ECONOMY

In Brief

Cyprus to decide on ERM application by year-end NICOSIA (Reuters) – Cyprus will decide by the end of the year on the timing of its application to join the European exchange rate mechanism (ERM2), Finance Minister Makis Keravnos said yesterday. «Before the end of the year, there should be a conclusion on how to handle this matter and what will be the specific date when we would want to raise this issue (with European counterparts)… Our aim for admission to the eurozone is 2007, this has not changed,» Keravnos said. Countries wishing to adopt the euro must keep their currencies within the ERM currency grid for at least two years. Of the 10 countries which joined the EU in May, three – Estonia, Lithuania and Slovenia – have already entered ERM2. Cyprus announced an economic convergence program in June calling for sweeping budget savings and including proposals for wage moderation in the public sector. Its ERM2 bid will be influenced by how public finances react to the plan. Keravnos and Christodoulos Christodoulou, the central bank governor, said they were showing encouraging signs of improvement. «The results so far from the adoption of the measures are satisfactory,» Christodoulou said. Smokers to bear the brunt of changes in indirect taxation The special consumption tax on alcohol will remain as it is and there will be no transfer of any goods and services from the 8 percent to the 18 percent VAT class before the European Commission agrees to it, a senior Finance Ministry source said yesterday. The only recommendation by a special committee reporting on taxation reform, which has been adopted by ministers, is the one concerning the method of taxing tobacco, he added. The ministry intends to introduce floor and ceiling prices for cigarettes prices in order to establish a balance in competition. The minimum price will be around 1.50-1.70 euros per pack of 20 but the ceiling price has not been decided yet. The measure seems to be largely the result of pressure by the big manufacturers in the sector, claiming unfair competition by smaller producers who have recently launched new brands for as little as 80 cents a pack. Albanian tourism Albania’s fledgling tourism sector is gradually growing, and 335,000 people visited the country’s shores this summer, a 15 percent increase over last year, officials said yesterday. Overall, about half a million foreigners visited the country last year. With the help of the German government, Albania hopes to draw an annual 1.25 million foreigners to its 450-kilometer (270-mile) coastline by 2012. (AP) Tax amnesty loan EFG Eurobank Ergasias is offering credit facilities to firms and the self-employed with annual turnover up to 2.5 million euros who opt to pay a lump sum for a tax amnesty for the fiscal years 1998-2002. The facility is for up to 100 percent of the amount due, repayable over five years. Hyundai Hyundai Hellas announced it has started selling about 3,000 used private cars that were part of its sponsorship for the Olympic Games. The models on offer, Matrix, Elanta, Santa Fe, H-1, Trajet and Sonata, will be priced between 18 percent and 43 percent lower than the normal retail price of the new cars.