ANCIIAL MII ROR THII WEEK
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.
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.