ECONOMY

In Brief

EU to set Cyprus, Malta euro rates at parity BRUSSELS (Reuters) – The European Commission is likely to have proposed that the Cyprus pound be replaced by the euro at a rate of 0.585274 pounds per euro as expected when the island joins the single currency, an EU source said. The EU executive is also expected to have proposed replacing the Maltese lira with the euro at a rate of 0.429300 lira per euro, the source, who asked not to be identified, told Reuters yesterday. Cyprus and Malta are to join the currently 13-nation eurozone on January 1, 2008. Those rates would be the same as their central parity levels in the Exchange Rate Mechanism II, the currency stability test for joining the euro, in which the two Mediterranean islands’ currencies have been stable over the last two years. Cyprus competition watchdog fines Marfin Popular Bank NICOSIA (Reuters) – Cyprus’s Competition Commission said yesterday it has fined Marfin Popular Bank (MPB) a total of 8,000 Cyprus pounds (US$18,604). The commission ruled unanimously that Marfin failed to get its permission or to inform it about the acquisition of a 8.07 percent stake in rival Bank of Cyprus. This resulted in a fine of 5,000 pounds. The commission also fined MPB an additional 3,000 pounds for proceeding with the three-way merger of Greece’s Marfin Financial Group, Egnatia Bank and Cyprus’s Laiki Bank before the commission declared it compliant with competition rules on December 13, 2006. A Marfin spokesman said, «We are still going through the rulings.» Conference center tender The government is starting the process for the transformation of the Olympic Sports Center of Faliron into an international conference center, through a public-private partnership (PPP). Budgeted at 94 million euros plus value-added tax and heavy maintenance and insurance costs, the project will include the funding, study, reconstruction and technical management of the building. The private body to undertake the project will also have to revamp the surrounding area. The tender by Olympic Properties SA for the company to lease the building is also under way. Credit Suisse ups Turkey Credit Suisse said it had raised exposure to Turkish equities to 10 percent above the benchmark in its model portfolio. «We are now of the view that the path for Turkish politics, central bank easing and equities over the next 12 months is less opaque,» the bank said in a note, noting: «The theme of moderating interest rates in Turkey will now begin to play out.» Turkey offers the last real convergence play within emerging Europe, with significant discounts on forward earnings and trailing book multiples, Credit Suisse said, forecasting a benign outcome from the July 22 election. (Reuters) Cyprus inflation Cyprus’s consumer prices rose by 1.9 percent year last month, down from 2.2 percent in May, the statistics department said. Month on month the consumer price index fell by 0.21 percent in June, due mainly to falling prices for fruit, vegetables and potatoes more than offsetting price increases for petroleum products and electricity. (Reuters)