Cyprus Mail www.cyprus-mail.com
Thursday, April 11, 2013
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CYPRUS
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Cabinet freezes rents for two years
‘Test tube baby’ pioneer Edwards dies
Happy, healthyy Tiger eyes Masters victoryy 29
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Cyprus may sell its excess gold Draft document says it’s agreed but Central Bank says issue not raised
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YPRUS has agreed to sell excess gold reserves to raise around €400 million to help finance part of its bailout, according to an assessment of the island’s financing needs prepared by the European Commission, revealed yesterday. The draft assessment, referring to the gold sale, obtained by Reuters, also said that Cyprus would raise €10.6 billion from the winding down of Laiki Bank and the losses imposed on junior bondholders and the deposit-forequity swap for uninsured deposits in the Bank of Cyprus. Nicosia would get a further €600 million over three years from raising the corporate income tax rate and the capital gains tax rate. Out of the total Cypriot financing needs of €23 billion between the second quarter of 2013 and the first quarter of 2016, the eurozone bailout fund will provide €9 billion, the International Monetary Fund €1 billion and Cyprus itself will generate €13 billion, the assessment said. The Central Bank of Cyprus (CBC) said last night however that selling the island’s gold had not been on the table. “Such an issue has not been raised, has not been discussed and is not being discussed at the moment,” CBC spokeswoman Aliki Stylianou said. Stylianou added that sale
of the gold was a matter handled exclusively by the CBC board. The sale plan, set out in a draft assessment of Cypriot financing needs prepared by the European Commission, would be the first major gold disposal by a euro area central bank since France sold 17.4 tonnes of gold in the first half of 2009. “The amount mentioned, 10 tonnes, is not large we’ve seen that on average come out of exchangetraded funds this year every week,” Macquarie metals analyst Matthew Turner said. “But it’s the first eurozone country to have said it will do this, and the first eurozone country to sell gold, other than Germany’s coin programme, for a while.” At current prices, €400 million worth of gold amounts to 10.36 tonnes of metal. Cyprus’ total bullion reserves stood at 13.9 tonnes at the end of February, according to data from the World Gold Council. “A bearish interpretation would be, where Cyprus leads, others will follow,” Turner said. “If those others were Spain or especially Italy, they have very large reserves. But there are good reasons to think in this, as in other aspects, Cyprus is a special case.” “No country’s gold reserves are sufficient on their own to make more
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Cyprus Airways employees yesterday protested against any closure of the company
(Christos Theodorides)
Cabinet decides to keep CY for summer at least By George Psyllides THE government yesterday decided to keep national carrier Cyprus Airways (CY) flying, at least throughout the summer, but measures to restructure the company must be fully accepted by staff. “This is a crucial condition,” government spokesman Christos Stylianides said after a cabinet meeting yesterday. “Keeping the company alive with the aim of selling it to a strategic investor is based on the responsible stance of all those involved.” The measures include cutting staff
by 560 immediately, a 17 per cent cut in salaries and reducing the fleet to six aircraft from 10. Unions said the provident fund of those being laid off was not secured and there was no gratuitous compensation. SIDIKEK PEO representative Antonis Neophytou described the cabinet’s decision as blackmail. He said the matter would be discussed by the union, which will seek to hold a dialogue with the government. “If the government responds, we must agree by Saturday,” Neophytou said. Andreas Pierides, the chief of SYNIKA SEK, said it was a very serious matter that the union will decide how
to handle today. Stylianides said the measures could help in finding an investor. It was announced last week that a Chinese company was interested in buying the airline but nothing concrete has emerged so far. Middle East Airlines had also shown an interest in CY in the past. The spokesman warned that time was running out. “It is a private company and the responsibility for the consultations lies with the board. Consultations continue, the board has told the government, but time is very, very
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