We have a new President – has anything changed?

So, after a long battle regarding the elections of the new president of the Republic, we have a “new” president, Nicos Anastasiades. This right wing politician had to make all sorts of compromises in order to attract floating voters and others (around 25%) and in his effort to do this, he has made all sorts of promises regarding subsidies and handouts, that reminded us of the former president Demetris Christofias (left wing-Communist) who in his efforts to become more popular brought the Cyprus economy almost to bankruptcy.

It appears that our politicians do not learn that going out for a spending spree may attract some, but scares many others who do not appreciate this and put a minus on a president who in his effort to be elected, does not necessarily pay full attention to the sustainability of the Cyprus economy and its effects, as long as he gets elected.

As far as the Cyprus political situation is concerned, both second round candidates agreed on the parameters and this is “good” news in the sense that both agree on the principles of the political solution. On the other hand, the elected president does not have a majority in the House of Representatives and he will have an almost impossible task to get bills through. It appears that major issues, such as the re-organisation of local government, the union demands and various other bodies always asking for more will not be supported by the middle of the road party, which seems to have a personal grudge against the new president, an empathy which is personal and not healthy. So, expect trouble in the economy ahead.

As regards the Cyprus economy, which is based on tourism and property development/sales to the foreign market, I do not foresee any particular problems, but regarding other items and regarding the demand for cost of living indexation to be reintroduced, is the result of the sickening competition between political parties, who will test the economy regardless.

This situation might place the Cyprus economy in danger and just as well that we have the E.U. and the international rating bodies to warn us about it and the dangers that might follow.

The non-performing loans (NPLs) is a major issue and so far the previous government has made some efforts to assist towards this problem, but is this a problem that we can see a major improvement over the coming years? Doubtful, but the efforts are there and the encouragement of the increase of loans and the better management of the financiers’ balance sheet are some indicators.

A negative development will be the possible departure of the Bank of Cyprus CEO John Hourican, who, although I understand is not staying beyond 2018, he came to know us Cypriots and our way of thinking and for a new one to come on board must have similar talents. No one is irreplaceable but it is a point to note.

Of course much of the improvement of the Cyprus economy will depend also on the gas finds, which might be most helpful, but it will take a few years from now (if we find a feasible volume) for this to materialise.

A case for scholars should be in hand for everybody to study.

Another loss will be if the Finance Minister Haris Georgiades decides to leave the new government and for the same reason, it was a loss with the ex-minister of Interior, Socratis Hasikos, whose forceful nature on real estate and other issues is missed. It is a fact that ministers place their own “stamp” on matters and it is important to note who the new people will be. Who on earth knew the outgoing Minister of Health, Yiorgos Pamborides, who has moved the National Health Scheme (GESY) far more than where the previous three ministers have failed? We need a person like him for at least another five year period to make the system work.

What to expect from the new government regarding the building/real estate industry?

- Improvement of the procedures regarding the issue of permits (study with details submitted by us).

- Limitations on the red tape procedures regarding the title issues (proposal submitted by us in detail).

- Upward revision of building coefficient regarding mainly the beach plots and the results of this has been shown in the improvement of the hotel quality and the construction of new ones.

- The drastic improvement of the legal system procedures (submitted by us) is another related matter.

We have to wait and see how the new Council of Ministers members will get down to work and its initial decisions will indicate the direction that we will be leading for the next five year period.