THE FOUR biggest municipalities in the Famagusta district are building their appetite for the construction of a multi-million luxurious casino complex in the district, in an effort to diversify their touristic character.

At a news conference yesterday, the municipalities of Paralimni, Ayia Napa, Sotira and Deryneia, in association with the Famagusta Chamber of Commerce (EVEA), presented their joint plan for a modern multi-purpose complex that would include among others a luxurious casino.

Casino in Ayia Napa?

The plan, with initial estimated costs of over €100 million, is currently up for grabs as it has yet to find an investor.

The designers estimate that the proposed complex would need around 16,000 square metres of land, while architectural designs have envisaged it right on the beach side.

The municipalities said that the site where the casino would be built would also depend on the investors, but stressed that the municipality chosen to host the complex should have a say in the plan’s final design.

“Regardless of where the plan will finally be built, all involving communities should reap the plan’s financial benefits” the EVEA statement said.

In a notable U-turn from previous government policy, the government announced last October that it was considering the possibility of allowing the operation of casinos on the island.

Since then, the old airport terminal in Larnaca and the site of the Qatari hotel complex investment in Nicosia have both been touted as possible sites for setting up casinos.

With hoteliers, the Cyprus Tourism Organisation (CTO) and political parties endorsing the concept of casinos in Cyprus, EVEA chairman, Giorgos Michaelides said that the plan would upgrade and differentiate the “outdated model of tourism that we have in the area now.”

The ambitious plan is set to incorporate a top-notch casino, a state of the art space-themed amusement room for children, and a multimedia area where a virtual reality system will be dedicated to the history of Cyprus and the island’s underwater environment.

A hotel, conference area, 1,000-seat amphitheatre and several golf courses could also be possible features of the complex, depending on the preferences of possible investors.

All participating officials said that the casino was the focal point of the project and expressed their belief that this undertaking would substantially help Cyprus move out of the financial crisis.

Whether the project will go through any time soon is uncertain as the licensing of casinos has yet to be discussed thoroughly in parliament, while the necessary legislation has still not been drafted.

Cyprus Airways posted a net loss of € 29,28 million in the first half of 2011.

Feb 2 (Reuters) – Cyprus is considering selling up to a majority stake in troubled state-controlled carrier Cyprus Airways to shore up the airline’s ailing finances, its finance minister said on Thursday.

Cyprus Airways has gone through several overhauls in recent years but has been hobbled by stiff competition from cheaper carriers on its most lucrative routes and rising fuel costs. The state controls 69 percent of the airline.

“We have prepared a proposal which will be sent to the cabinet … where I will ask a decision be taken by the government that it is ready to negotiate with a strategic investor or partner, not excluding the granting of a majority stake,” Finance Minister Kikis Kazamias said.

Cyprus Airways posted a net loss of 29.28 million Euro in the first half of 2011, the last available financial results issued by the airline.

It is due to issue its full-year results towards the end of February.

Kazamias, speaking at a tourism conference, said decisive action was needed. “It cannot be like those (actions) taken in the past, just to solve the problem for the short term.”

He said the proposal would be taken to cabinet for approval this month. (Writing By Michele Kambas; Editing by Will Waterman)

Earnings, which have so far only given mixed results, were another focus, with Infineon rising 5.5 percent, near the top of the leader board after the German chip maker reported forecast-beating results.

Banks, many of which have exposure to Euro zone sovereign debt, featured among the best performers, with the STOXX Europe 600 Banks index up 2.4 percent.

Greek Finance Minister Evangelos Venizelos said talks between Greece and its private creditors were “one formal step away,” with a deal needed to avoid a messy default which could have serious consequences for financial markets.

“It is reflection of how market participants are positioning themselves on announcements,” said Veronika Pechlaner, a fund manager on the Ashburton European equity fund. “The good Chinese data is definitely helping the market.”

“The market is thinking something is going to be agreed on Greece, but we do not know yet what they are going to say and how credible any announcement will be.”

Italian banks were stand out performers, with Intesa Sanpaolo and UniCredit rising 4.3 percent and 3.4 percent respectively after the Bank of Italy eased rules on hybrid debt buybacks which will help them boost their capital base.

Intesa was also buoyed after it become the first lender from the Euro zone periphery to issue senior unsecured bonds since October, in another sign the European Central Bank’s provision of three-year liquidity is helping unfreeze markets.

The banking index, which had a dismal 2011, has gained 12.1 percent this year, making it one of the best performing sectors. Banks were helped at the start of the year by the European Central Bank offering them cheap loans.

Pechlaner said she was underweight financials, though she has added to positions following the ECB initiative to offer banks cheap money.

At 1026 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 1.3 percent at 1,050.25 points after being as low as 1,036.92.

But the index remained stuck in a trading range as traders did not want to make long-term bets and were ready to take profits if the outcome in Greece was not favourable.

"The market is thinking something is going to be agreed on Greece, but we do not know yet what they are going to say and how credible any announcement will be."

There were still worries Portugal could be next to require a second bailout, with its bond yields at elevated levels.

Support was seen at 1,022.29 points, the index’s 50 percent Fibonacci retracement of its February to September 2011 sell-off, and 1,062.24, the 61.8 percent retracement of the same move.

“We are seeing investors putting money in the market for a short-term and are investing banks depending on the news flow,” said Joshua Raymond, Chief Market Strategist at City Index. “No-one wants to take overnight risk.”

Car makers gain

Also helping the market was the Chinese manufacturing data, with car makers, which tend to do well when economic growth is strong, among the top performers after the Chinese data gave hope the country would avoid a hard landing.

The STOXX Europe 600 Automobiles & Parts index rose 2.3 percent to 320.82, with many companies in the index such as Daimler and BMW big exporters to China.

The index, however, is not expected to push past a major resistance level — its 61.8 percent retracement level from its July to September 2011 sell-off at 322 — with other recent data such as U.S. consumer confidence showing a recovery is fragile.

Purchasing managers indices showed the euro zone is still on track for a modest recession as its debt problems hit consumer and business confidence, although Germany was on track for a small expansion.

Investors will look later at the U.S. ISM manufacturing index and U.S. ADP National Employment figures for signs of growth in the economy.

NICOSIA Feb 1 (Reuters) – Noble Energy, which recently reported a major natural gas find off Cyprus, does not exclude participation in a new licensing round planned this year, a senior official with the U.S.-based firm said on Wednesday.

Noble reported an offshore gas prospect of between 5 and 8 trillion cubic feet (tcf) last month, a find which could make Cyprus self sufficient in the commodity for decades.

Terry Gerhart, vice president for international operations, said Noble was considering its options for participating in a second licensing round, expected to be called by Cyprus in coming weeks.

“At this point we are analysing the data which is out there. We haven’t made a commitment yet but we are looking at the data and if we see something that looks encouraging we would certainly look forward to participating,” Gerhart told journalists in Cyprus’s capital Nicosia.

He said Noble’s current find would require more appraisal wells. The company was looking at delivery methods, including piping it onshore for the domestic market, and the potential for an LNG export project, Gerhart said.

Cyprus’s attempts to tap offshore hydrocarbon riches has angered its northern neighbour and rival Turkey, which challenges Nicosia’s jurisdiction in searching for oil and gas.

But buoyed by finds in the offshore block which lies close to major gas discoveries off neighbouring Israel, Cyprus will put 12 blocks rimming its south up for licensing this year, a process which could eventually lead to exploration and exploitation.

The island is ethnically split between Greek Cypriots representing an internationally recognised government, and a breakaway Turkish Cypriot state in north Cyprus. Reunification talks are ongoing.

The Turkish Cypriots and Turkey, which invaded north Cyprus in 1974 after a brief Greece-inspired coup, plan retaliatory exploration in northern Cyprus.

Infrastructure work has already begun in an area onshore in the east of the island, in preparation for work which Turkey’s state-run corporation TPAO is likely to start by around Feb. 28.

“We proposed either waiting for a (reunification) solution or working together on oil and gas exploration. They refused both, so we’re going ahead with our own,” said Osman Ertug, spokesman for Turkish Cypriot leader Dervis Eroglu.

Philipp Roesler became the first German cabinet member to openly endorse a proposal for Greece to surrender budget control after Reuters quoted a European source on Friday as saying Berlin wants Athens to give up budget control.

“We need more leadership and monitoring when it comes to implementing the reform course,” Roesler, also vice chancellor, told Bild newspaper, according to an advance of an interview to be published on Monday.

“If the Greeks aren’t able to succeed themselves with this, then there must be stronger leadership and monitoring from abroad, for example through the EU,” added Roesler, chairman of the Free Democrats (FDP) who share power with Chancellor Angela Merkel.

Reuters reported on Friday that Germany wants Greece to give up control of budget policy to European institutions as part of discussions over a second rescue package.

Greece, which has repeatedly failed to meet the fiscal targets set out by its international lenders, is in talks to finalise a second 130 billion-Euro (109 billion-pound) package.

With many Greeks blaming Germans for the austerity medicine their country has been forced to swallow, officials in Athens dismissed the idea of relinquishing budget control as out of the question.

Finance Minister Evangelos Venizelos said on Sunday Greece was perfectly capable of making good on its promises.

“Anyone who puts a nation before the dilemma of ‘economic assistance or national dignity’ ignores some key historical lessons,” he said in a statement before heading to Brussels for a European Union summit on Monday.

The Financial Times reported on Saturday that it had obtained a copy of the proposal showing Germany wants a new euro zone “budget commissioner” to have the power to veto budget decisions taken by the Greek government if they are not in line with targets set by international lenders.

“Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time,” the document said.

Under the plan, Athens would only be allowed to carry out normal state spending after servicing its debt, the paper said.

Crushed by 350 billion Euro ($462 billion) of debt and running out of cash quickly, Greece is scrambling to appease the “troika” of its official lenders – the European Commission, European Central Bank and International Monetary Fund – and stitch up a deal with private creditors simultaneously.

Greece needs to strike a deal with creditors in the next couple of days to unlock its next aid package in order to avoid a chaotic default.

A government source in Berlin said Germany’s proposal was aimed not just at Greece but also at other struggling Euro zone members that receive aid and are unable to make good on their obligations.

The European Commission, the executive arm of the 27-country bloc, said it wanted the Greek government to maintain autonomy.

(Editing by Alessandra Rizzo)

The sector, which accounts for about a 10th of economic output, registered 2.39 million arrivals compared with 2.17 million arrivals in 2010. About one million of the annual intake were from Britain, the statistics department said.

Tourist arrivals up in 2011.

The island has been repeatedly downgraded by ratings agencies on exposure of its banks to Greek debt and fiscal slippage.

A blast of decaying munitions destroyed Cyprus’s largest power station last July, forcing a third-quarter economic contraction by an estimated 0.7 percent on a quarterly basis.

Authorities expect the impact of the blast could be in part mitigated by tourism arrivals and expect full-year 2011 growth of about 0.5 percent. (Writing By Michele Kambas. Editing by Jeremy Gaunt.)

Based on the exploratory drill by U.S. based Noble Energy the prospect, which lies south of the island, contains a gross mean of 7 tcf of gas, Cypriot President Demetris Christofias said in a statement.

“The discovery of natural gas in the exclusive economic zone of our country opens great potential for Cyprus and its people, which with prudence and in a spirit of collectiveness we will utilize in the service of public interest,” Christofias said.

“New favourable economic prospects have opened for the future of the country,” Christofias added.

It was an auspicious end to a traumatic year for Cyprus which was hammered by ratings agencies for fiscal slippage, shut out of international capital markets and hit by a large munitions blast that destroyed its largest power station.

Its northern neighbour and old rival Turkey has challenged Cyprus’s bid to search for hydrocarbons, saying the island has no jurisdiction. The island was split in a Turkish invasion in 1974 after a brief Greek inspired coup, and Ankara supports a breakaway state in northern Cyprus.

The island, which is run by an internationally recognized Greek Cypriot government, says estranged Turkish Cypriots can benefit from hydrocarbon finds in the context of a political settlement ending decades of division.

Turkey says it plans to conduct its own hydrocarbon surveys off Cyprus. When Noble started its exploratory drilling in September, it sent its own survey vessel to the area.

“We call upon Turkey to show a spirit of peace and reconciliation, (and to) avoid any adventurous acts and provocations which cause problems to (peace) talks and also tension in the Eastern Mediterranean,” said Christofias.

Greek and Turkish Cypriot sides have been engaged in peace talks under United Nations auspices for decades. The latest round of talks began in 2008.

Turkish Cypriots reacted coolly to the announcement.

“In our view, the Greek Cypriots should be investing more in the negotiations, and not in things that cause further disputes,” said Kudret Ozersay, chief aide to Turkish Cypriot leader Dervis Eroglu in peace talks.

Gas in Cyprus

“SIGNIFICANT” DISCOVERY

The Cypriot block, known as “Block 12″, covers approximately 40 square miles and will require additional appraisal drilling prior to development.

It was a “significant” discovery, Noble Energy Chairman and CEO Charles D. Davidson said in a statement. Noble has also reported significant natural gas discoveries off neighbouring Israel.

“This is the fifth consecutive natural gas field discovery for Noble Energy and our partners in the greater Levant basin, with total gross mean resources for the five discoveries currently estimated to be over 33 Tcf.

“This latest discovery in Cyprus further highlights the quality and significance of this world-class basin,” Davidson said.

The gross mean resource range of 5-8 tcf could be a conservative estimate, U.S. based brokerage Sterne Agee said.

“If we use prior news releases on the Tamar and Leviathan discoveries as a guide, we believe that today’s initial resource report by Noble is likely to be conservative, and we would not be surprised to see significant upward revisions in the next couple of years as the project nears production,” Sterne Agee analyst Michael McAllister said in a note. Leviathan and Tamar are two fields off Israel.

Proven discoveries could make Cyprus, which now relies almost exclusively on imported and expensive fuel oil to fire its energy grids, self sufficient for decades. The island has estimated needs in gas of 1 billion cubic metres (bcm) per year.