Insider Economy All eyes on Cyprus’ next evaluation by credit rating agencies

All eyes on Cyprus’ next evaluation by credit rating agencies

Days only after an administrative court’s decision to reverse civil servants’ wage cuts and all eyes are now set on upcoming evaluations on Cyprus by international credit rating agencies.

Fitch Ratings is expected to issue its report on the Cyprus economy’ state of play on Friday.

And all this while the salary issue is pending before the Court of Appeals and measures drafted by the Ministry of Finance to counter the decision’s consequences are still under consideration.

Last October, Fitch had upgraded Cyprus’ sovereign rating to investment grade with a stable outlook as the island expected continuous growth.

This meant that no change in grading should be expected over the next 12-15 months, but of course this assessment was made prior to the crucial decision by the administrative court.

Undoubtedly, all rating agencies will now also consider the decision’s unavoidable fiscal burden in their next assessments.

And this in addition to the other important issue pointed out by all rating agencies which is the big burden on banks and the economy in general from non-performing loans in Cyprus.

Up until now, two of the big such agencies appear to be restrained in their reports. Moody’s analysts still have Cyprus two levels below investment grade.

At their last meeting on March 29, they did not issue an announcement on Cyprus and, thus, remained the toughest of the four international agencies evaluating the small EU country.

Standard and Poor’s maintained the same rating for Cyprus on March 8,  when they reassessed the credit worthiness of the Republic of Cyprus. And DBRS rating agency will issue the year’s first evaluation for Cyprus on May 17.

Meanwhile, a repetition of prudent fiscal policy measures is what the Finance Ministry is working upon in order to neutralise the impact of the court’s recent ruling.

Another discussion focusing on this issue is set to take place on Monday between the President of the Republic and parliamentary party leaders – this time in the presence of the Attorney General as well.

He is expected to inform the political leadership on the legal aspects of the matter and appeals that will be submitted.

The possibility of amending the Constitution’s Article 23 which protects movable or immovable property is to be thoroughly discussed at the meeting. Along with other serious legal issues, such as retrospective payments etc.

The administrative court’s judgment on March 29 provided that a freeze of incremental pay rises, a 3 per cent contribution to pensions, and a reduction in civil servants’ pay was in violation of article 23 regarding the protection of the right to property.

The fiscal consolidation measures affecting the public sector, passed by parliament before Cyprus agreed the terms of its 2013 bailout with international creditors, included a general wage and hiring freeze, a 10 per cent drop in hiring salaries, and a permanent up-to 12.5 per cent reduction in pay.

 

Read more:

https://in-cyprus.com/public-sector-moves-towards-e-invoicing/

 

Top Stories

Rain on the way all across Cyprus, snow on Troodos mountain

Rain all across Cyprus is on the way and so is snowfall on Troodos mountain, according to the Mediterranean island’s Met Office. The depth of...

Cyprus’ municipal solid waste per inhabitant among highest in EU

Cyprus' municipal solid waste per inhabitant is one of the highest in the EU, according to data released on Tuesday by the island's Statistical...

Help desk for “CyprusFlightPass” e-platform in operation as of Monday

A help desk assisting passengers who intend to travel to Cyprus from abroad and may have queries regarding the use of the e-platform “CyprusFlightPass”...

UK to unveil hotel quarantine plans, public told not to book vacations

Britain will announce on Tuesday whether it will bring in mandatory quarantine in hotels for some or all arrivals, the country's coronavirus vaccination minister...

Sokratis joins Olympiakos after Arsenal exit

Former Arsenal defender Sokratis Papastathopoulos has joined Olympiakos Piraeus on a deal until the end of the 2022-23 season, the Greek Super League champions...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...