ECONOMY

In Brief

Cypriot tourism projects target high-income visitors A series of projects to boost tourism in Cyprus will begin with a new marina in the southern port city of Limassol, Cypriot President Dimitris Christofias said. Large projects such as the marina, which will cost 350 million euros ($445 million) to build and which will have 1,000 berths, «are the locomotive to exit the financial crisis,» Christofias said at a ceremony where he laid the foundation stone for the marina. The project, which aims to attract high-income visitors, will also include housing units and a commercial center, Theoklis Andreou, sales consultant of Limassol Marina Ltd, said in a phone interview yesterday. The first stage will be finished in 2012 and the whole project will be completed in 2014. Tourism, directly and indirectly, accounts for about one-quarter of Cyprus’s gross domestic product. (Bloomberg) Central banks buy Greek, Irish, Portuguese bonds European central banks bought Greek, Irish and Portuguese bonds, according to a trader involved in the transactions, as the securities’ premiums on German debt surged for a third day. Yesterday’s purchases were for about 10 million euros ($12.7 million) each and included debt maturing in five and 10 years, the trader said under condition of anonymity, because the bank’s transactions are confidential. A European Central Bank press officer declined to comment when contacted by phone. «They’re trying to remind people that they’re still there, and they haven’t abandoned the market,» said Marc Ostwald, a strategist at Monument Securities Ltd in London. «The impact is limited, but if they were to stand away, spreads would widen further.» Renewed concern over the finances of Europe’s most indebted nations and the health of euro-region lenders has pushed up yields on Greek, Irish and Portuguese bonds and kept those on German debt near record lows as investors seek safety. The ECB began buying bonds in May as the International Monetary Fund and European Union created a 750-billion-euro fund to backstop the single currency, though its purchases have waned over time. (Bloomberg) Debt shunned Hungary, Romania and Serbia, which turned to bailouts in 2009, are struggling to find buyers for their debt, as spending cuts weaken government power and concerns grow about a stalled recovery. Serbia and Romania both failed to sell the planned amount of debt on offer this week, while Hungary paid more on Tuesday to sell all of its debt by allowing the yield to rise. Hungary failed to sell the planned amount of 12-month debt on September 2 as concern the central bank might raise interest rates damped investor demand. The three former communist countries rely on a combined 43 billion euros ($55 million) in loans backed by the International Monetary Fund. Hungary, among the European Union’s most indebted states, Romania, the bloc’s second poorest, and Serbia, which is not an EU member, are trying to bolster their currencies, hold back inflation and raise foreign direct investment as revenue slumps, with little success, analysts said. «Obviously, the three countries are sharing the same macro problems, which forced them to all find protection under the IMF ‘financial umbrella,’» said Elisabeth Gruie, an emerging markets strategist at BNP Paribas in London. «Their level of refinancing needs is far above that of the rest of the region given budget slippages,» while there remain problems with the «political landscape.» (Bloomberg) On the mend Cyprus’s economy expanded 0.6 percent in the second quarter on a quarterly basis compared to 0.4 percent in the first, helped by a resurgence in the bank and services sector, the statistics department said yesterday. The data was revised upward from 0.4 percent quarter-on-quarter growth in Q2 and 0.3 percent growth in Q1 which the statistics department had issued in a flash estimate on August 13. On a yearly basis, real gross domestic product expanded by 0.5 percent in the second quarter, compared to a 1.3 percent contraction in the first three months of the year. (Reuters)