ECONOMY

In Brief

Eurobank: Double-digit growth expected in Serbia Eurobank EFG, Greece’s top lender, expects its Serbian business to expand by «almost double digits» in 2011, led by corporate lending, board chairman Theodoros Karakassis said. EFG, the sixth biggest by assets of 34 banks operating in Serbia, will also seek to grow through corporate lending in other countries, including Bulgaria, Romania, Turkey and Ukraine, Karakassis said in an interview yesterday at a Euromoney conference in Belgrade. «In most of the countries, corporate lending is going to be the name of the game,» Karakassis said. «This does not mean there will be no household lending, but corporate lending is going to be the primary focus in almost all of the countries of our operation.» EFG and three other Greek banks in Serbia hold around 16 percent of the local market, prompting investor concern about Serbia and other countries in the region earlier this year at the outbreak of the Greece fiscal crisis, and triggering declines in some Balkan currencies. (Bloomberg) Cyprus drew 4.1 billion euros in FDI last year Cyprus attracted 4.1 billion euros ($5.7 billion) in foreign direct investment in 2009, 49 percent more than in 2008, the country’s central bank said. The biggest amounts of foreign investment in the eastern Mediterranean island were from Russia, with 1.5 billion euros, followed by the Netherlands and Greece with 799.5 million euros and 756.5 million euros respectively, the Central Bank of Cyprus said on its website yesterday. Cyprus itself invested 3.6 billion euros abroad, an increase of 29 percent from 2008. The most popular destinations for direct investment from the euro area’s second-smallest economy were the UK with 1.2 billion euros, Panama with 675.7 million euros and the Netherlands with 329.9 million euros, according to the statement. (Bloomberg) Bulgarian pensions Bulgaria will raise social security contributions by 1.8 percent next year to support the indebted pension system and keep its fiscal deficit under control, Labor Minister Totyu Mladenov said yesterday. The center-right government plans to halve the budget deficit to 2.5 percent of gross domestic product next year by keeping taxes unchanged and starting an overhaul of the pension system to avoid long-term threat to fiscal stability. But under threat of strikes and protests, the cabinet bowed to trade union demands to delay pension reform and instead raised social security deductions to a total of 30.3 percent, of which employees will contribute an extra 0.7 percent and employers will pay 1.1 percent more. The increase is expected to cut the social security deficit by more than 370 million levs ($260.6 million) next year from 2.1 billion levs at present, Mladenov told a news conference. The cabinet will also raise the minimum wage in the private sector in 2011, which will bring an additional 110 million levs in revenue to the social security system. (Reuters) Telecom sale Serbia published a tender yesterday for the sale of 51 percent in state-run Telekom Srbija and gave interested parties until November 26 to apply. The tender published in the Politika daily did not state any minimum price. On Tuesday, Serbia’s Economy Minister Mladjan Dinkic said his government expects to get 1.4 billion euros ($1.93 billion) from the telecom sale. (Reuters) Bad loans The number of nonperforming loans (NPLs) in Central and Eastern Europe appear to have peaked after surging during the global financial crisis, the regional head of Banca Intesa Sanpaolo said yesterday. «Probably we are approaching the end, so hopefully the growth [in NPLs] will first decelerate,» Gyorgy Suranyi, head of the Central and Eastern Europe office for Banca Intesa, said in an interview. (Reuters) Spanish reshuffle Spanish Prime Minister Jose Luis Rodriguez Zapatero named a new deputy leader and foreign minister in a cabinet shuffle after securing lawmakers’ support to complete his term and backing for his 2011 budget plan. The legislature approved the most austere budget in three decades in a preliminary ballot yesterday after lawmakers from two regional parties voted with the minority Socialists. (Bloomberg)