ECONOMY

In Brief

Cyprus must cut back on spending to contain deficit NICOSIA (Reuters) – Cyprus must cut back on its spending to save 175 million euros this year in a bid to contain its public deficit at 6.0 percent, the island’s Finance Minister Charilaos Stavrakis said yesterday. The European Commission decided to take disciplinary action against Cyprus for exceeding public deficit limits above the EU ceiling of 3 percent of gross domestic product. «The EU Commission agreed with us that, without measures, the deficit would have reached 7 percent… we put in our aim, which was approved… that over the next four years there be a gradual decrease to below 3.0 percent,» Stavrakis said. Cyprus had a budget gap of 6.1 percent in 2009, which is expected to rise to 7.1 percent this year. Presenting the government’s economic support package to reporters, Stavrakis said that the state has already saved 105 million euros from its overall 175-million-euro target by cutting operational expenditures in the public sector by 80 million euros in 2010 and the number of state employees by 490 people so far. «This has happened for the first time in Cyprus’s history,» he said. Tourism revenues seen off 7-9 percent this year Greece’s tourism revenues are likely to fall by 7-9 percent this year, making it even harder for the debt-choked country to pull itself out of a crisis that has rocked markets worldwide, a senior industry official said yesterday. Tourism accounts for nearly a fifth of Greece’s output and is a main driver of its 240-billion-euro economy. How it fares is crucial for the recession-hit economy and its capacity to get past its debt crisis. «We’ll see a big drop in revenues because [holiday] prices are down… At the moment, we expect a 7 to 9 percent drop [in revenues],» said Andreas Andreadis, head of the Hellenic Hotel Federation and vice president of the Association of Greek Tourism Enterprises. (Reuters) Undersea power cable Public Power Corporation SA, Greece’s biggest electricity company, awarded Nexans SA a 64-million-euro contract to build an undersea power cable, according to an e-mailed statement from the Athens-based company yesterday. The cable will be able to carry 400 megawatts of power from the island of Evia to the Athens region. (Bloomberg) Titan profits Greece’s biggest cement producer Titan is expected to post a 23 percent fall in first-quarter net profits on Monday, hurt by the recession in Greece and weak activity in Southeast Europe. The average forecast of 10 analysts polled by Reuters came to a net profit of 16.5 million euros ($20.96 million), with estimates ranging from 8 million to 22 million. «Lower economic activity and poor weather conditions in developed countries and Eastern Europe negatively affected volumes and margins,» said analyst Alexis Achilliou at IBG Securities, in a note to investors. Sales of Titan, which runs cement plants in nine countries, including the United States and Egypt, have been hit by the collapse of the US housing market and the recession in Greece. (Reuters) Arms spending Greece will not make a decision on whether to buy six European Multi-Mission Frigates (FREMM) from France this year, Deputy Defense Minister Panos Beglitis told Le Monde newspaper in an interview published yesterday. Beglitis said Greece would cut its defense spending as part of government plans to exit a debt crisis that has rocked financial markets. Beglitis said talks with France over the frigates were continuing but added: «Continuing the talks does not mean that a deal will be reached. No decision will be taken in 2010.» French media reports have said the FREMM frigate deal could be worth 2.5 billion euros ($3.18 billion). (Reuters) OPAP strike Greek betting firm OPAP’s sales agents plan to strike on the day of the Champions League soccer final next week and scale up their action during the World Soccer Cup to protest the way they are taxed. Analysts said the 24-hour strike on the day of the Champion League final could mean several million euros in revenue losses for OPAP, Europe’s biggest gambling firm. OPAP, which has a monopoly on sports betting and lotteries in the country until 2020, is 34 percent-owned by the state. (Reuters)