Sapienta Cyprus Selection, 28 Mar 2023
Regular Cyprus-relevant links
Photo taken by author.
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.
E-cars. The classic combustion engine was due be phased out by 2035 but Germany has negotiated an amendment to the phase-out to allow the manufacture of engines that will run on e-fuels (carbon-neutral fuels). Article by Reuters here. In some ways this adds to the huge dilemma facing those with the resources to buy a new car. Which fuel-type will make the car affordable to run in 10 years’ time or sellable as a second-hand car: electric only, plug-in hybrid, e-fuel? Only the future will tell. Relevance to Cyprus: Laws are already coming to Cyprus that will restrict from 2025 where you can drive or park depending on your fuel-type. Let’s hope a first-rate public transport system will be in place by then for those who can’t afford the new cars.
Greece-Turkey relations*. I have noted a thawing of relations between Greece and Turkey in earlier editions. This went even further on 20 March, when they announced a deal whereby Greece will support Turkey’s bid to chair the International Maritime Organization (IMO) while Turkey will support Greece’s bid for a rotating seat on the UN Security Council. This is despite the fact that Turkey still blocks ships flying the Republic of Cyprus flag or managed from Cyprus from docking in Turkish ports. Article from Kathimerini here. Relevance to Cyprus: once upon a time it was said that, when it came to foreign policy affecting Cyprus, the doctrine was “Cyprus decides and Greece follows”. This is clearly changing and probably means that the Republic of Cyprus needs to start strategizing about how it can benefit from an environment in which Greece and Turkey want to do deals with each other.
Israeli government. Israel has had multiple elections in recent years and I wonder if another is coming after the prime minister, Benjamin Netanyahu, was forced on 27 March to postpone his plans for judicial reform. The plans prompted tens of thousands to come out in protest and led to a general strike that closed the main airport. Article from Sky News here. Relevance to Cyprus: The Republic of Cyprus consolidated its growing relations with Israel during Mr Netanyahu’s previous premiership. On the other hand, as regards the dispute over the Israeli Yishai natural gas field that shares a reservoir with Cyprus’ Aphrodite field, more practical progress was made under the previous, non-Netanyahu Israeli government. Relations are therefore likely to remain close.
Eurozone economy. Demand for services in the eurozone has been stronger than expected according to data released on Friday but demand for manufacturing is weaker. Report from Reuters here. Relevance to Cyprus: a stronger eurozone economy is good for the tourism sector but for borrowers it also means that the European Central Bank (ECB) could continue raising interest rates.