On Tuesday, the Parliamentary Trade Committee will convene to deliberate on two pivotal topics: the future of the EuroAsia Interconnector and the implications of European Central Bank (ECB) interest rate hikes.

The EuroAsia Interconnector, an ambitious project connecting Cyprus, Greece, and Israel through an underwater electric cable, has been designated a Project of Common Interest by the EU. With an objective to terminate Cyprus's energy isolation, this submarine cable stretches over 1,280 km. The project has garnered €657 million from the EU's Connecting Europe Facility. However, as project costs have soared to €1.9 billion, reports indicate the European Investment Bank (EIB) is hesitant to provide additional financing, causing concerns about the project's feasibility.

The government, as stated by Energy Minister Giorgos Papanastasiou, is contemplating three courses of action: offering governmental guarantees, engaging in equity investments, or refraining from involvement.

Committee Chairman, Kyriakos Hadjiyiannis, stressed the project's significance on Twitter: "The EuroAsia Interconnector is a golden chance to integrate Cyprus into the European grid. A unified electricity network can substantially bolster our economy. Initiatives of such magnitude necessitate unwavering support and transparency."

The discussion will see attendance from the Minister of Energy, delegates from the Ministry of Finance, and other key stakeholders in the project, including representatives from EuroAsia Interconnector Limited.

The second part of the session will pivot to the ramifications of consecutive ECB interest rate hikes, implemented to rein in surging inflation.

Since July 2022, the ECB has instated nine sequential interest rate boosts, a rigorous shift in monetary policy in response to spiraling inflation, exacerbated by the Russia-Ukraine conflict and subsequent sanctions on Russia. Cyprus has witnessed a pronounced uptick in interest rates, leading to apprehensions regarding loan repayments and the surge in non-performing loans. This meeting also follows rumors about a potential windfall tax on banks.

Mr. Hadjigiannis earlier expressed his concerns: "With interest rates on the rise, an escalation in bad loans is unfortunately anticipated. This will be among the primary concerns for the Commerce Committee come August 29."

Prominent attendees for this part of the session will include the Minister of Finance, executives from key banking and financial organizations, and representatives from major Cypriot banks and institutions.