Sapienta Cyprus Selection 23 Jun 2023
Regular Cyprus-relevant links
Welcome to Sapienta Cyprus Selection, a regular selection of links to articles of medium- to long-term relevance to people living and doing business in Cyprus. Topics marked with * will be, or already have been, analyzed in our monthly issues of Sapienta Country Analysis Cyprus. Sapienta Cyprus Selection is part of the Sapienta Cyprus Snippets series. Learn more about the different subsections here.
UK property. The UK rental market is in a classic supply squeeze. Rents rose by 5% in the 12 months to May, which is the fastest pace of growth on record according to the latest data from the UK’s Office for National Statistics (ONS). The reason: rising interest rates have pushed many buy-to-let landlords to sell: “there has been an increase in the number of buy-to-let landlords looking to sell their properties”, said ONS. Relevance to Cyprus: Many Cypriots have relatives in the UK, property in the UK or children studying there. If you are flush with cash and have the patience to deal with the buy-to-rent market, then this is probably a good time for you, as landlords are keen to sell. But if you are sending your children for studying, life just got more expensive (again).
Anti-money laundering (AML).* Coordination at EU level on anti-money laundering measures and going after assets, including crypto currencies, is intensifying. The European Union Agency for Criminal Justice Cooperation (Eurojust) had its first “major meeting of high-level experts on Money Laundering and Asset Recovery” on 19 and 20 June. Relevance to Cyprus: The sanctions imposed on Cypriot companies and individuals have spooked the professional services sector in Cyprus and prompted the government to implement a range of new measures which we discussed in our May issue of Sapienta Country Analysis Cyprus.
Turkey-Israel energy relations.* The Times of Israel reported last week that Israel’s prime minister, Benjamin Netanyahu, was trying to arrange a meeting with Turkey’s president, Recep Tayyip Erdoğan, but added “some sources say Turkish president will only meet PM if he brings word on advancing gas trade”. Article source here (you might hit a paywall but you can get the snippet about gas from Twitter here). Relevance to Cyprus: outside of Cyprus you hear a lot of scepticism about whether gas from Israel to Cyprus is commercially viable. So are we heading for a scenario in which Cyprus is left out of regional deals because the economics of Turkey gas trade works better for Israel? Or are we heading for a scenario in which Israel brokers a gas deal involving Israel, Turkey and Cyprus? My personal preference would be to add Greece too, as I think it would make everyone feel a bit more comfortable. It would also give the president, Nikos Christodoulides, the carrot he needs to get the EU more politically involved in Cyprus’ security issues and, by association, the Cyprus problem. I plan to do a longer article on that in early July.
Turkish lira.* The slide in the Turkish lira does not seem to be over. Turkey’s new central bank governor, Hafize Gaye Erkan, jacked up the main interest rate from 8.50% to 15% on 22 June but this was lower than the 20% or so that what was expected. Before the decision, the lira had not quite dropped to 26 lira per euro but soon breached that threshold after the decision. Relevance to Cyprus: as noted in the last Sapienta Cyprus section, it is better for Cyprus’ security that Turkey avoids an all-out crisis.
Have you seen the Sapienta Cyprus Reflections series?
· How to bring the people into a Cyprus peace process, 18 May 2023
· Three mega trends to define the decade, 11 May 2023
· Cypriots and sanctions: lessons for other professionals in Cyprus, 18 Apr 2023
· Cyprus and security: it’s time to change the toolbox, 14 February 2023
· What do we know about Turkish Cypriot banks? 4 January 2023
· How much is Russian business worth to Cyprus? 12 December 2022
· The amazing Cyprus growth machine 17 November 2022
You can find a full list of my posts here.