By Stefanos Evripidou

THE CO-OPERATIVE Movement hopes to regain ownership of its banks within five years of their nationalisation, said outgoing general manager of the Central Co-operative Bank (CCB) Erotokritos Chlorakiotis yesterday.

The state will soon become the largest shareholder in the co-operative banking institutions, but the latter will have the right to be the first to buy back their shares after a transitional period of five years, said Chlorakiotis.

“The co-operative movement is sufficiently strong and will soon be in a position to regain its shares,” he added.

Finance Minister Harris Georgiades said yesterday the government would spend around €1.5 billion of the €10 billion international bailout to buy shares in the co-operative movement so the latter could meet its recapitalisation needs.

The state was effectively using taxpayers’ money to save the co-op banks from going bust, he said. In turn, depositors will be saved from a ‘bail-in’ as experienced by depositors in the Bank of Cyprus and former Laiki.

The co-ops will receive the money after the disbursement of the second tranche of the Cypriot bailout programme, pending approval of the Eurogroup on September 13.

The move will make the state the exclusive owner of the co-operatives, acquiring 99 per cent of its shares.

Georgiades explained the share purchase would not be in the form of a loan accruing interest annually. As the exclusive owner and shareholder, the state will not get interest on the €1.5 billion, however any profits made will belong to the state, as will any losses.

Speaking to reporters yesterday, Chlorakiotis expressed confidence that the state would not sell its shares in the co-op movement to others in the private sector, but will give the movement a chance to get back on its feet and buy back its shares from the state.

In any case, he argued, the state owes the co-ops €2 billion; around €1 billion in state bonds and the rest in loans either towards the state or to local authorities but with state guarantees.

Georgiades countered that these were separate issues that were not related.

Chlorakiotis also noted that mergers will take place to reduce the number of co-ops from 93 to 18, meaning a “substantial number” of branches would have to be closed.

The restructuring plan would be submitted at the end of September to the Central Bank of Cyprus and to the finance ministry as the largest shareholder.

The outgoing chief said the aim of offering a voluntary early retirement scheme was to reduce the need for a large number of redundancies.

An article by online news site Stockwatch last month revealed that the early retirement plan included extremely favourable terms for outgoing staff, far over and above what their colleagues in the Bank of Cyprus are currently negotiating for.

Under the proposed co-op plan, employees with 15 years of service under their belt, and approximately the same number of years left to go until retirement will get 41 times their salary as compensation for early retirement, counting for approximately three and a half years of earnings.

However, before the scheme can be brought into effect, it will likely need the approval of its new owner next month, the state, and by extension, the taxpayer.

Chlorakiotis yesterday noted that consultations were still needed on various technical issues like the dividend that the co-operative movement will pay to the state, which will be discussed at a political level, he said.

Send to Kindle

By Gwynne Dyer

SCIENCE writer Matt Ridley once described the human mating system as “monogamy plagued by adultery,” which sounds a little judgmental. Perhaps we should just agree that we are an imperfectly pair-bonding species. Quite imperfectly – I am on my second marriage, and so is my wife – but the point is that we do form pairs: 89 percent of the world’s people get married before the age of forty-nine.

Elsewhere in the animal world, monogamy is definitely a minority taste. Only 3 percent of mammals are monogamous.

Even among our closest relatives, the primates, only a quarter of the species form pair bonds. Moreover, the very fragility of the pair bond in human beings suggests that it is a behaviour we only adopted fairly recently in our evolutionary history. So when did we acquire it, and why?

There is a new explanation on the table. In a study published this week in the “Proceedings of the National Academy of Sciences”, scientists argue that the main reason why human beings – more precisely, male human beings – became monogamous was to keep their babies from being killed by other men.

There are many species where an incoming male will kill a female’s offspring by a previous male in order to make room for his own. It’s especially common in mammals, where a female remains infertile while she is still producing milk for an existing baby. The new male is in a hurry to get on with fathering the bearers of his own genes, and if he kills her existing offspring she will become fertile again.

This may have been a particularly big problem in our own species, because human females may nurse a child for as long as two or three years. Infanticide is ugly, but unfortunately it makes sense as a male reproductive strategy. So it also makes sense for the father of the existing children to stick around and protect them from that fate.

This was the hypothesis of the scientists from University College London and Oxford, Manchester and Auckland Universities who published the article in “Proceedings”. “You do not get monogamy unless you already have infanticide, and you do not get a switch to paternal care (by males) if you don’t already have monogamy,” wrote Dr. Christopher Opie of UCL.

This flies in the face of the previously dominant explanation, which was based on the remarkably long childhood of human offspring. As our brains got bigger and the amount of cultural learning that had to be imparted to our children grew greater, the portion of their lives that they spent as dependent children grew longer and longer. Male help was therefore needed to raise them successfully.

Given the relatively short lifespans of hunter-gatherers, human children ended up as dependents for about a third of their lives. Most mammals depend on their mothers to feed, each and protect them for less than a tenth of their lives, so human mothers had to cope with a far greater burden than that of most other species (including most other primate species).

In the conventional wisdom, that was why human beings became (imperfectly) monogamous. Couples that stayed together could provide far more support for the children than ones who had only a mother to care for them, and so more of the children of those unions would survive to pass on their genes to the next generation.

True enough, but why would the males commit in the first place? They were unlikely to be able make that kind of statistical calculation, and the normal male reproductive strategy in mammals is to impregnate as many females as possible and leave the mothers to raise them. Maybe they just stayed with the females to keep their children from being killed by other males.

So the researchers decided to test the rival hypotheses: did males commit to monogamy to prevent infanticide, or to ease the burden on females and thus improve the children’s survival chances in a different way? The cynics among you will already know the answer to this, but scientists actually have to prove things.

What they did was to take a family tree of 230 mammals, including most of the primate species, and put in the details of their mating behaviour, rates of infanticide, and amount of paternal care (i.e. monogamy). Then they simulated the evolution of those species over a period of 75 million years, running the programme millions of times to see how monogamy rose or fell for each species under different circumstances.

The conclusion was clear: among primates, monogamy was always preceded by one thing and one thing only: infanticide by males. Once you have monogamy, there is usually a rise in the male commitment to caring for the offspring as well, but infanticide has to come first. It’s not exactly romantic, but evolution isn’t.

So here we are, living in couples and raising our offspring together as if we were birds. (90 percent of birds are monogamous.) It doesn’t really matter how we got here, but it’s definitely a better place to be. In the end, we even figured out how to love each other.

Gwynne Dyer is an independent journalist whose articles are published in 45 countries

Send to Kindle

ANOTHER damning report about Cyprus’ reluctance to enforce the law against the killing of protected bird species was issued this week. It was not the first and it would certainly not be the last such report given the authorities dubious stance, based on the misguided belief that it could keep both sides happy – conservationists and poachers – when this is practically impossible.

There is no middle way for issues in which there is right and wrong. The use of mist-nets and lime-sticks to trap hundreds of thousands of birds is against the law and should be stopped. However, the authorities seem to believe that by occasionally enforcing the law and taking a few poachers to court every year the state was fulfilling its conventional obligations. This allowed it to argue that it was enforcing the law, but could not catch all the law-breakers.

While this argument would be valid with regard to burglaries and arson attacks, it cannot hold sway in relation to bird-poaching, which takes place in specific parts of the country and at specific times of the years everyone is aware of. If the authorities genuinely wanted to stop bird-poaching they could have done so, but the truth is that they do not want to alienate the law-breakers who, with their families account for many votes in the Famagusta district.

The ambiguous stance of the authorities was recorded in the latest bird protection report prepared by activists from the Committee Against Bird Slaughter (CABS) and the Foundation Pro-Biodiversity (SPA) that were in Cyprus in April to collect information and monitor the enforcement of anti-poaching laws. Members of the groups took part in police operations that confiscated over 3,000 lime-sticks, but the minister of justice Ionas Nicolaou called off the police raids, after pressure was applied by protesting locals who claimed that the activists were trespassing and destroying property.

Poachers have strong support from the political parties, which had tried in the past to reduce the punishment for poaching, because of the many votes they represent. Populism it appears is stronger than the rule of law. But rather than taking this ambiguous stance of occasionally enforcing the law and occasionally pandering to the law-breakers, the authorities should take a decision and stick to it, because they are fooling nobody.

In fact, there are broader implications to this stand. It sends out the message that rule of law is a negotiable principle and that the authorities are willing to turn a blind eye to some forms of law-breaking.

Send to Kindle

By Poly Pantelides

OUTPATIENT numbers at the state’s overworked hospitals dropped by half overnight with yesterday’s introduction of new charges, the health minister said.

Petros Petrides said state hospitals were reporting “a conspicuous reduction in patients” with staff in Nicosia General Hospital’s Accident and Emergency (A&E) department seeing half of the patients they would ordinarily attend to. It now costs €10 to visit the A&E.

“This was expected as patients visited hospitals en masse over the previous few days for lab tests and exams,” Petrides said.

Between Monday and Wednesday, the last remaining days where state healthcare beneficiaries could get lab tests and prescription medication for free, there were twice as many hospital visitors as normal, the minister said.

One state hospital that would normally see up to 800 visitors a day, dealt with an influx of an additional 400 on Wednesday, Petrides said. Another one whose staff normally serves up to 1,200 patients, welcomed almost 2,000 on Wednesday, he added.

Health care changes include new income criteria for beneficiaries and the introduction of hospital fees for visiting doctors, the A&E department, for lab tests and prescriptions. They have been in the making for months, and have been agreed with Cyprus’ troika of lenders. Most of the changes are designed to prevent abuse of the overburdened state health care system.

Nicosia General Hospital’s Chief Executive Officer, Petros Matsas said that whereas some 80 people had visited the hospital’s A&E department from Wednesday afternoon until midnight, less than 40 people had visited by 12pm on Thursday.

Yesterday. “The hospital saw a 40 per cent reduction in general compared to the previous days, same with the Makarios children hospital,” he said. “It’s calm. We hope it stays this way,” he added.

While the new system might have proven beneficial to hospitals in terms of lowering patient lines, many outpatients complained to television cameras about the cost, even though the system is means tested and designed to be affordable to those on low incomes.

Matsas said hospital staff were on standby to help outpatients yesterday as many did not understand the new system. He said however that many had come prepared having already purchased the stamps – showing the due fees had been paid – which now need to accompany prescriptions and lab tests’ requests.

The stamps can be purchased at eight different spots within the hospital as well as the main entrance’s registration point, he said. They can also be bought at post offices. Meanwhile, hospital screens informed patients of changes. Those were mostly in Greek but there will also be in English from next week, Matsas said.

A young woman who had visited the hospital from the Nicosia mountain village of Kakopetria said that she had been informed of the changes in the system via the media. “It’s been straightforward,” she said. She was waiting to pick up a medicine prescription. A woman whose husband had to be admitted in the A&E department said that most people she had seen yesterday had been brought in by ambulance.

At about 12.45pm on Thursday, she was one of less than a handful of people at the almost empty waiting room at the A & E. “Accident and emergency departments had ended up functioning as outpatient clinics, and many times people would come to use them who were not even beneficiaries,” Petrides said.

But with the introduction of a €10 fee to use hospital’s emergency services, the health ministry’s hope is that the department’s workload will drop.

The Green Party’s George Perdikis reported a few glitches in the system, such as some post offices not having the stamps – despite claims they would all be stocked up – or older people not fully understanding the changes.

“I hope the health ministry is on standby to resolve any omissions observed,” he said.

Ruling party DISY MP Stella Kyriakidou recommended a three month review of any problems in the new system. She recommended, for example, alternative solutions for frequent visitors, such as children who need to regularly consult an array of doctors.

HOW IT WORKS

ALL BENEFICIARIES of state subsidised health care need to pay €3 to see a general practitioner, €6 to see a specialist doctor and €10 for using the state hospitals’ oversubscribed accident and emergency department. Payments are on the spot and a receipt must always be issued.

Certain groups, including those who receive state benefits will continue being able to use accident and emergency departments free of charge on display of official identification.

People will now need to pay a nominal fee of 50 cents for drug prescriptions and lab tests. Although capped at €10 per transaction, the health ministry hopes nominal fees will discourage people from ordering lab tests they do not need, and might help address long waiting times for test results. Stamps for lab tests and prescriptions are available in state hospitals and postal offices and may be bought in advance.

They have a value of 50 cents, €1.00, €2.00 and €5.00, to represent the fees paid by patients who must stick them on the back of prescriptions and lab test orders. Patients then deliver the paper-plus-stamp to the relevant official (e.g. at a hospital pharmacy) and get their medicines or their lab tests done.

Beneficiaries of the new unified system – with one health card across the board – are civil servants and their dependents in return for a 1.5 per cent contribution of gross salaries, as well as those who receive state pensions.

Five-member families may voluntarily contribute the same 1.5 per cent of their gross salaries to ensure coverage. Some sufferers of chronic diseases will be automatically entitled to healthcare. For those not asked to make contributions, there will be sliding income criteria starting at €15,400 yearly for individuals, to €30,750 yearly for four-member families, plus an extra €1,700 per additional dependent.

The definition of “dependent” has changed to include anyone up to the age of 21, or who is dependent on parents, including students and soldiers.

Most private sector pensioners will continue being eligible for state healthcare based on income criteria, and even non-beneficiaries will have access to the system, on charges that are set to rise by 30 per cent but are still attractive compared to the private sector.

Non-beneficiaries may also use state hospitals, paying €15 to visit general practitioners and €30 to see specialist doctors. Cypriot and EU citizens who permanently reside in Cyprus are eligible to apply for a health card entitling them to subsidised state health care only if they have paid in at least three years’ social insurance (contributions do not have to be continuous), and have complied with all their tax obligations.

Existing health cards issued by the health ministry will be phased out over the year. Health cards issued by other government bodies, such as social insurance will remain as is. This applies to political refugees who are issued health cards by other bodies. Health cards previously issued to Turkish Cypriots have already expired, and new ones need to be issued at the health ministry in Nicosia directly. Current health cards with no expiration dates (the date in those cards is 09/09/9999) and cards issued by the health ministry to chronic illness sufferers will be cancelled at the end of October.

Current health cards with expiration dates will stop being valid at the end of January, 2014. To obtain a new health card, beneficiaries must visit a citizen’s service centre.

Send to Kindle

Former defence minister Costas Papacostas was sentenced to five years jail on Friday on charges of manslaughter for his role in the July 11, 2011 Mari naval base blast, in which 13 sailors and firemen died.

The three other men convicted on July received sentences of two years each.

On July 9, the court convicted Papacostas of manslaughter, while firemen Andreas Nicolaou, Charalambos Charalambous and commander of the disaster response team EMAK, Andreas Loizides were found guilty of causing death due to reckless and dangerous acts. The court said at the time that Papacostas had “closed his eyes to the danger”.

It said on Friday that the three others did not have primary responsibility at the time of the explosion. but failed to handle the situation as they should have.

The former minister was not in court n Friday and remains at the Nicosia General Hospital where he has been since July 9, the day of the verdict, said to be in poor health.

Handing down its verdict, which took around one hour, the court said the four were part of a political system that had, with a series of mistakes and omissions, led to the explosion of 98 containers kept in unsuitable conditions at the Evangelos Florakis naval base for two years.

The Larnaca court did acknowledge the history and contribution Papacostas had made to his country, while taking into account his health. Papacostas will be 74 this year. It had also taken into account the family situation of the other three men, it said.

According to reports, relatives of the 13 victims who were at the court on Friday said the sentences were not sufficient given that 13 people died in the blast.

Send to Kindle

By Maria Gregoriou

A TAVERN in the Aglandjia suburb of Nicosia has become the target of threats and ‘hate mail’ after a kitten was allegedly hit and kicked onto the road after jumping on a table in the establishment while customers were present.

The story spread like wildfire on social media, and a protest has been organised for tonight at 9.30pm outside the restaurant – Steki tou Kosti tavern.

According to Facebook yesterday, over 1,000 people will participate.

Aside from the protest, some of the threats posted on the web include wanting to tie the alleged culprit to a car and drag him until he died, beating him until he died, putting him in the electric chair and cutting his hands off.

The incident with the kitten took place on July 26 in front of around 30 customers at the tavern, according to reports, which got back to Andrea Barlow, the organiser of the protest, which she says is intended to be peaceful.

Barlow said the cat was hit with a cane after it jumped on one of the tables. “The kitten fell and broke its spine…a waiter then kicked it into the road and a car ran over it. Whether the kitten died because of the abuse or because of the car is not clear,” Barlow said.

She said two women found the incident so upsetting that they got up and left the tavern and posted their experience on internet blogs. The Lykavitos police station has also received a complaint and is aware of the situation, it said.

One of the owners of the tavern, Demetris Georgiades, updated a statement on the establishment’s Facebook page on July 29 apologising for the incident.

Speaking on behalf of the three owners, Georgiades said: “We are truly sorry for the unfortunate incident that took place at our tavern on July 26. None of the three owners were at the tavern on that night and we found out about it the next day.”

He said they had immediately fired the alleged offender – the waiter. He did not address the allegation that it was an old man with a cane, said to be father of the owners, who had first hit the cat before the waiter kicked it into the road. He was not one of the actual owners, the post said.

Georgiades said the tavern’s owners condemned the incident but also believed that the matter was blown out of proportion. “We would like to make it clear that we are animal lovers. We are family men with children who have pets at home,” he said. He said the kitten in question was confirmed to still be alive and in good health. “Anyone wishing to verify this may come and see for themselves,” said Georgiades.

But the apology was to no avail. By then readers were incensed and an armchair lynch mob was in full swing.

A post that went viral shows a picture of an upside down white cross on a black background with the words: ‘At the Steki tou Kosti tavern in Aglandjia Nicosia, animals are killed. Spread the word and react!’

The picture is accompanied by a post saying: “We cannot make murderers and sick people love animals, but we can make them respect them.” It ends with: “Guess what sucker: we will close you down.”

Other comments across the web included: “If I had the old man in-front of me now I would break his face, then I would tie him to my car and drag him until he died.”

“I hope the protest shuts down the tavern. I hope they beat him up so he can see what it feels like,” another commentator said.

“I wonder why someone didn’t take a cane and beat him until he died, just like he did to the kitten,” said another.

“Wasn’t there one person there? Just one person there to cut off his hands?” wrote another.

“He deserves the electric chair and may he go to hell, the horseshit of society,” another said.

Georgiades’ post had asked people desist with the threats and insults. “The various allegations against us in different blogs are unjust and affect each one of us individually so we kindly ask that they be stopped,” he said.

According to sources close to the family yesterday, they have sought legal advice and will be taking certain individuals who have threatened them to court.

Asked about the backlash, Barlow said: “If the family is receiving threats then that is unacceptable”. When asked about Georgiades claims that the kitten was still alive and well, Barlow said this was simply proof that the incident did actually happen.

“The protest [tonight] is a message to other people who are doing this kind of things. Since the announcement has gone out, many people have come forward with names of people or describing similar incidents around the island,” Barlow said.

Barlow continued by saying that the protest was not a personal attack against whoever allegedly beat and kicked the cat.

“The protest is about the respect for life and giving animals their rights. Cyprus has laws against animal violence but they are not being put in place so we will start at the tavern and proceed to the police headquarters to ask the police to take action,” Barlow added.

Barlow and the sources close to the family both said the municipality should take action to control the cat population.

“If the population is at a reasonable amount, then the cats will be fed and will not jump on tables to find food. Violence towards them will be limited and both us (animal lovers) and tavern owners’ will be much happier,” Barlow said.

Protesters will meet at meeting points market out on the Facebook page https://www.facebook.com/events/164064773777614/ at 7.15pm. From there they will walk to the tavern and then head to the police headquarters

Send to Kindle

THE FINANCE ministry announced yesterday that it was easing restrictions regarding the opening of new bank accounts. The new provisions are included in the 19th decree on capital controls.

According to the decree, anyone can open a bank account, provided that the account is a new fixed term deposit created with funds in excess of €5,000 and the term of the new fixed-term deposit is at least three months. It is also stipulated that the new fixed-term deposit could not be terminated prior to its maturity.

The account can be open provided that upon the first maturity of the fixed term deposit, the funds from the deposit will not be subject to specific restrictive measures imposed by the decree and provided that the opening of a current account for the beneficiary of the fixed term deposit is prohibited.

It can also be opened if the account relates to a new loan.

The opening of a current account related to the new loan is permitted only if the said current account will only be used for the servicing of the loan and all deposits into the account will be used for the servicing of the loan and no other transaction.

The decree also allows the opening of a new bank account, provided that the loan proceeds must be disbursed into a current account, within the same or another credit institution, within Cyprus and shall be subject to the restrictive measures applicable to current accounts.

Send to Kindle

By Tom Perry and Michael Georgy

The United States said on Friday it would work with other nations to resolve Egypt’s crisis peacefully, injecting new energy into a push to end a bloody standoff since the overthrow of Islamist President Mohamed Mursi.

A day after saying the army had restored democracy by removing Mursi, U.S. Secretary of State John Kerry urged Egyptian authorities to give demonstrators the space to protest in peace – a warning against dispersing pro-Mursi sit-ins.

“We will work very, very hard together with others, in order to bring parties together to find a peaceful resolution that grows the democracy and respects the rights of everybody,” Kerry said before a meeting United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed in London.

The meeting appeared to signal a new diplomatic effort to end the crisis in which more than 300 people have been killed. The army removed Mursi and his Muslim Brotherhood from power on July 3 in response to mass protests against his rule.

With the European Union already mediating, the new push will rely on the United Arab Emirates to work with the army-backed interim government and Qatar, which supported the Mursi administration, to liaise with the Brotherhood.

Analysts say civilian members of the interim cabinet are trying to promote a political solution despite resistance from security services that want to crack down on the Brotherhood, encouraged by an outpouring of public anger at the movement.

Mohamed ElBaradei, vice president in the new administration, said he was lobbying for talks with the Brotherhood, while others advocated crushing it.

“People are very angry with me because I am saying, ‘Let’s take time, let’s talk to them’. The mood right now is, ‘Let’s crush them, let’s not talk to them’,” he said. “I hope the Brotherhood understands that time is not on their side. I’m holding the fort, but I can’t hold it for very long.”

Egypt is more polarized than at any time since the downfall of autocratic president Hosni Mubarak in 2011, complicating mediation efforts in a pivotal Arab state fraught with unrest.

The Brotherhood, decrying what it sees as a coup against the country’s first freely-elected head of state, escalated its protest campaign by announcing two new sit-ins and three marches to sensitive security facilities.

Its supporters clashed with police during a protest near a complex of television studios outside Cairo. Police fired tear gas to disperse the crowd. State media reported army helicopters overhead and said two policemen were wounded by birdshot in what it described as an attempt to storm the complex.

The Brotherhood said the security forces had fired tear gas on peaceful protesters. Seven Mursi supporters were also injured, security sources said.

State TV reported that the Interior Ministry would impose a cordon around two large pro-Mursi Cairo sit-ins within 48 hours and that the police did not want to break them up by force.

Following the deaths of around 80 Mursi supporters on Saturday when security forces opened fire near one of the sit-ins, government pledges of action have raised concerns of more casualties. By pushing back any move to break up the sit-ins, the government has given the mediation effort a chance.

With the United States supplying Egypt with $1.3 billion in military aid each year and the United Arab Emirates having pledged $3 billion to the new administration, the countries may be able to help force a compromise with Qatar’s help.

In London, Sheikh Abdullah said a peaceful resolution required “inclusive dialogue”.

The government has drawn up a transition plan envisaging parliamentary elections that will start in about six months.

But the Brotherhood protests are threatening to rob the government of a semblance of normality it needs to revive an economy which is in deep in crisis.

SISI SEES NEED FOR POLITICAL SOLUTION

Mursi has been in detention since he was deposed and is facing a judicial inquiry into accusations of murder and conspiring with the Palestinian group Hamas.

The authorities have also rounded up many other Brotherhood leaders accused of inciting violence, feeding international fears of a plan to uproot a group that was suppressed for decades until Mubarak’s overthrow. The government accuses Mursi’s supporters of taking up arms, alleging they engage in terrorism.

ElBaradei, former head of the United Nations nuclear watchdog, outlined ideas for a political deal that might include a pardon for Mursi and guarantees that the Brotherhood would have a place in political life. He said army chief Abdel Fattah al-Sisi understood the need for a political solution.

“But of course he has a responsibility to protect the country in terms of security. And the army is on the edge.”

He said dialogue was the way to end the Brotherhood sit-ins. The government has promised to deal with protests it sees as a threat to national security. “I do not want to see any more bloodshed. Nobody wants that,” ElBaradei said.

“They need to cooperate,” he added, in reference to the Brotherhood. “But they need of course to feel secure, they need immunity, they need to feel that they are not excluded. It’s things we are willing to provide.”

He added that Sisi, who has gained enormous popularity since deposing Mursi, was not thinking of running for president.

“WE’RE NOT TERRORISTS”

The biggest sit-in is in northeast Cairo, where several thousand Mursi supporters have been camped out for more than a month in a protest that at times swells to tens of thousands.

“We are here with our wives and children. We don’t want violence,” said Ali el-Shishtawi, a government employee at the sit-in. “We’re not afraid. We’re not terrorists like they say.”

Amnesty International issued a report saying Mursi supporters had tortured some of their political rivals, saying anti-Brotherhood protesters had reported being been captured, stabbed, beaten and subject to electric shocks.

It said eight bodies had arrived at the morgue in Cairo bearing signs of torture, five of which had been found near pro-Mursi sit-ins, and called for an investigation.

The new government gained a U.S. seal of approval late on Thursday when Kerry said the army had been “restoring democracy” when it toppled Mursi – Washington’s strongest endorsement yet for the new leadership.

“The military was asked to intervene by millions and millions of people, all of whom were afraid of a descent into chaos, into violence,” Kerry told GEO TV in Pakistan. “And the military did not take over, to the best of our judgment – so far.”

Washington’s efforts to avoid calling Mursi’s overthrow a “military coup” has left it open to charges of sending mixed messages about events in Egypt, long a bulwark of U.S. Middle East policy.

Mohamed Ali Bishr, a senior Brotherhood leader, said the movement was disappointed by Kerry’s statement. “The United States is a country that speaks of democracy and human rights and they say something like that. I hope that they rethink their position and correct it,” he told Reuters.

Send to Kindle

By Poly Pantelides

THE ISLAND’S biggest lender’s expansion overseas was driven by a risky lending policy, which led to an increase of non-performing loans and risky assets, the Bank of Cyprus’ (BoC) internal auditor has said.

Constantinos Tsolakis testified yesterday in an inquiry into how the country’s banking system and economy degenerated in the years leading to March’s €10 billion EU/IMF bailout.

Tsolakis, the BoC’s internal auditor since 2007, witnessed the bank’s expansion in markets including Russia in 2008 through the purchase of Uniastrum Bank. In the summer of 2012, the bank asked for a €500 million bailout to meet its recapitalisation needs following the loss of the majority of over €2 billion of Greek government bonds purchased in late 2009 and early 2010, which were written down during a sovereign debt write-down in 2011.

Between 2006 and 2011 loans would be handed out even lacking evidence they could be repaid, or even when clients’ previous loan agreements were problematic, Tsolakis said. “Relaxing the criteria for loans translated to an increase in non-performing loans (NPLs),” he said.

As part of Cyprus’ bailout, the BoC came under the administration of the Central Bank and emerged on the other side only this week after its uninsured depositors were forced to recapitalise it. Depositors have had to accept the conversion of 47.5 per cent of their deposits larger than €100,000 into shares.

In the previous years, between 2006 and 2011, the bank became saddled with problematic loans, including some that came in tow with Uniastrum. Tsolakis said the new recapitalised BoC has decided to push ahead with legal action to pursue compensation in relation to the Uniastrum loans. He was not asked to elaborate, but the circumstances of the purchase are part of an ongoing criminal investigation.

Tsolakis conducted a special investigation in relation to three clients, and interviewed five bank employees, he said.

One bank employee said that any suggestions he or she would make, would not be accepted if they could possibly lead to the loan request being rejected. “Whenever I could, I included terms to improve bank positions, but that was not always possible,” the same bank employee told Tsolakis.

Another bank employee said that because of “upper management’s desire to expand” they were forced to grant loans that did not meet all lending criteria. “Because of the culture in the bank, I couldn’t easily express disagreement,” the employee told Tsolakis who was interviewing him in relation to a €20 million lending limit extended to a client in relation to an immoveable property purchase.

“It is this culture that brought the bank to this dire condition,” Tsolakis said.

A consequence of increasing lending was that in the short term this pushed up profits after tax and generated arguments for executives’ big bonuses, granted at the end of the year, Tsolakis said.

“NPLs had no impact on bonuses… because the management team had already received the bonuses.”

Meanwhile, the bank continued investing in risky Greek debt, presenting those bonds as “held to maturity,” an accounting action allowing the bank to present the bonds at face values and not current values, avoiding showing losses on the bonds, as NPLs eroded the bank’s balance sheets.

In December 10, 2009 former BoC chief executive Yiannis Kypri told financial news portal Stockwatch the BoC had reduced its exposure to Greek sovereign debt to roughly €0.1 billion (Tsolakis said it was €180 million). About a year later, the BoC came to hold over €2.0 billion, suffering major losses as a result.

“To the question, did the board know? The answer is that since financial reports were being presented every three months… yes, the board must have known about the purchases,” Tsolakis said.

He also relayed a report by former chief executive Yiannis Kypri who claimed that in a May 2010 board meeting in Greece, board member Costas Severis suggested to former CEO Andreas Eliades they sell the Greek bonds.

“Eliades unleashed a scathing attack and no other board member expressed a different view,” Tsolakis said.

Tsolakis said Eliades informed him in July 2001, when Eliades was forced to step down, that Central Bank governor Panicos Demetriades asked for Tsolakis’ resignation. A few months later, in November 2012, Tsolakis handed over a special report to the Central Bank at their request. Though Tsolakis’ describes bad governance practices implicating Eliades and former group general manager of risk and markets, Nicolas Karydas, he never interviewed them.

Tsolakis was asked to comment on Eliades’ loans and referred to some €2 million Eliades had taken out in Greece.

Although presented as a housing loan, only €280,000 went towards housing needs, and the rest was used by Eliades to pay back debt in Cyprus, Tsolakis said.

Send to Kindle

By Stefanos Evripidou

PARLIAMENT IS working to limit the powers of the Central Bank of Cyprus (CBC) as the resolution authority over the former Laiki (Popular) Bank and wrestle control of the majority shareholding in the new Bank of Cyprus (BoC) from the Laiki administrator, it transpired yesterday.

When the Bank of Cyprus (BoC) recently completed its recapitalisation process to come out of administration, the largest single shareholder turned out to be the former Laiki, represented by its administrator who is now effectively in charge of Laiki’s 18 per cent shares in the newly restructured bank.

This led DISY MP Prodromos Prodromou to question whether BoC has really exited the resolution regime at all, since in fact, 18 per cent of the new BoC remains under the control of the Laiki administrator, appointed by the Resolution Authority, headed by CBC governor Panicos Demetriades.

With the new BoC’s annual general meeting on the horizon, there appears to be concern by some that Demetriades will have influence over the largest shareholder in the BoC, and thus over the bank itself.

MPs are now examining ways to transfer control of the 18 per cent share capital in the BoC from the CBC-appointed Laiki administrator to Laiki’s creditors, including those who lost millions in uninsured deposits.

President Nicos Anastasiades yesterday confirmed as much when he said that the matter was being discussed in parliament while banking sources told the Cyprus Mail that the CBC board will review the issue on Monday.

Asked yesterday how one could guarantee that the Laiki administrator will manage Laiki’s shares in the BoC in a manner that will satisfy Laiki’s shareholders (mainly its uninsured depositors who took a massive hit after the Eurogroup’s decision to wind down Laiki last March), Anastasiades replied: “I understand the entirely justified request of Laiki shareholders who represent 18 per cent (of the BoC).

“At the same time, I understand that certain processes are underway in Parliament to see how they (Laiki’s creditors) can safeguard this 18 per cent, and not the administrator or liquidator of Laiki Bank. I will respect any decision taken in a democratic manner and after study by the legislative body.”

The issue has the potential to spark a new dispute between ruling DISY on the one hand and CBC governor Panicos Demetriades and by extension the troika on the other.

Prodromou has already flagged the principles of transparency and corporate governance, saying: “It is not possible for a public authority, namely the Central Bank, to be simultaneously the supervisor, the principal creditor and the biggest shareholder of a bank.

“How will the Central Bank be able, if needed in the future, to monitor decisions and actions of the management of the (BoC), if at the same time it is controlling it through its share capital?”

Local daily Politis yesterday reported that DISY leader Averof Neophytou is working on a strategy to convene a special session of parliament during the summer recess to amend the resolution law passed in March, limiting the powers of the resolution authority, and either removing Laiki’s voting rights in the BoC, or dispersing the 18 per cent among Laiki’s shareholders (in their majority uninsured depositors whose savings were wiped out).

“They should at least receive the shares that are allocated to them and have a say in the decision-making process regarding the future of the Bank of Cyprus. There is no logical argument for excluding them from the process,” said Prodromou.

However, banking sources said yesterday that the CBC is aware of the ethical dilemma regarding the 18 per cent and will convene on Monday to discuss how to deal with the matter.

They explained that the BoC shares cannot legally be transferred to and divided among Laiki’s creditors until Laiki enters into liquidation. This cannot happen until the latter sells off its subsidiaries in Romania, Russia, Malta and Serbia.

If Laiki enters into liquidation and has its licence revoked, without selling off its subsidiaries, measures will likely be taken by the national supervisory authorities in the countries where the subsidiaries are operating.

In the meantime, the aim of the administrator is to protect the creditors’ interests and ensure the BoC is profit-making.

The same sources questioned on what grounds parliament would remove the voting rights of the biggest shareholder in the new BoC, and how far this scheme would go with the troika.

Send to Kindle

THE GENERAL view, regarding the elections in the north, was that the Turkish Cypriots voted against the Turkey-‘TRNC’ protocol, which envisages cuts in public sector spending and the privatisation of publicly-owned companies.

Although no party won an outright majority and a coalition ‘government’ would have to be formed, the ruling National Unity Party (UBP) was punished by the voters for its support of the much-hated protocol; the in-fighting, which continues post-election, and the recession did not help. Its share of the vote went down from 44 to 27 per cent, while its ‘prime minister’ was not re-elected.

But the new ‘government’ will be in no position to rid the north of the protocol which, ironically, was signed in 2009 by the Republican Turkish Party (CTP) that was the clear winner of last Sunday’s elections. When UBP came to power subsequently it was also forced to sign the protocol by Ankara. The CTP is likely form a coalition with Serdar Denktash’s Democratic Party that made significant gains at the expense of UBP. Before the elections Denktash had declared he was opposed to Ankara’s privatisation plans.

The problem for the north is its financial dependence on Turkey, which has been financing the breakaway state ever since its establishment. The debt to Ankara is now US$3.2 billion while the regime also owes US$1.5 billion to local banks, making its public debt, according to university estimates, 145 per cent of GDP. As we all know, such a debt is unsustainable, which is why the Erdogan government has been pressing for drastic public sector cuts and privatisations.

Resisting is futile, because Ankara could simply turn off the cash taps and public sector workers would not be paid.
The hollowness of the argument used by the CTP in the election campaign – that it would not implement the protocol in the way the UBP was implementing it – will be exposed, before long, because the Erdogan government will not back down. It will reduce the cost of the public sector and sell off ‘state’-owned companies to the private sector, regardless of Turkish Cypriot opposition and protests. The paymaster always calls the shots.

The election results will change nothing in the north. The implementation of the protocol will continue in the way Ankara sees fit. Despite the political rhetoric Turkish businesses will take over the ‘state’-owned companies and the bloated public sector will eventually be downsized as Turkey is determined to cut its losses in the north. The Turkish Cypriots must realise that as long as they are financially dependent on Ankara, they will not have much say over how they run their economy.

Send to Kindle

By Poly Pantelides

THE JAIL sentences handed down to former defence minister Costas Papacostas and three others found guilty in the Mari trial failed to satisfy relatives of the 13 victims yesterday.

And, presiding judge Tefcros Economou said that no punishment made sense if the state itself did not also change the mentality which led to the deaths in the first place.

Papacostas was given five years on charges of manslaughter while former fire service chief Andreas Nicolaou, former deputy chief Charalambos Charalambous, and Andreas Loizides, the former commander of the disaster response squad EMAK were each given two years.

“All of this will acquire meaning only if a new mentality prevails to place legality above all else and place true respect towards life at the heart of the thoughts and actions of those exercising power,” said Economou.

“Otherwise, the twisted system will proceed unhampered on to the next tragedy,” he added.

Relatives of the sailors and firemen who were killed in the blast, cried on hearing the sentencing.

Bursting into tears, the mother of fireman victim Vassilis Krokos who said: “I have a dead [son]. You can’t bring him back.”

“I am a woman clad in black. I won’t have my son, my brave lad,” said the mother of fireman Panayiotis Theofilou, outside the court room. Her husband later told reporters that the sentences were not severe enough.

Father of fireman Spyros Ttantis who also died in the blast called the sentence a “betrayal of the 13 people who were killed in Mari.”

“Everyone was responsible,” he said, trying to contain his tears. He expressed his anguish at the authorities not informing the firemen, his son among them, of the dangers and ordering them to approach the site. “My son wouldn’t go near for 48 minutes but the order came for them to proceed,” he said.

The munitions, confiscated in 2009 from a Cyprus-flagged ship sailing from Iran to Syria, had been stored at Evangelos Florakis base in 98 containers near Mari left exposed to the elements until the day of their explosion.

The blast killed seven sailors and six firemen and damaged the island’s biggest power station, nearby.

“This was a universal, inexcusable and infuriating malfunction of our political and administrative system and that the accused were part of that system,” the court said, in handing down the sentences, which took about one hour.

“They were aware of a real risk of death and despite that they failed to act as they should have,” the court said.

On July 9, the Larnaca criminal court Papacostas guilty of manslaughter. Nicolaou, Charalambous, and Loizides, were found guilty of causing death due to a reckless and dangerous act. Papacostas, 73, faced a maximum sentence of life imprisonment, while the other three faced up to four years in jail. All the guilty parties have reportedly appealed the court’s decision.

Papacostas was not in court as he has been in the Nicosia General Hospital since the day of the verdict.
The former minister, who quit hours after the naval base blast, suffered an aneurysm about two years ago and has ongoing heart, blood pressure and kidney problems.

Papacostas’ doctors have said that imprisonment could reduce his life expectancy and lead to his health deteriorating to such an extent that he could end up facing end-stage kidney disease, the court said. According to the UK’s National Health Service, this would necessitate dialysis. “In such a case, keeping [Papacostas] in prison would be particularly onerous,” the medical reports said. Authorities are expected to take any measures necessary in relation to Papacostas’ health treatment, the court said. His doctors have not yet okayed his being taken out of hospital, however.

However the court said the former minister’s omissions over time and his awareness of the danger were “unquestionable”. “The result has been the deaths of 13 people.”

The Larnaca court did acknowledge the history and contribution Papacostas had made to his country, while taking into account his health. It had also taken into account the family situation of the other three men, it said.

In relation to Nicolaou, Charalambous and Loizides, Economou said that they were indirectly responsible for the blast in the sense that they had not handled the situation as they ought to have.

Two others charged in the case, former foreign minister Marcos Kyprianou and deputy National Guard commander Savvas Argyrou were acquitted on July 9.

In relation to former national guard chief Petros Tsalikidis, who is a Greek national, the court said that it did not know “if and when prosecution in Greece would proceed.” “The fact Tsalikidis was not among the persons who are to be punished today, constitutes in one way or another unequal treatment and creates feelings of injustice among the accused and society,” the court said.

Send to Kindle

On June 1 this year you published an ‘Open Letter’ from me to the President. This sought for him to explain the logic of the island’s 10% expatriate community being unable to vote in any election for a Cypriot President by comparison with the UK welcoming General Election votes from some 300,000 resident Greek Cypriots from the day they arrive.

We pay taxes here; we provide employment; we own property; we are consumers; we have to suffer whatever a given President decrees, and now, for goodness sake, we are required to assist with the reversal of the country’s largely self inflicted economic woes. Probably needless to say, this `Open Letter’ received no response, so I cut it out and sent it with a covering note to President Anastasiades at the Presidential Palace, asking him to find a few minutes to reply.

Now I accept that currently he is feverishly busy with Great Matters of State. But then wouldn’t common courtesy suggest he could reply to a civilised and reasonable enquiry affecting thousands of people? Apparently not. .But, to be fair, he has five years ahead of him to sort this anomaly. I made it clear that throughout this period I would commit to this campaign, as I have with the crematorium issue, so there will be no giving up on a principle which seems to me to be wholly beyond debate.

Clive Turner, Paphos

Send to Kindle

I am disgusted about a the news that is coming to light, but as we all know, no-one will be brought to justice since everyone who has amassed their wealth over the last years is either a politician/government official, protected by a politician/government official or has bought off a politician/government official.

Like the majority of non-civil servant employees, who are not privy to low interest loans, sick leave/holidays at a whim, payment of overtime and a holiday each year to the mountains in the “holiday complexes”. I have worked and paid my taxes and will now work to pay retirement plans offered to civil servants and pay back the loans to the EU.

Surely laws have been breached, laws like, market abuse, insider knowledge, miss abuse of power, to name a few, surely all these “businessmen”/politicians/government officials have broken laws which they should now be tried for. Why has the government not frozen and taken possession of assets of more of these persons?

With revelations such as: ‘Inquiry hears of millions owed by big names’ surely there is enough “reasonable cause” for all these developers to have land and property seized by the government in order to pay back the EU and restore some stability. BoC will be divided into two banks one for normal banking business and another to take on “property” What does this mean? To me this simply tells me that the average working person will have his/her house and land taken back by the bank under the “reason” that the inflated loans (the only means of acquiring property) have not been repaid. But who will benefit? The only persons who will be able to buy the property/land albeit at a lower price are the land developers who have directly been involved in bringing the country to its knees in the first place, so the middle class will now the “poor” and the rich will get richer?

In my opinion the government should investigate loans which have been struck off, loans which have been given without substantial security and the persons who “stole” this money should have their assets taken away and any property included in these assets should be “given” to non-civil servants who are in need.

Prior to the bail in, discussions arose about tax evaders, and how much is owed to the government from entities/persons which have not paid their taxes, instead of seeking out the working class, why doesn’t the income and tax authorities look into the fat cats finances? Why is my business being hounded by the income tax authorities for the last 2 years, they have spent all this time trying to find something but, l am clean, they have said as much, but so that the civil service employees don’t show that they have wasted their time l am still being slapped with a EUR20, 000 payment, Who do l appeal to?

I am sick to my stomach, l may have to close my business, l may lose my piece of land which l purchased as a nest egg for my 3 children, not to mention my house. But l am one of many in the same situation and to hear of civil servants making demands on retirement plans backed by fat cat union officials sickens me more. They’ve all had it good for so many years. I say welcome to the actual working class, where you have to prove your worth to keep your job and work overtime without pay when needed and not complain!

And another thing, why are all new “taxes” designed to hit the working middle class, surely it’s about time new taxes should hit the rich. Why will l be now taxed an extra burden in these hard times on the house l own and live in, surely it would be fairer to leave out of the equation the residential home of all tax payers and tax to be slapped on 2nd, 3rd properties and so forth……. but then that would mean fat cat developers and a land owners would have to pay! Instead of their monthly EUR million income from rent, they will have to make do with EUR800, 000!

The average non-civil servant pays taxes, works hard, but we don’t have a union to voice our grievances and believe me most will feel the same as l do!

Anonymous everyday survivor

Send to Kindle

WHEN people say that mentality never changes, I usually play devil’s advocate and support the contrary, despite my admission that it takes a dramatic event to alter the mindset of the general population. Something so dramatic, for example, as for a country to arrive at the brink of destruction and on the verge of bankruptcy. This is exactly what happened to Cyprus, and no matter how hard some circles try to convince us that our suffering – which we are already beginning to experience – is the fault of others, we, the system and our mentality are equally to blame. And lately, I have started to believe that the events of the past months were not dramatic enough.

Recently, I found myself with a friend at a beach restaurant/bar in Larnaca, which offers its customers the opportunity to select from a limited menu of drinks and light lunches, even serving them right on the sea-front. At around lunchtime we too decided not to abandon our privileged post on the beach (wave-front sunbeds) and to order something that the restaurant was offering. And that is where all of our “odyssey” began.

It took about 15-20 minutes and a lot of effort before we could grab the attention of one of the four or five waiters (all Cypriots by the way). With that task complete, it took even more effort to get someone to take our order – two sandwiches and a drink. Simple order, I hear you say, and we were sure to get what we ordered soon. However, 35 minutes later we had not received any of it, and I politely asked a waiter what was holding up our order. He said he would check what the problem was, and while someone might have expected him to return and brief us on how our order was progressing, another 15 minutes elapsed, during which people that had ordered after us were getting trays of food and drinks.

Extremely disgruntled, I got up and informed the same waiter that he had to cancel the order because we would be leaving. We packed up our things, went through the ritual of washing the sand off our feet, and while we were departing another waiter arrived holding a tray of drinks and inquiring whether we had ordered something. I plainly informed him that it has already been an hour since we did so and I had cancelled the order.

My grievance is not with the delay, mistakes happen and something clearly went wrong. The problem is the treatment I received as a paying customer. The lack of awareness for the customer’s needs, the total lack of service, the indifference displayed – both when I was cancelling the order and when I was informing the last waiter that we were leaving, I was met with a shrug of the shoulders and an “oh well” mentality – the overall mindset. And these are not isolated incidents, nor are they limited to the services sector. This is the general picture of Cyprus.

In the streets, in our homes, at our workplace. As if others should adjust to us and our whims or even our impotence. That others – the “immigrants stealing our jobs” – are of a lower cast, despite their capacity to excel at what they do.

Without the superiority complex that pervades many “locals.” This is where I stopped to believe that the mentality and way things operate in Cyprus could ever change. And I started seeing a country and its people joyfully prancing towards the abyss. Because when we finally wake up, like has happened countless other times, it will be too late.

In the end we visited another restaurant for lunch, where the service was impeccable and where coincidentally none of the waiters was a Cypriot. Needless to say that everything we had ordered was at our table in under 20 minutes from being seated.

Kyriakos Demetriou, Communication Consultant/Political Analyst

Send to Kindle

By Hermes Solomon

MIRACLES TO alleviate dire poverty promised by our president will begin on July the first 2014 and not before. On that date, the poor and struggling will receive help in paying their mortgages or rent, feeding themselves, their electricity and other outstanding ‘exceptional’ bills. Pensioners living below the poverty line (which was around six hundred euros a month) will also be shown some consideration, probably towards heating their homes with coupons exchanged for olives, black bread and sun dried trachanas, staple fodder which fed our forefathers throughout those harsh winter months in the mountains or bitterly windswept plains of this formerly, and now again, impoverished island.
Evidently means tested, specifics remain thus far vague and unannounced, although the value of your home will be included in any welfare pay-out equation – our president’s word as good as his bond. The bad news is that those individuals receiving two or three different pay-outs in total exceeding 2,000 euros monthly will be reduced to one when all social benefit, unemployment and welfare departments come under one roof next year – this move aimed at reducing exploitation of the system and reducing government hand-outs.
We have yet to be told by our president how the impoverished are expected to survive from now until next July – hot air circulating in abundance from the day he took over as ‘chef of the kitchen’ from ‘cauliflower head’.
Householders (many double mortgaged at interest rates of 9 per cent or more) whose title deeds are in the hands of the banks, bankrupt property developers or lackadaisical land registries, will probably be evicted or pay rent to the mortgagee subsidised by taxpayers lest their homes be repossessed and join the long queue of already unsalable and empty properties.
And to cap it all, we are far from finished with surreptitious increases in taxation. My municipality increased the cost of emptying dustbins by 20 per cent this year, removing subsidies to single owner/occupiers and pensioners – we now all pay the same – a family of five and an elderly lady living alone. Are those presidential promises of help in the pipeline ‘pour les démunies’ purely pipedreams?
On what basis will the 2014 Immovable Property Tax (IPT) reassessments be made given the present catastrophic fall in house values?
Last week, a frustrated expat resident of Paphos collected a 2013 IPT assessment form from his local Inland Revenue tax payment office. He completed the form, returned it by hand to a clerk at the IR office, who checked the amounts with the help of a hand held calculator before Frustrated was permitted to pay the tax well ahead of the October 15 deadline. For his supreme effort he received a ten per cent discount.
He noticed that completed expat payment forms sat alongside those of Cypriots – the two piles equal in height when ex-pats number just 10 per cent of the Paphos District population. Could it be that most of my compatriots have yet to register their homes and pay transfer tax never mind IPT?
Frustrated complained about the unfairness of property taxes in general, saying that in all other EU member states it is based on the value of the property with no discounts/allowances for the number of owners whether more than one or as many as ten.
Take IPT here for example: if a property has a valuation of 60,000 euros at 1980 value, a single owner pays 40,000 at 0.6 per cent (240 euros) plus 20,000 at 0.8 per cent (160 euros) which gives a total of 400 euros IPT payable per annum.
Two owners on title deeds pay 30,000 at 0.6 per cent (180 euros each) making a total of 360 euros per annum, a saving of 40 euros.
For larger property values the difference is much greater, which seems unfair to those single person property owners on just one salary or small pension.
On the other hand, transfer taxes charged on the purchase of property highlight even greater disparities, which I will demonstrate in Cyprus pounds as the calculations are easier.
For a single name on title deeds of a property that cost 200,000 Cyprus pounds, transfer fees were charged at 3 per cent on the first 50,000, five percent on the next 50,000 and 8 per cent on the final 100,000, giving a total transfer tax of CY £12,000.
For two owners on title deeds fees were charged on 100,000 each: first 50,000 at 3 per cent, next 50,000 at 5 per cent giving a total transfer tax of only CY £8,000.
If there were four owners of the property, the transfer tax would be CY £1500 each – CY£6000 in total, a saving of CY £6,000 on that paid by a sole owner.
It seems totally unfair that a single person should pay 50 per cent more than a couple or twice as much as four joint owners.
When the govt. introduces the new property tax laws in 2014 are they going to remove ridiculous anomalies?
Were those ‘thousands’ of Chinese property buyers, who purchased their minimum 300,000 euro two room flats, advised by developers to put at least four names on title deeds? If only one, it will have cost the purchaser more in transfer fees than their jerry built flat’s are worth at today’s fast declining values.
My local pharmacist in Nicosia tells me that we should receive IPT bills by early September. Penalty dates for non-payment of IPT have been changed from 15 October to 15 November, after which an extra ten per cent is added to your bill.
By 2014, all property and land will be taxed at new 2014 valuations, says the minister of the interior!
It is currently your responsibility to declare all Cyprus property in your name. Tax will be calculated on the collected sum of your property and not individual properties.
When the unbearable heat has subsided, pop along to your local tax payment office and collect an IPT assessment form.
Those of you awaiting title deeds should beware of criminal hiking of IPT bills by your developer, and frankly, nearly all of them are as seriously bankrupt as our banks!

Send to Kindle

By Theodore Panayotou

THE PREVIOUS government’s procrastination was such that many problems accumulated that needed urgent handling. With the public coffers empty, the banks insolvent, businesses closing down, unemployment rampant, and the economy in recession, there was a lot of fire fighting to do. Then there was the urgent need for consolation measures after the trauma of the Eurogroup decisions that left Cyprus without a functioning financial system. There was no grace period. No one could then criticise the new government for engaging in short term emergency measures in its first few months because it was exactly what was needed.
So we then praised the government for its fast response and its much needed message of empathy: “we feel your pain and we are doing everything we can to alleviate it with quick palliative measures”. Despite their pain and bitterness, people responded positively, communicating reciprocal empathy for a government which was given no honey moon period and was thrown into the Eurogroup den to pay for the sins and inaction of its predecessors. And, then there was the implementation of the agreed upon measures of the memorandum to pass troika’s first evaluation test, which apparently we did satisfactorily. So far, so good.
But it is disheartening to see a government entering its sixth month of rule and still engaging in what can be considered fire fighting: policies without prior articulation of an overall vision for the country. Policy measures for combating unemployment, for restarting the economy, for reforming the public sector, for privatising the public enterprises, for rationalising social policy, for reforming education, for reviving the banking sector, for attracting foreign investment among others, are being formulated in such a piecemeal fashion as to “lose sight of the forest for the trees”.
I, for one, despite my pertinent education as a development economist and 40 years of experience as a policy advisor in two dozen countries, cannot discern the vision, the strategy, and the direction we are taking. I find myself agreeing with many of the individual policies but, when I consider them as a whole, I cannot figure out what they add up to. Is there a new economic model we are pursuing or we are continuing with the old one? Are we designing and building something new which will withstand future tremors and shocks or are we doing patch work and erecting retaining walls to prop up the old structure in the hope that it can be saved for a while longer.
If we are building a new economic model, what is this model and how can we achieve it? Shouldn’t the citizens be inspired by a shared vision and policies be guided and coordinated synergistically by a focused strategy that aims to take the economy from its current disarray and failed economic model into a new era with the new economic model? Psychology and moral fortitude are critical to the success and sustainability of any economic model. We should have learned this lesson by now; it is the root of our current troubles.
Our irrational exuberance and selfish greed of yesterday has landed us in the ruins and misery of today. If, instead of articulating a new vision and a new moral code to inspire people to work towards a better common future, we cater to special interests to secure their political support and loyalty, we are not going very far. For one, there are not enough resources to go around. Second, and more important, we should be fueling collective effort, sacrifice, and hard work, not continued dependence, moral hazard and selfishness.
Ask anyone in the street if they see the light at the end of the tunnel. Their likely response is “what tunnel?” In the same way we should not confuse “activity” with “productivity”, we should not confuse “decision” with “vision”. Like activities, which can be many and varied, but with meagre and disappointing outcomes, decisions for new measures could be many and frequent but they may not add up to much if they are not part of a vision. Actually, individual policies might conflict with each other making the whole less than the sum of the parts, when the scarcity of resources dictates that we maximise synergies to achieve the maximum outcome with the minimum of resources.
Let’s take a recent example. Several policies have been announced to combat unemployment and more recently a new social policy has been announced that extends a guaranteed minimum income for unemployed university graduates, once their unemployment benefits expire. This is a clear invitation for moral hazard, that is, an incentive for unemployed graduates to continue to be unemployed. Instead of converting the “unemployment allowance” into a “work incentive” by requiring any type of engagement, even voluntarism, as a prerequisite for its payment, the new social policy, through the guaranteed minimum income, extends the unemployment benefits indefinitely, covering food and clothing, rent or mortgage, house repairs and even taxes. It doesn’t take rocket science to predict that, as a result, job searching will weaken and the unemployed status will be extended as the pressure on finding a job, or creating one’s own job is diminished by the guaranteed income policy.
As we know, from the work of Nobel Laureate Christoforos Pissarides, a world authority on unemployment and head of the president’s Council of Economic Advisors, the longer one remains unemployed, the lower his incentive to search and find a job. After a year in unemployment, he may even stop searching. Scientific research has found that those who start their career in unemployment have increased chances to remain unemployed in the future and their earnings are 20 per cent lower for the next 20 years with negative consequences on the next generation.
Shouldn’t the employment policy, the social policy, the education policy and the policy on entrepreneurship and innovation be coordinated so as to reduce the time university graduates remained unemployed and cut the cost to the government (the taxpayer more precisely) of unemployment and social benefits? Unemployment means hundreds of millions of euros in unemployment and social benefits and use of public services without contribution to public revenues, a major cause of budget deficits.
The inactivity of 75,000 unemployed people means the loss of over two billion euros annually, since the annual productivity of the average employee is about 30,000 euro a year. And, it is not only the human capital that remains idle and is been degraded. There are also many other resources, natural and man-made, like the land and water, the natural and cultural heritage, buildings and infrastructure, factories and funds which remained idle or underused, while we are begging for funds for investment and development.
Instead of providing a guaranteed minimum income we should be providing a guaranteed employment, analogous to the EU “guaranteed youth employment”, according to which the member states take measures so that young people, up to the age of 25, are offered employment, training, internships, or continuation of their studies within four months from the day they became unemployed. Organised systems of training correct the mismatch of skills between the unemployed and the available jobs and ease the transition from education to work.
The first principle in such a scheme is “nobody who can and wants to work should remain idle”. The second principle is “nobody, who is able to work and chooses not to, should be paid unemployment or social benefits”. The third principle is “if no work in one’s area of skills is found he should acquire new skills through further education, training or internship in order to find a job in another area or start his own business”. The fourth principle is that “if one still is unable to obtain a job, and unwilling to start his own business he should earn his keep (unemployment or social benefits) through voluntary work with communities and non-profit organisations”.
Such an integrated solution to the unemployment problem cannot be conceived by addressing each issue (unemployment, social policy, education, entrepreneurship, innovation) in isolation. Overly theoretical education, misguided career orientation, demonisation of entrepreneurship, neglect of innovation and the perverse incentives of unemployment and social policy have created massive unemployment at the first shock to the system. The loss of the ability in the public sector, the state monopolies, the public education system and the banks to create jobs outside the market by fiat and dictate, has revealed a huge long-term structural problem that cannot be remedied with unemployment benefits.
Effectively combating unemployment calls for turning the issue on its head: a) by converting unemployment benefits from incentives for idleness into incentives for work, b)by reversing the shift from vocational to academic education, c)by demonising idleness and fostering entrepreneurship, and d) by creating a cultural change from imitation to innovation.
I am sorry to say that, the announced new social policy, like the earlier employment policy, treats the symptoms rather than the systemic causes of the problem, and it is certain to have unintended perverse side effects (moral hazard) which may make the problem worse in the long-run, perpetuating the now defunct old economic model.
Without vision, policies put out little fires but do not prevent the next big fire. It is high time for the government to progress from fire fighting to formulating economic and social policy based on an integrated vision and long-term strategy for the country.

Dr Theodore Panayotou is Director of the Cyprus International Institute of Management (CIIM) and ex-Professor of Economics and the Environment at Harvard University. He has served as consultant to the UN and to governments in the U.S., China, Russia, Brazil, Mexico and Cyprus. He has published extensively and was recognised for his contribution to the work of the Intergovernmental Panel on Climate Change won the Nobel Peace Prize in 2007. Contact: theo@ciim.ac.cy

Send to Kindle

By Loucas Charalambous

BELOW is an excerpt from the transcript of the exchange between the chairman of investigative committee for economy, retired judge Giorgos Pikis and Michalis Sarris who was finance minister during the two March meetings of the Eurogroup at which the memorandum of understanding was agreed. The exchange took place on July 25.
Pikis: As minister did you investigate the legal dimension of the ‘haircut’?
Sarris: We advanced the general argument that the decisions were a violation of the right to property and the constitution. The answer from the troika was that constitutions are made to be changed.
Pikis: It is not only the constitution, it is also the convention of human rights which is adopted by the European Union and constitutes a fundamental principle of the charter of rights of the EU.
Sarris: We raised it. Their interpretation was different. There was no clash between the provision and a contribution by depositors.
Pikis: Did you ask for the referral of the issue to the European Court of the Communities for guidance?
Sarris: No, we did not tell them this.
Pikis: In 1974, 38 per cent of Cyprus was seized, there was ethnic cleansing and the influx of settlers. Were these things mentioned?
Sarris: The president made intense and animated representations. The Europeans do not deal with this aspect.
Pikis: It does not concern them that the country is under occupation and that the invasion resulted in it losing 70 per cent of its productive resources?
Sarris: With sadness, I tell you that these (matters) do not concern them.
Pikis: Are you sure they concern us? We asked for support of Cyprus that is under occupation and not its strangulation?
Sarris: We cited, in a forceful way, the difficult situation Cyprus was in. I am not a political person, I fully share what you are saying but for the average European, dealing with economics, these are not issues that concern him.
I often write that with the brains we have, what has happened to us until today is less than we deserve. The man who asked Sarris these idiotic questions had served for many years as President of the Supreme Court of Cyprus. And he is the man whom the government appointed to investigate how the country became bankrupt.
His questions, mentioned above, illustrate the level of thought of the average Cypriot and his political culture. It is the culture which believes we 700,000 jumped-up Cypriots are at the centre of world interest and the target of everyone. It is the culture that maintains foreigners are to blame for all our woes and are conspiring against us day and night. This has been the dominant culture for the last 50 years and the reason for the total destruction of the country.
It is the culture that destroyed the state in 1963, just three years after its establishment, perpetuated partition and kept the Turkish army in Cyprus. The same culture which maintains that we were not to blame for living the good life for 30 years with borrowed money until we went bankrupt, but the troika that came to save us with €10bn of the European taxpayer’s money.
This is the politics/culture of lunacy. As Pikis claimed, because there was an invasion in 1974, the taxpayers of other countries were obliged to pay the bill for our bankruptcy, 40 years later, because by giving us only 10 billion they strangled us. By the same logic, if France went bust, Paris would have demanded that we paid the bill because 70 years ago it had been invaded by Germany.
This is the unbelievable reasoning of the man asked to find those responsible for our bankruptcy. And he has found them. They are President Anatasiades and Sarris who forgot to tell Wolgang Schaeuble that we went bankrupt in 2013 because in 1974 there was an invasion and Turkish settlers were brought here, which meant that Germany should have paid the bill.
Pikis’ work has been completed. He can now end the investigation.

Send to Kindle

By Poly Pantelides

ARCHBISHOP Chrysostomos II said on Saturday that potential investors from Russia had expressed their desire to visit the island with a view to investing in tourism and energy, “and many other sectors”.
The Primate recently visited Russia and met its President, Vladimir Putin, in the context of a visit by the representatives of the Christian Orthodox religion celebrating the 1025th anniversary of the Baptism of Rus. He has already promised an array of plans to help the island’s struggling economy, from building a private English school, to selling church land in Paphos to a consortium of Russian businessmen to build a hotel at a €70 million cost.

Speaking at Kykkos Monastery at an event to mark 100 years since the birth of Cyprus’ first President, Archbishop Makarios III and 36 years since his death, the Primate said foreign investors continued to trust Cyprus. “But we must be more flexible, more methodical, and more prepared,” he said.

He said that his Russian connections would come to visit after August 15 and suggested a close collaboration with the state, “because we need to work well together for investments to take place”. But he warned that in addition to the good will of the Church and investors, “state servants can play a positive role”. “If they don’t take things seriously, everything could be delayed,” he added. The Russian businessmen are interested in tourism, energy “and many sectors”, he said.
“I told them we are open to anything. Photovoltaics, oil and [natural] gas energy, and hotels,” he said.

He  even put it out there that Cyprus – because of its climate – can welcome the elderly northerners that spend years in snow and rain and would like to come to Cyprus and spend here their earnings from the honest toil of a lifetime.”
Meanwhile, President Nicos Anastasiades and state officials all paid tribute to Archbishop Makarios and unveiled his imposing statue that is now placed by his burial grounds at Throni, near Kykkkos.
“We have to learn from our history, from the wisdom and glory and the leader but also from our mistakes” Anastasiades said.

Send to Kindle

By Bejay Browne

PAPHOS Zoo is celebrating the birth of a number of animals and birds and is anticipating the arrival of their first penguins, but they say they are concerned about the falling numbers of Cypriot visitors this year.
Zoo owner Christos Christoforou says that numbers of local visitors have dropped by more than fifty per cent due to the financial crisis.
“We are waiting to see how many visitors will come to the park in August, but locals visiting have dropped by more than half since last year. Even though the prices are very reasonable, they don’t seem to have the money to spend,” Christoforou said, adding they first noticed the drop over Easter.
But he added that the zoo is playing a guessing game, as they believe that more locals will holiday at home this year and that may boost numbers. Locals also enjoy a special entrance fee compared with tourists.
He said overall numbers of visitors to the park are on a par with last year as more tourists are visiting the zoo.
“We have managed to cover the deficit in local numbers with greater numbers of overseas visitors. We have increased our advertising with tour operators, travel agencies and hotels,” he said.
Christoforou said that the park is about to accept their first penguins, once all of the relevant paperwork is completed. The new penguin house, which is about 180 m2 will provide a roomy home for the four new African penguins, which will soon be on their way to Cyprus from Europe, he said.
“These are African penguins, so they are used to the heat. These are not the type which is found at the South Pole. We expect to have them within a month.”
Meanwhile, zoo numbers are increasing with a number of the birds and animals having given birth recently, including Patagonian Mara (a large rodent), flamingos and deer.
“We are delighted to announce the arrival of two babies to a pair of Patagonian Mara. They only arrived at the zoo last summer and they have settled in very well.”
The animal lover added that the first baby Caribbean Flamingo (Phoenicopterus ruber) was also born at the zoo just a few weeks ago.
“This was great news, as it the first time we have been successful in breeding any of the two different species of flamingo that we have kept at the zoo since we opened.”
Christoforou added that as the pair of lions is also now ‘showing love’, he believes the first lion cubs will be born at Paphos zoo next year.
“We are also hoping that the tigers will produce young next year and the giraffes in 2015,” he said.
The zoo was initially started as a private concern by Christoforou who has a passion for birds and wildlife; to house his enormous private collection of birds. But he says that he later decided to open the park to the public.
The zoo took three years to complete and opened to the public in September 2003.
It covers an area of 1000 m2 and is now home to lions, tiger, giraffes, and a number of successful breeding programmes are in place.
During August the zoo will be open an extra hour from 9am-7pm, normal opening times- 9-6pm –will resume in October.

www.pafoszoo.com

Send to Kindle