back to the mar­ket. The CSE Gen­eral In­dex closed at 78.09 for a daily gain of 1.48% and year-to-date gains of 7.6%. The most ac­tive stocks were Bank of Cyprus (CYP 1.58), Laiki (1.20), Louis (16.1c), Hel­lenic Bank (40.6c) and CLL (4.2c).

The EU Fi­nance Min­is­ters (Ecofin) meet­ing en­dorsed a pro­posal by the Com­mis­sion, freez­ing dis­ci­plinary ac­tion im­posed on Cyprus be­cause of its high deficit, which was en­acted since July 5, 2004. Fi­nance Min­is­ter Makis Ker­avnos said that the Com­mis­sion be­lieves that the Cyprus econ­omy “is de­vel­op­ing in the right di­rec­tion and within the frame­work set out by the Con­ver­gence pro­gramme. He added that “with the pos­i­tive de­vel­op­ments in our econ­omy we will join the Ex­change Rate Mech­a­nism II the soon­est pos­si­ble.” Pre­vi­ously, Cyprus had come un­der crit­i­cism by the Com­mis­sion for al­low­ing fis­cal deficit to reach 6.3% of GDP in 2003.

Cyprus has failed to take ad­van­tage of its EU mem­ber­ship to trans­form the is­land into a re­gional hub for business, a prob­lem which is ex­ac­er­bated by its poor im­age and cred­i­bil­ity abroad, ac­cord­ing to Euro­pean Par­lia­ment mem­ber Ioan­nis Cas­soulides.

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The num­ber of un­em­ployed in 2004 reached 3.6% of the labour ac­tive pop­u­la­tion com­pared with 3.5% the year be­fore, Labour Min­is­ter Chris­tos Tali­adoros said. As es­ti­mated on an EU-wide ba­sis, un­em­ploy­ment was higher at 4.3% of the labour force, up from 4.1% the year be­fore.

Cyprus faces an acute risk of power short­age in 2007 and black­outs in 2008, if the EAC does not pro­ceed to in­crease out­put, reg­u­la­tor Costas Ioan­nou said. EAC plans to build a fourth unit at a cost of CYP 100-500 mln that would op­er­ate on crude oil un­til nat­u­ral gas is im­ported. A liq­ue­fac­tion plant to con­vert LNG to us­able gas would cost the EAC a fur­ther CYP 150 mln.

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