Newsroom
Banks Play It Smart With Bonds
With easy money from European Central Bank (ECB) interest rates drying up, major banks in Greece and Cyprus saw the writing on the wall and started shifting gears in 2024. Instead of relying on interest revenues, they piled into bonds—a move that now accounts for about 20% of their balance sheets.
It’s a smart play, as long as they stick to the short game. Bonds are known for their rollercoaster volatility, but because banks can hold them until they mature, they’re not sweating short-term losses. The trick is avoiding long-term risks—because if markets turn, the fallout could be costly.
Cyprus to IMF: “Thanks, But No Thanks”
Cyprus went knocking on the International Monetary Fund’s (IMF) door for advice on managing the state payroll, but let’s just say the feedback wasn’t exactly a hit.
Among the suggestions was the abolition of the 13th salary—a move IMF experts thought made sense, given that public servants in Cyprus already earn more than their private-sector counterparts. Their thinking? Even if they lost that extra paycheck, they’d still be better off than private-sector workers who receive it.
Needless to say, this didn’t sit well with Cyprus, and the government dismissed the recommendation. Other ideas, such as phasing out the Automatic Cost of Living Allowance (ATA) and limiting pay increases, were somewhat expected, but the government appears to have its own plans in mind—and they don’t seem to align with the IMF’s playbook.
The Public Contracts Puzzle: Are We Doomed to Repeat History?
Public-private partnerships could be a game-changer for Cyprus—if only they were done right. According to the Ministry, failed public contracts have already cost the economy dearly, not just in wasted money but in missed opportunities.
The key to success? A strong legal framework, long-term planning, and a capable public sector—things Cyprus has historically struggled with. Without a proper action plan, history is bound to repeat itself.
Big Promises from Eurobank
With Eurobank officially taking full control of Hellenic Bank, its leadership is making all the right noises. At a high-profile dinner attended by the President of Cyprus, Eurobank’s management vowed stability, transparency, and resilience while setting out plans to boost investment and entrepreneurship in Cyprus.
Expectations are sky-high. Cypriots have welcomed the move with optimism, and now the pressure is on for Eurobank to deliver.
Hotel Headaches: A Desalination Dilemma
The government is rolling out incentives to help hotels set up small desalination plants, ensuring they have their own water supply amid Cyprus’ ongoing water crisis. The problem? A bureaucratic mess.
Of the 268 hotels operating in Cyprus, only 18 have been fully licensed under the 2019 legislation. That’s a shocking 7%. Without the proper paperwork, most hotels won’t qualify for the scheme, meaning a well-intentioned measure could end up making little impact.
If this turns into another missed opportunity, the government will have to answer some tough questions.
€2 Billion for Water: Cyprus' Biggest Water Plan in Decades
Cyprus is no stranger to water shortages, but the government is making its biggest move in years to address the crisis. Some say this is the largest water intervention since the South Pipeline project—and with €2 billion in planned investments, they might be right.
Key measures include:
- €1.2 billion National Investment Plan for Water Projects (until 2030)
- €66 million for four mobile desalination plants
- Two large-scale desalination plants producing 70,000 cubic meters per day
The goal? Long-term, sustainable water management—something Cyprus has struggled with for decades. If executed properly, these projects could transform the way the island handles water. If not, well… we’ve seen what happens when big plans don’t go as expected.
Final Thoughts: What’s Next?
From banks hedging their bets to Cyprus brushing off the IMF, the week’s headlines show a country navigating change on multiple fronts. Water security, financial stability, and public sector reform are all in the spotlight—but whether these big plans turn into real progress remains to be seen.
One thing’s for sure—the stakes have never been higher.
