Cyprus

Politics:

• Analysis

  Cyprus politics: Cypriot crisis sets a dangerous precedent

  Cypriot crisis sets a dangerous precedent

  The Cypriot parliament has rejected the country's bail-out proposal by the EU and the IMF, principally because it would have entailed a levy on all bank accounts, including small deposits, a measure which proved unacceptable to the Cypriot population. However, if it is to avoid a meltdown of its banking sector, and therefore of its entire economy, the country will have to reach agreement with its future creditors in the coming days. We still do not consider the prospect of Russian help to be serious.

  Cypriot banks have been hit hard by private-sector involvement (PSI) in Greece. Their size, several times Cypriot GDP, meant that the government was unable to bail them out without external support, leading the country to apply officially for a bail-out in early 2012. Given the previous government's reluctance to accept the EU's conditions, the bail-out negotiations were delayed until after the presidential election in late February. The banks were kept afloat only thanks to emergency liquidity assistance (ELA) from the Central Bank of Cyprus with the permission of the European Central Bank (ECB).

  The proposal on March 16th to impose a levy on all bank accounts, even those with less than EUR100,000, was negatively received not only by the Cypriot population, but also by financial markets, which interpreted the move as an arbitrary reshuffling of creditor hierarchy. As a result, parliament overwhelmingly voted against a slightly amended proposal on March 19th, which in itself sets another precedent in the euro zone crisis.

  Cypriot banks will have a hard time in any case

  With or without a deal, Cypriot banks are now set to take a pummelling as soon as they reopen, probably next week. Outflows of foreign deposits have gathered pace in recent months, and are expected to accelerate sharply as soon as the banks reopen. However, the extent of the damage will largely depend on the deal finally struck as well as on the way in which it is reached. There is therefore a risk that the government's attempt to safeguard its current economic model, based on an oversized financial sector, may backfire. If the banking sector, on which a large part of the economy is based, were to collapse, Cyprus would face a recession of an extreme magnitude, with dramatic social and political consequences.

  This leads us to think that the amounts set in the current bail-out plan may prove insufficient. Even if the banks suffer only limited losses and deposit flight, the scenario on which the EUR17bn bail-out is based is likely to look quite optimistic. The impact of the bank levy on Cypriot domestic demand would alone be sufficient to accelerate the current economic recession, further undermining the public finances. The impact of deposit flight as well as loss of confidence in the financial sector is also likely to be damaging, especially to future business prospects.

  Deal with Russia based on gas exploitation will be difficult

  In an attempt to avoid the conditions imposed by European creditors, the Cypriot government has asked Russia for some financial support, as the previous government did last year. Sources indicate that Russian funds would be forthcoming only if the government provides guarantees based on revenue for the exploitation of recent Cypriot gas finds. The risks surrounding the Cypriot gas fields are high, so a deal based on their exploitation would at best take a long time to negotiate.

  First, the ownership of the fields is contested by Turkey and Egypt, both of which challenge Cyprus' exclusive economic zone (EEZ) in which the gas is expected to be located. Turkey will also continue to claim that a resolution of the decades-old division of Cyprus is a prerequisite for any exploitation.

  Second, the precise volumes of gas are still unknown as exploration started only recently. Consequently, it would be too risky to plan on building a liquefied natural gas (LNG) plant, as this could prove unprofitable if volumes are too low. The alternative would be to construct a pipeline, which would most probably have to go through Turkish territory.

  Third, the development of LNG, combined with the exploitation of shale gas and the discovery of new gas fields, generates uncertainty about the evolution of gas prices over the coming decade. Given that the exploration of the gas fields has only recently started, no revenue is to be expected for at least seven to ten years, making estimates particularly difficult.

  As a result, for a "bail-out for gas" deal to be struck, a high level of trust and commitment is needed on all sides (Cyprus, Russia, but also the EU), which recent developments make even less likely. Given the scale of Russian interest in the Cypriot banking sector, we expect that Russian intervention would be primarily motivated by those interests rather than the prospects of revenue from gas exploitation. Even then, there is a high possibility that such a bilateral agreement would create strong political tensions with the rest of Europe, not least with Germany, which partly proposed the Cypriot PSI to address alleged money-laundering issues involving Russia.

  Cypriot crisis sets a dangerous precedent

  We therefore continue to expect a solution to be found with European creditors, although this may involve Russia in some aspects of the deal. The final shape of the bail-out is difficult to predict, but in any case the harm has already been done. The message sent to the European population was that when push comes to shove, tapping their savings to rescue European banks can be a solution. This could fuel the rise of populist movements across Europe. Markets, however, now see that the euro zone can have a very loose definition of deposit insurance and creditor hierarchy, further undermining the prospects of a credible banking union. Although not our central forecast, the risk of contagion from a Cypriot bank run has increased. Most importantly, we expect people and markets to remember the Cypriot case when other difficult developments of the euro zone crisis unfold.

  March 20, 2013

• Background

  Cyprus: Political forces at a glance

  Present government: The Republic of Cyprus (ROC) has a presidential system of government. The president, Demetris Christofias, of the Progressive Party of the Working People (Akel), was elected in February 2008. Akel is in coalition with the Democratic Party (Diko). The small Movement of Social Democrats (Edek) quit in early 2010 owing to disagreements with Mr Christofias about his stance in the negotiations to solve the decades-long division of the island. Since the Turkish invasion of 1974, the remit of the (Greek Cypriot) government of the Republic of Cyprus only extends to the area in the south of the island, but is recognised internationally as the legitimate government of the whole island (except by Turkey). The Turkish Cypriot north is administered by the government of the self-declared Turkish Republic of Northern Cyprus (TRNC, recognised only by Turkey), which has a semi-presidential system. The president-elect of the TRNC is Dervish Eroglu of the right-wing National Unity Party (UBP), who defeated the pro-settlement Mehmet Ali Talat in the presidential election on April 18th.

  Political parties forces at a glance: parliamentary election results and seats
  	1985		1991		1996		2001		2006
  	% of	No. of	% of	No. of	% of	No. of	% of	No. of	% of	No. of
  	vote	seats	vote	seats	vote	seats	vote	seats	vote	seats
  Progressive Party of the Working People (Akel)	27.4	15	30.6	18	33.0	19	34.7	20	31.1	18
  Democratic Rally (Disy)(a)	33.6	19	35.8	20	34.5	20	34.0	19	30.3	18
  Democratic Party (Diko)	27.7	16	19.5	11	16.4	10	14.8	9	17.9	11
  Movement of Social Democrats (Edek), formerly known as Social Democratic Movement (Kisos)	11.0	6	10.9	7	8.1	5	6.5	4	8.9	5
  European Party (Evroko)(b)	-	-	-	-	-	-	-	-	5.8	3
  New Horizons	-	-	-	-	-	-	3.0	1	-	-
  Fighting Democrats (Adik)	-	-	-	-	-	-	2.2	1	-	-
  Ecologists Movement	-	-	-	-	-	-	2.0	1	2.0	1
  United Democrats (Edi)(c)	-	-	-	-	3.7	2	2.6	1	1.6	0
  Independents & others	0.3	0	3.2	0	4.3	0	0.2	0	2.4	0
  Total	100.0	56	100.0	56	100.0	56	100.0	56	100.0	56
  (a) In 1991 and 1996 Disy allied with the Liberals, which Disy absorbed in 1998. (b) A merger of New Horizons, Adik and others. (c) Edi absorbed two other smaller parties after the 1996 election.
  Sources: Press and Information Office; Press reports.

  Download text file (csv format)

  Next elections: The next parliamentary election in the Republic of Cyprus is due in May 2011 and the next presidential election is due in February 2013. The next parliamentary election in the TRNC is due in April 2014 and the next presidential election in April 2015.

  May 04, 2010

• Structure

  Cyprus: Political structure

  Official name

  Republic of Cyprus; the government is the internationally recognised government of the island, but its writ does not run in the north, which has been occupied since 1974 by Turkish troops (around 36,000 in 2007); in 1983 the Turkish Cypriot administration declared the northern territory to be an independent state called the Turkish Republic of Northern Cyprus (TRNC), which is recognised only by Turkey. Reference to the TRNC or "Turkish Cypriot zone" in this report does not imply recognition as a sovereign state by the Economist Intelligence Unit. Unless clearly indicated, economic statistics in this report refer to the economy in the area controlled by the government of the Republic of Cyprus

  Legal system

  Based on the constitution of 1960

  Legislature

  Unicameral House of Representatives elected for a five-year term by direct universal suffrage; at present, only 56 members-all Greek Cypriot-sit in the legislature; an additional three special representatives of the Maronite and Armenian minorities are elected in a separate vote

  National elections

  February 2008 (presidential) and May 2011 (legislative); next election is due in February 2013 (presidential)

  Head of state

  Directly elected president with executive powers, who serves a five-year term; the office is currently held by Demetris Christofias (Akel), who replaced Tassos Papadopoulos (Diko) after the February 2008 presidential election

  Executive

  Council of Ministers appointed by the president, who convenes and presides over its meetings; ministers may not sit in the House of Representatives, but may introduce bills

  Main political parties

  Progressive Party of the Working People (Akel, communist); Democratic Rally (Disy); Democratic Party (Diko); Movement of Social Democrats (Edek, formerly known as the Social Democratic Movement-Kisos); United Democrats (Edi). The government formed in 2008 comprised representatives of Akel, Diko, Edek and independents. Edek withdrew from the coalition in February 2010 and Diko in July 2011, leaving Akel as a minority government.

  Principal ministers

  Agriculture, natural resources & environment: Sofoclis Aletraris (independent)

  Commerce, industry & tourism: Neoclis Sylikiotis (Akel)

  Communications & public works: Efthemios Flourentzou (independent)

  Defence: Demetris Eliades (independent)

  Education & culture: Giorgos Demosthenous (independent)

  Finance: Vassos Shiarly (independent)

  Foreign affairs: Erato Kozakou-Marcoullis (independent)

  Government spokesman: Stefanos Stefanou (Akel)

  Health: Stavros Malas (United Democrats)

  Interior: Eleni Mavrou (Akel)

  Justice & public order: Loucas Louca (independent)

  Labour & social security: Sotiroulla Charalambous (Akel-affiliated)

  Central Bank governor

  Panicos Demetriades

  October 12, 2012

• Outlook

  Cyprus: Key developments

  Outlook for 2013-17

  • The Economist Intelligence Unit puts the chance of the current negotiations reaching a settlement of the Cyprus problem at only 20%. There is a risk of escalating tension with Turkey over hydrocarbons exploration.
  • Nicos Anastasiades, the leader of the opposition Democratic Rally (Disy), is likely to be the winner of the presidential election in February 2013, having secured the support of the more hardline Democratic Party (Diko).
  • The government has officially applied for a bail-out from the European Financial Stability Facility (EFSF), following the meltdown of some of the country's major banks. No decision is expected before the election.
  • This bail-out will come with strict conditions, affecting both the public and the financial sector. Severe austerity measures are bound to be forced onto the government's agenda in the coming months.
  • The government budget deficit should narrow to 4.3% of GDP in 2012 from an estimated 6.3% in 2011, but will exceed the government's 2.8% target, owing to the economic contraction. We expect it to remain above 3% of GDP until 2017.
  • We estimate that real GDP contracted by 2.4% in 2012, and expect a 3.5% contraction in 2013, primarily owing to a contraction in private and government consumption. The recession will ease to 0.9% in 2014.
  • Growth will be bolstered by investment in natural gas exploitation towards the end of the forecast period. The impact on the current account will initially be negative, as the country will have to import investment material.
  • Despite a small reduction in the current-account deficit in 2012 and 2013, investment in gas exploitation infrastructure and reduced services exports will keep the deficit large in the second half of the forecast period.

  Review

  • Cyprus has officially applied for a bail-out from the European Union and the IMF, although many technical and political difficulties remain.
  • The Ministry of Finance has estimated that Cyprus could need about EUR17bn between 2012 and 2016, of which EUR10bn would be used to shore up the banking sector and the remainder to cover the government's financing needs.
  • GDP contracted by 0.4% quarter on quarter in July-September on a seasonally adjusted basis, a deceleration compared with the 0.6% and 0.8% quarterly contractions witnessed in the first and second quarters, respectively.
  • The number of unemployed persons in Cyprus reached 41,625 in December (40,184 when seasonally adjusted), and the EU harmonised rate of unemployment jumped to above 14%.

  January 18, 2013

Economy:

• Background

  Cyprus: Country fact sheet

  Fact sheet

  Annual data	2011a	Historical averages (%)	2007-11
  Population (m)	0.8	Population growth	1.0
  GDP (US$ bn; market exchange rate)	24.7b	Real GDP growth	1.7
  GDP (US$ bn; purchasing power parity)	23.8b	Real domestic demand growth	1.5
  GDP per head (US$; market exchange rate)	30,173	Inflation	2.6
  GDP per head (US$; purchasing power parity)	29,022	Current-account balance (% of GDP)	-10.9
  Exchange rate (av) €:US$	0.72b	FDI inflows (% of GDP)	8.6
  a Economist Intelligence Unit estimates. b Actual.

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  Background: The (Greek Cypriot) government of the Republic of Cyprus is the internationally recognised government of the island, but its writ does not run in the north, which since 1974 has been occupied by Turkish troops (currently around 25,000). The self-declared Turkish Republic of Northern Cyprus (TRNC) in the north is recognised only by Turkey. Decades of efforts to reunite the island, including a new attempt begun in 2008, have so far failed.

  Political structure: Based on 1960 constitution. A unicameral House of Representatives is elected for a five-year term; it currently has 56 Greek Cypriot members and three special representatives of Maronite, Armenian and Latin minorities. The president, with executive powers, is directly elected for a five-year term and appoints the cabinet (Council of Ministers). The incumbent is Demetris Christofias, who hails from the Progressive Party of the Working People (Akel). After losing its two coalition partners Akel is now a minority government. The largest opposition party is the Democratic Rally (Disy), which broadly supports the search for a settlement. However, the historical rivalry between Disy and Akel makes co-operation difficult.

  Policy issues: The division of the island often distracts attention from other important policy issues. The main focus of economic policy in 2012-16 will be fiscal consolidation after a combination of higher spending and slower economic growth led to a sharp rise in the budget deficit in 2009-11 and recapitalisation of the banks, which recorded big losses on Greek government loans. The exploitation of the gas fields discovered in 2011 will constitute a major focus for the government, as it will have a significant impact on Cyprus's economy over the medium and long term.

  Taxation Tax rates are low. Dividend taxation for resident companies lifts the effective rate to almost 20%. The standard value-added tax (VAT) rate was raised in 2012 from 15% to 17%. Some goods and services are exempt or subject to reduced rates. The employers' and employees' social insurance contribution rate was raised in April 2009 to 6.8% of gross wages and will rise every five years by 0.5%. The government currently pays 4.3%. The self-employed pay 12.6%.

  Foreign trade: As a service-dominated economy, Cyprus runs a large deficit on trade in goods. The main domestic exports are pharmaceutical products, citrus fruits, cheese and potatoes, while the main domestic imports are food, cars and oil. Tourism receipts have declined in recent years, only partly offset by an increase in business services exports.

  Major domestic exports 2010	% of total	Major domestic imports 2010	% of total
  Manufactured goods	63.0	Consumer goods	30.3
  Processed agricultural products	16.5	Intermediate goods	27.2
  Raw agricultural products	15.2	Fuel and lubricant	18.8
  Industrial products of mineral origin	4.3	Transport equipment	12.9
  Leading markets 2011	% of total	Leading suppliers 2011	% of total
  Greece	22.3	Greece	21.0
  UK	8.6	Israel	10.2
  Germany	4.8	UK	9.0
  Italy	3.1	Italy	8.1

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  October 22, 2012

• Structure

  Cyprus: Economic structure

  Data and charts: Annual trends charts

  
  

  

  January 18, 2013

• Outlook

  Cyprus: Country outlook

  Cyprus: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The main concern for political stability in Cyprus stems from the decades-old division of the island into two parts, essentially a Greek Cypriot south and a Turkish Cypriot north. Repeated efforts to end the division have failed and the island remains heavily militarised (some 30,000-40,000 Turkish troops are stationed in the north). After about four years of negotiations and surveys showing continued deep mutual mistrust between the two sides, it appears that the main obstacle to a solution is that the political price of reunification, namely sharing power, is simply too high for two communities that have spent decades governing apart. However, both the international community and Cypriot politicians have invested so much political capital in persuading voters that a single, power-sharing "bi-zonal, bi-communal" federal state is the only model that they cannot countenance other options. Formal partition remains anathema for Greek Cypriots and the territorial adjustment that would probably have to accompany partition is still deeply unpopular among Turkish Cypriots, who now have an interest in sharing natural gas revenue. Therefore, although the Economist Intelligence Unit has no expectation that the Cyprus problem will be resolved, we also do not expect either side to walk away from the negotiating table. The UN-sponsored talks will be on hold until after the presidential election in February 2013, but we believe that the UN will be forced to attempt to revive the negotiations not long thereafter, possibly to address tension between Cyprus and Turkey over oil and gas exploration. This issue has renewed a territorial dispute, as both sides claim their rights to exploit the offshore gas fields. Our baseline scenario, therefore, is for ongoing negotiations, without a resolution.

  ELECTION WATCH: The Greek Cypriot leader and president of the Republic of Cyprus, Demetris Christofias, confirmed that he will not run for a second term at the next election, set to take place in February 2013. The leader of the main opposition Democratic Rally (Disy), Nicos Anastasiades, has been designated to stand. In a move intended to gain the full support of his own party, which comprises a mix of moderates and hardliners, he has said that he will not act as chief negotiator in future talks to resolve the Cyprus problem. This stance has allowed him to secure the backing of the Democratic Party (Diko), the third-largest party and traditional "kingmaker", which also takes a hard line on the Cyprus problem.

  INTERNATIONAL RELATIONS: The Cyprus problem will continue to create difficulties for Turkish-EU relations. It has also caused tension with Russia and Greece, both traditional Greek Cypriot allies that now have large commercial interests in Turkey, including in the oil and gas sectors. The Greek Cypriots are bolstering relations with Israel, with a view to co-operating on gas exploitation. Given the poor Turkish-Israeli relations and the Turkish Cypriots' announcement that they will also pursue hydrocarbons exploration offshore, there is a risk of escalating tension in the eastern Mediterranean.

  POLICY TRENDS: The Cypriot government officially applied to access the European Financial Stability Facility (EFSF), the EU's bail-out fund, on June 25th 2012. The main challenges for the government will be to deal with the conditions attached to this support, which are likely to be a mix of fiscal consolidation and structural reforms to stabilise the financial sector. High exposure to Greek sovereign debt and to the Greek economy generally has led to the meltdown of the main Cypriot banks. Given their relative size in the Cypriot economy, the Cypriot financial stability fund is not large enough to restore the capital ratios of Greek Cypriot banks to the level recently demanded by the European Banking Authority (EBA). Cypriot banks remain highly exposed to Greek public and private debt, and will need up to EUR10bn of fresh capital, according to the Ministry of Finance. Given the state's new financing and refinancing needs in the coming years (estimated at about EUR7bn until end-2016), the amount of the initial bail-out is likely to be about EUR17bn. However, there is a strong likelihood that these amounts will fall short of the actual needs of the financial and public sectors, and that the implementation of the conditions attached will prove difficult to implement, as has been the case for other bail-out programmes in the euro zone.

  ECONOMIC GROWTH: We estimate that real GDP contracted by 2.4% in 2012, owing to a collapse of investment as well as a fall in private and public consumption. The recession is expected to deepen in 2013, with GDP falling by 3.5%, and to soften in 2014, with GDP falling by 0.9%. Assuming that external conditions stabilise, GDP in Cyprus is forecast to return to growth afterwards, although at very low levels. Investment related to natural-gas exploitation will provide an upward spur to GDP growth towards the end of the forecast period.

  INFLATION: We estimate that inflation (EU harmonised measure) averaged about 3.1% in 2012, as increases in electricity tariffs and a rise of 2 percentage points in value-added tax (VAT) in March 2012 have only temporarily offset lower inflationary pressure owing to weak demand. The annual rate of inflation has nevertheless weakened significantly in the final months of 2012, and this trend is expected to continue until mid-2013. Tax hikes will, however, create upward pressure in the second half of the year, so that we expect inflation to average about 1.7% in 2013. A weak euro is likely to prevent inflation from falling further during 2014. Inflation is expected to pick up afterwards, reflecting weak competition in retailing and vulnerability to oil price rises--more than 90% of electricity is produced from oil and dependence on private transport is high.

  EXCHANGE RATES: Although not our central forecast, there is a substantial risk that several countries will exit the euro zone in the coming years. Such fears largely explain the volatility of the euro, which fluctuated between US$1.20:EUR1 and US$1.35:EUR1 in 2012. In recent months the euro has strengthened moderately in response to a promise of more determined European Central Bank (ECB) action, to stand at about US$1.30:EUR1 at end-December. Central bank intervention has helped to stabilise financial markets, but the euro will remain volatile in response to shifting risk appetites, protracted economic weakness and lower reserves accumulation by China. We forecast average exchange rates of US$1.29:EUR1 in 2013 and US$1.26:EUR1 in 2014-17.

  EXTERNAL SECTOR: Despite narrowing owing to weak domestic demand, we forecast that the current-account deficit will remain worryingly large in the coming years. After an unusually strong year for tourism in 2011, owing to diversion of business from destinations in the Middle East, the services surplus stagnated in 2012. High interest payments on debt will also widen the income deficit. We estimate that the current-account deficit narrowed to below 7% of GDP in 2012. It is expected to continue to contract gradually until 2016, when imports of material due to exploitation of natural gas will widen it again. In the past, the deficit has been covered by "net other investment" on the financial account, which mainly comprises bank deposits. These have remained fairly stable despite concerns about exposure to Greece, but this might change as a result of the Cypriot bail-out or if Greece were to exit the euro.

  January 14, 2013

• Forecast

  Cyprus: Country forecast summary

  Country forecast overview: Highlights

  • The Economist Intelligence Unit puts the chances of finding a solution to the decades-old division of Cyprus during the forecast period at only 20%. The current negotiations appear to have reached deadlock, but because all parties to the talks will find it difficult to walk away, our baseline scenario is for talks to continue without resolution, with a pause until after the presidential election. Nicos Anastasiades, the leader of the opposition Democratic Rally (Disy), is likely to be the winner of the presidential election in February 2013, having secured the support of the more hardline Democratic Party (Diko).
  • Given Turkey's waning hopes of EU membership, the steady deterioration in Turkish-Israeli relations and Turkish objections to hydrocarbons exploration offshore of Cyprus, escalating tension in the eastern Mediterranean is a risk.
  • We estimate that the budget deficit narrowed only moderately in 2012, to 4.3% of GDP, thereby missing the government's 2.8% target, mainly because we estimate an economic contraction in 2012. The contagion from Greece, among other factors, led at least two of the banks to require a bail-out from the government. As a consequence, the government had to apply for EU support as well. Negotiations are under way, with a particular focus on the conditions attached to the bail-out, which are likely to entail spending cuts and tax rises.
  • We estimate that real GDP contracted by 2.4% in 2012 and expect a 3.5%
  • contraction in 2013, primarily owing to a contraction in private and government consumption, while the recession will ease to 0.9% in 2014. The high unemployment rate will continue to depress private consumption throughout the forecast period. Assuming that external conditions stabilise, growth is forecast to accelerate gradually to 1.2% by 2017, helped predominantly by investment in the exploitation of natural gas.
  • Inflation (national measure) is estimated to have fallen from 3.3% in 2011 to 2.9% in 2012. Inflation did not fall more steeply because of further increases in electricity tariffs and a rise of 2 percentage points in value-added tax (VAT) during March 2012. A fall is expected in 2013 as inflationary pressures ease. Inflation in Cyprus will then pick up, but is not expected to reach pre-crisis levels in the forecast period.
  • We estimate that the current-account deficit narrowed from 10.2% in 2011 to 6.6% in 2012. Investment in gas exploitation infrastructure and reduced services exports will keep the deficit large in the second half of the forecast period. In the past, the deficit has been covered by "net other investment", which mainly comprises bank deposits. These have remained fairly stable despite concerns about exposure to Greece, but this might change if Greece were to exit the euro.

  

  January 18, 2013

View detailed map

Country Briefing

Land area

9,251 sq km, of which 3,355 sq km is controlled by the Turkish Cypriot administration, 151 sq km is in the UN-monitored buffer zone (Green Line) and 254 sq km constitute the Sovereign Base Areas under the jurisdiction of the UK

Population

Total population of the Greek Cypriot south of the Republic of Cyprus was 778,700 at the end of 2006; estimates for the north range from 88,900 Turkish Cypriots plus 160,000 Turkish settlers (Republic of Cyprus authorities figures for 2006) to 256,644 (Turkish Cypriot administration figures for 2006)

Main towns

Population in '000 (end-2006 estimates)

Nicosia (Lefkosia) district (capital): 307

Limassol (Lemesos) district: 224

Larnaca district: 130

Paphos district: 75

Ammochostos (Free Famagusta) district: 43

Climate

Mediterranean

Weather in Nicosia (altitude 160 metres)

Hottest month, July, 22-37°C (average daily minimum and maximum); coldest month, January, 5-15°C; driest month, July, 2 mm average rainfall; wettest month, December, 59 mm average rainfall

Languages

Greek and Turkish; English is also widely spoken

Measures

Metric system

Currency

Euro (EUR) = 100 cents replaced Pound (C£) = 100 cents on January 1st 2008 at the irrevocable exchange rate of C£0.585274:EUR1

Fiscal year

Calendar year

Time

2 hours ahead of GMT (3 hours ahead in summer)

Public holidays

January 1st; January 6th; Green Monday (50 days before Greek Orthodox Easter); March 25th; April 1st; Good Friday and Easter Monday (Greek Orthodox calendar); May 1st; Pentecost-Kataklysmos (50 days after Greek Orthodox Easter); August 15th; October 1st; October 28th; December 24th; December 25th; December 26th

January 18, 2013