ECONOMY

In Brief

Eurozone lenders doing better than feared FRANKFURT (AFP) – Eurozone banks appeared to be in better shape than feared yesterday as demand for European Central Bank three-month loans fell well short of forecasts. The ECB said it will lend commercial banks 134 billion euros ($164 billion) for three months, a record for such loans but much less than the minimum of around 150 billion euros expected by economists. The ECB said 171 banks had requested the funds a day before all-time record loans of 442 billion euros for one year come due. The previous record for three-month loans was 103 billion euros, set in late October 2008 following the collapse of US investment bank Lehman Brothers. Analysts had forecast that eurozone commercial banks would need around 150 billion euros to cover minimum reserve requirements at their respective central banks and lending to the broader economy. The weaker demand indicated that eurozone banks were in relatively robust health and was followed closely by nervous financial markets seeking to determine if one of the world’s main economic blocs was firmly on the path to recovery or not. Former IMF official to head Greek stats agency Greece’s Finance Ministry says it has appointed a senior statistician from the International Monetary Fund as the new head of the country’s embattled statistics agency. The agency was widely discredited after a new government revealed last year that budget data had been embellished and sharply revised its budget deficit upward. The move was the first step in the country’s slide to near-bankruptcy. The Finance Ministry said yesterday that Andreas Georgiou, deputy head of the IMF’s statistics service and a graduate of Amherst College in the United States, was named to head the agency. The previous chief quit shortly after Prime Minister George Papandreou’s Socialists took over from the conservative government in October. (AP) Retail sales Greece’s retail sales dropped 5.8 percent by volume year-on-year in April after a 10.1 percent increase in March that was boosted by Easter shopping, data from the country’s statistics service showed yesterday. Retail sales by revenues declined 0.4 percent year-on-year in April after a 14.9 percent increase in the previous month. Month-on-month, retail sales by volume fell 5.2 percent. «Retail sales dropped in April after the rising trend observed in the first quarter, mainly because of unfavorable base effects. Last year, the majority of Easter shopping took place in April,» said Nikos Magginas, economist at National Bank. (Reuters) Tourism earnings Cyprus’s earnings from tourism fell 1.9 percent in the first five months of the year, cutting a sharper decline recorded in the first quarter from flight disruptions caused by volcanic ash in Europe. Revenue from January to May was estimated at 383 million euros, compared to 390.4 million in the corresponding period of 2009, Cyprus’s statistics department said, saying it represented a 1.9 percent year-on-year drop. Tourism accounts for almost 11 percent of Cyprus’s gross domestic product, which fell 0.2 percent quarter-on-quarter in the first three months of this year. Earnings from tourism were down 6.1 percent on an annual basis in the first quarter, hit by the grounding of flights across Europe due to a cloud of Icelandic volcanic ash. For the month of May, earnings rose 4.2 percent compared to May 2009. (Reuters) Market recovers The housing market in Cyprus is recovering from the effects of the Greek financial crisis, according to Charalambos Petrides, the president of the Cyprus Association of Valuers and Property Consultants. Transactions across the island rose 25 percent in the first five months of the year as house prices in coastal areas, which attract foreign buyers, fell as much as 20 percent, Petrides said in an interview yesterday. Apartment prices in Nicosia’s suburbs, where buyers are almost all domestic, have dropped as much as 15 percent. The price declines have helped to offset mortgage interest rates that are comparatively high compared with other European Union countries, Petrides said. Greek banks operating in Cyprus raised deposit rates to attract money for lending in Greece and the result was higher loan rates in Cyprus. (Bloomberg)