The new EU budget: A missed opportunity

Finance Minister Charilaos Stavrakis begins contacts in London on Monday to attract foreign investors in what is seen as the biggest venture by the government to issue four-year bonds, worth one billion euro to international markets, in a bid to refinance the public debt expiring in 2009.

The Minister, who is in the British capital, kicks off a road show in which he will present the advantages of the Cyprus economy to investment groups or individual investors. The road show will also take the Μinister to Paris, Frankfurt and Amsterdam or Milan in three days.

The issue of the bonds, the biggest in Cyprus` financial history, will be launched off as part of the Republic’s Euro Medium Term Note (EMTN) programme and will cover 1.9 billion euro of public debt. Orders for the bonds will close on May 27.

Coordinating the issue of the bonds are the French banks “BNP Paribas” and “Societe Generale” and the British “The Royal Bank of Scotland”. Also helping in the coordination is the Cypriot Bank of Cyprus, Marfin Popular Bank and Greek “Alpha” Bank.

In remarks to the press, Stavrakis said he will stress the very good indicators of the Cypriot economy which show that the island has the highest development rate in Europe, the second lowest unemployment rate in the 27 EU member states, low inflation around 1%, healthy finances, a public debt rate which has shown impressive improvement and a robust bank system which few countries have and which does not require direct government support.

The Minister also said that the government has significant requirements in drawing capital since it will have to cover the public de4bt which expires in 2009 and 2010 and to also channel 200 million euro annually to the Social Security Fund.

Public debt was estimated at 3.6 billion euro. Government deposits at commercial banks total 1.7 billion euro and the government’s real needs for funding public debt is 1.9 billion euro.

Stavrakis also told reporters in London that the Ministry estimates the government’s tax income from Marfin Popular Bank’s will not be affected, following the announcement last week that the Bank will merged with Marfin Egnatia Bank (MEB), with headquarters in Greece.

The proposed merger of MPB into its subsidiary MEB is scheduled to be finalised on 30 June, subject to approval by each bank’s shareholders and the relevant supervisory bodies.

Stavrakis said he spoke with MPB’s Vice Chairman Andreas Vgenopoulos who assured him that neither the existing staff in Cyprus nor the bank’s work in Cyprus will be affected.

The Minister said that these assurances are a positive development. He added that the monitoring of the banking system in Cyprus is the Central Bank’s responsibility, which is an independent institution and “we should all respect”.

“I have no doubt that the Central Bank has handled the MPB issue the right way for the good of the Cyprus economy”, he concluded.

Financial Mirror, May 18, 2009|||Cyprus Finance Minister begins “Road show” in London
Show more
Show less

FIND A LAW FIRM

Popular Practices

© Accountants in Cyprus. All Rights Reserved.
Accountants In Cyprus | Accounting Portal - LogoAccountants In Cyprus | Accounting Portal - Logo