Construction workers threaten strike action

Nigel Howarth
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8

CONSTRUCTION and ready mix concrete workers are set to hold a 24-hour token strike on February 14th as a first step in their response to “attacks on wages and benefits from a large number of employers”.

The unions accuse the Cyprus Federation of the Building Contractors Associations (OSEOK) of firing long-serving unionised builders and replacing them with cheap, non-unionised foreign labour.

Meanwhile, figures released by Eurostat earlier today showed that unemployment levels in Cyprus reached an unprecedented 9.3% at the end of last year and grew at a faster rate than all other countries in the EU27, with the exception of Greece.

The highest unemployment rate is among those under 25, where it has reached 25.8%; even highly educated young people cannot find employment.

Cyprus one of five Eurozone nations cut by Fitch

Alan Lawton
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0

FITCH, the third-largest rating agency, downgraded the sovereign credit ratings of Cyprus from BBB to BBB-; Italy to A- from A+; Spain to A from AA-; Belgium to AA from AA+ and Slovenia to A from AA- on Friday.

All of the ratings were given negative outlooks, indicating there is 50 percent chance of further cuts in the next two years.

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In its statement on Cyprus, Fitch said that “the one-notch downgrade of the sovereign rating mainly reflects the Cypriot banks’ large capital need in light of the Greek debt restructuring expected this quarter.

Fitch estimates that the amount needed to recapitalise the three largest banks to a Tier 1 ratio of 10% following a 50% haircut on Greek government bonds amounts to €0.9bn or 5% of GDP. A 70% haircut would require €1.7bn or 9.9% of GDP. The now higher likelihood of a haircut in the 50%-70% range, compared with Fitch’s view in August, when a 20%-30% haircut was the agency’s baseline, is the primary reason for the rating downgrade

 As the Cypriot banks are large holders of Greek government bonds, the potential capital requirements will be correspondingly high. Fitch believes it is highly uncertain whether the necessary funds will be found in the private sector or whether government assistance for certain institutions will instead be required to meet such capital requirements. This would increase the government debt/GDP ratio and might require external assistance.”

Finance Ministry response

Cypriot economy has excellent prospects for the future

The economy of Cyprus is based on solid foundations and has excellent prospects for the future, the Ministry of Finance stressed in a press release issued as a response to Fitch Rating Agency’s decision on Friday to downgrade the Cypriot economy.

The Ministry of Finance in its announcement points out that despite Fitch’s decision, Cyprus remains within the acceptable investment area.

Furthermore, it notes that “despite adversity and negative external influences, the Cypriot economy is based on solid foundations and shows excellent prospects for the future”.

“The ability, openness, hard work and flexibility of the business people, together with the high quality level of the workforce and the social cohesion of Cyprus constitute today, as they have in the past, the cornerstone of Cyprus’ economic progress,” the Finance Ministry states.

It notes that with this in mind, the government of Cyprus, in collaboration with the private sector, will soon promote a package of development measures.

Furthermore, it stresses that the Ministry, in collaboration with the Central Bank of Cyprus, systematically monitors the management of challenges in the financial system.

The Ministry of Finance expresses conviction that banking institutions will be able to implement their plans to obtain the funds needed, with their own actions.

“The Ministry’s faith to the banking system in Cyprus is proved in practice by its systematic deposits in banks,” it is noted.

It adds that on the day Fitch decided to downgrade Cyprus’ economy, the Ministry of Finance was auctioning treasury bills with banking institutions which offered 164% of the amount requested by the Ministry.

As regards the cost of living allowance (COLA), the Ministry notes that through a constructive social dialogue the necessary changes will be achieved, while respecting social justice.

Department of Land and Surveys Citizens Charter

Nigel Howarth
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10

THE Department of Lands and Surveys provides services related to immovable property in Cyprus, including land surveying, cartography, registration, transfer and mortgage of property and the ownership of land.

Amongst other aspects, the latest issue of the Department’s ‘Citizen’s Charter’ published earlier this month, contains information about ‘The Sale of Land (Specific Performance) Law No. 81(I)/2011’ that came into force on 1st August 2011. This includes details of “Vesting Contracts” by which a property that has yet to be issued with its Title Deed may be sold without the involvement of its registered owner.

“Vesting Contracts” overcome the problems whereby unscrupulous developers demand outrageous sums of money from those wishing to sell a property before its Title Deed has been issued.

The latest issue of the ‘Citizen’s Charter’ advises potential buyers to proceed with “a lot of caution“ and provides a checklist to help them avoid some of the more obvious pitfalls.

Download the Department of Lands and Surveys ‘Citizen’s Charter’ (87 pages).

Note that the information contained in the Charter does not constitute full and detailed interpretation of any Laws or Regulations. For more information, you are advised to contact the Lands Offices in each District, or the Department of Lands and Surveys website.

Title Deeds hopes dashed by latest property legislation

Lucie Robson
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16

PEYIA Coalition of Independents politician Linda Leblanc is meeting the chairman of the House Legal Affairs Committee next Monday over confusing laws which could scupper property owners’ chances of obtaining their title deeds.

According to Leblanc, Land Registry is refusing to accept deposits of Contract of Sales for a number of properties in what is known as Plot One in Coral Bay partly owing to the fact that none of the 155 leasehold properties are subdivided.

The legal requirement is related to recently-introduced amnesty measures aimed at releasing thousands of title deeds and cleaning up Cyprus’ tarnished property market image.

“The Sale of Land Law helps to protect the rights of property purchasers, as depositing a contract of sale at the Land Registry effectively prevents the vendor from selling the property in question to someone else or changing his mind about the sale,” Leblanc explained.

“A new law entitled ‘The Sale of Immovable Property (Specific Performance)’ was approved by Parliament and came into force on July 29, 2011. Any contracts of sale that were signed and that have not been lodged at the Land Registry may be filed within six months from the July 29, 2011. The deadline to lodge any contracts is January 29 this year.

For example, if a buyer signed a contract of sale in 2005 but failed to file it at the Land Registry, there has now been a six-month window of opportunity to do so.”

But Leblanc says that it is not clear if leasehold property is covered by the law.

“If not, over 155 buyers in Coral Bay, the Harbour Shore Estates (HSE) will be greatly disadvantaged. Some buyers of this leasehold development applied under the Amnesty Law but have now discovered their sales contracts are not registered at the Land Registry even though many of them, through their lawyers, have paid transfer fees and have Land Registry receipts.”

Leblanc said that homeowners are now being told that this is only an “Intent to Register”.

“Because of this, they are also now having problems with their amnesty applications, which apparently require a sales contract registered with the Land Registry. If they cannot now register their sales contracts with Land Registry under this new law, they are left totally without any protection,” she said.

Leblanc, who is one of the residents of the plot, only found out by fluke prior to Christmas that the necessary contract had not been accepted and claims that her situation is not isolated.

Green Party MP George Perdikis has been contacted by Leblanc to canvass the House for an extension on the deadline while the legal issue is clarified.

However, it is unlikely at this stage that this will be granted.

The next step is to meet with House Legal Affairs Committee chairman Ionas Nicolaou, in order to make “the seriousness of the situation clear,” Leblanc said.

“This can be resolved with political will.”

The Cyprus Weekly contacted Harbour Shore Estates about the matter but nobody was available for comment.

Last year the government amended laws on town planning and introduced an amnesty enabling property-owners who, owing to minor building irregularities, have not been granted a certificate of approval for their property and consequently title deeds to legalise their Cypriot property.

Cost of housing loans may increase

Editorial
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9

THE liquidity condition in the domestic and European market keeps the cost of deposits high, forcing banks to readjust their lending rates.

The ECB rate cuts are no longer popular in the domestic lending market, which still suffers from the uncertainty from the Greek crisis.

The changes in the interest rate policy of the banks affect the existing loans rather than the new since banks avoid new exposures to housing credit.

Even in cases that a household’s income is regarded as stable, banks are still hesitant, causing difficulties to the property market, where activity returned to pre-boom levels.

In the past six months, housing loans to Cyprus residents have showed stagnation to €12.2 billion.

Hesitation in granting new housing loans is more intense than that of 2009, when economy was in recession again.

Total housing loans to Cyprus residents in 2009 stood at €1.9 billion while in the first eleven months of 2011 they did not exceed €0.3 billion.

Avoiding new lendings, banks turned to the existing housing loans and started preparing their customers for new rate hikes.

“Due to the negative developments, we are forced to proceed with a new increase in the rate margins for loans allocated pursuant to the provisions of the relevant contracts”, a bank letter to customers said.

Similar moves are made by other banks with increases that might reach 55 base points.

Lending conditions will deteriorate in 2012 due to the capital challenges that the banks face.

Bankers expect that both offer and demand of housing credit will drop in 2012, intensifying pressures on the property market.

EU congratulates Cyprus on measures

Editorial
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8

SPEAKING to the Cyprus News Agency on the sidelines of the Euro-zone Finance Ministers’ meeting, Cyprus Finance Minister Kikis Kazamias said Rehn congratulated Cyprus on adopting tough decisions that would allow the country to overcome the difficult situation it was facing. Draghi agreed with that position, Kazamias said.

“In a short period of time and in a decisive manner, Cyprus has adopted measures that are considered very satisfactory to help reduce the budget deficit”, the European Commissioner said, according to Kazamias.

During the meeting of the Euro-zone Ministers, the representatives of the countries that have implemented the Commission’s recommendation were invited to make an intervention. This included Cyprus too.

The Minister recalled that based on the difficult situation Cyprus was facing, the European Commission sent a letter on November 11 warning Nicosia with sanctions. Kazamias, as he stated to the Cyprus News Agency, thanked the Commission for the letter of November 11, noting that it was catalytic in creating political consensus that formed the basis upon which the government founded its arguments for the proposal on the austerity measures.

The Minister also told the Cyprus News Agency that during the meeting he referred to the measures that allowed Cyprus to decrease the budgetary deficit by 3.5% in 2012, compared to 2011.

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