YESTERDAY’S signing of the memorandum of understanding on energy and water resources by Cyprus, Greece and Israel was hailed as ‘historic’ and in a sense it was. There has never before been such an agreement by the three countries and many view it as the start for greater co-operation and stronger relations.

Israel’s minister for energy and water resources, Silvan Shalom spoke this prospect on Wednesday. He said: “The fact that we are here shows that we do not only work well on (issues concerning) water, but it’s also about geopolitics, strategy and political issues among the three countries.”

President Anastasiades appeared on the same wavelength. In a speech at the opening of a fifth desalination plant, which Israeli companies had helped build, he said the common energy interests could become “the driving force for an enhanced partnership between our two countries.” He also invited Israel to commit to exporting its natural gas from Cyprus’ LNG facility, which is still at a very early planning stage.

While the good intentions exist, so far, most plans of co-operation exist in the realm of theory, nothing tangible having been decided, let alone agreed. The memorandum provides a framework for exploring the feasibility of joint projects – one envisages linking the three countries through an underwater electricity cable, a second would involve an underwater gas pipeline linking the Eastern Mediterranean to Europe via Greece and the third relates to LNG storage facilities in Cyprus. But these projects might not even be viable – feasibility studies would have to be undertaken.

There is no shortage of ideas for co-operation. During Shalom’s visit there were also reports that the Israeli Electricity Company had proposed to supply Cyprus with cheaper electricity through an underwater cable. And when Cyprus started to produce cheap electricity, the flow could be reversed with Israel buying power from the island. Such an arrangement would make the agreement for the temporary supply of natural gas, that the government is currently negotiating, unnecessary.

While plenty of proposals are floating about, it was only a memorandum of understanding that was signed yesterday. There is a very long way to go before any of the plans take shape and are implemented. When this happens, we can talk about historic agreements, geopolitics and strategy, but at present such talk seems premature. What can be said was that yesterday’s signing of the memorandum was an important first step – a declaration of intent – but the words need to be followed by actions if the ‘historic agreement’ billing is to be justified.

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By Stefanos Evripidou

THE ENERGY ministers of Cyprus, Greece and Israel yesterday signed in Nicosia a first-ever Memorandum of Understanding (MoU) between the three countries on cooperation in the fields of energy and water.

Cypriot energy and trade minister Giorgos Lakkotrypis described the signing of the MoU as “a monumental moment for cooperation between the three countries”.

The memorandum provides a framework of cooperation which will determine the number of activities that the countries have agreed to jointly pursue, such as the security of energy supply, sustainable development and cooperation among the countries of the region.

In a joint communiqué, the three ministers said: “In this respect, the ministers of Cyprus, Greece and Israel welcome the privately initiated EuroAsia Interconnector project which aims at creating an electricity interconnection between Israel, Cyprus and Greece.”

Lakkotrypis and his Greek and Israeli counterparts Yiannis Maniatis and Silvan Shalom yesterday highlighted that the EuroAsia Interconnector “could potentially allow for the export of electricity generated in the Eastern Mediterranean to the EU energy market through the trans-European electricity networks.”

The project foresees the laying of an underwater high tension electricity cable- able to transfer energy with a total capacity of 2,000 MW- connecting Israel to Cyprus, Cyprus to the Greek island of Crete and from there to the Greek mainland, in the Peloponnese.

The three ministers reiterated their commitment to facilitate the project and see it through to implementation.

“Through this project we aim to lift Cyprus’ energy isolation, something which will help the country become more competitive by introducing cheaper electricity,” said Lakkotrypis.

The EuroAsia Interconnector is one of three proposed collaborations between the three countries which have received the preliminary approval of the European Commission as “projects of common interest”.

According to Lakkotrypis, the second proposed project is to study the feasibility of a pipeline from the East Med to Europe via Greece. And the third is the ‘Med storage project’ where Cyprus will provide tanks at Vassilikos for the storage of liquefied natural gas (LNG), securing the strategic reserves of Cyprus, Israel and other EU countries.

The presence of various LNG regasification terminals around Europe, like in Greece and Croatia, make the storage of other countries’ strategic gas reserves in a liquefied form more feasible, said a source at the signing ceremony yesterday.

In the event of an emergency, the stored LNG can be transported via ship to one of the re-gasification terminals in Europe and on to the end user.
However, all three proposals mentioned are still at the “concept” stage, meaning a host of feasibility studies are required before they can be considered solid proposals.

Although the memorandum is more a statement of intent, than a roadmap of specific actions, it came about after two and a half years of discussion, said the ministers.
Speaking on the proposed initiatives, Maniatis said they will “contribute decisively to the improvement of energy security for Europe”.

He attached particular importance to the fact that they will be included in the EU’s list of projects of common interest, meaning priority will be given to the relevant feasibility studies; there could be a 40 per cent reduction in the time needed to complete the projects; and better financing opportunities will be available from international banks.

For his part, the Israeli minister hailed the “historic moment” in relations between the three countries.

“We feel that we are moving forward to strengthen our trilateral relations and to give a very positive signal to everyone that we have an alliance that will become stronger and stronger in order to implement more projects in the future,” said Shalom.

He said all three countries were “very unique” in the region.

“Greece, Cyprus and Israel are a little bit different from other countries surrounding us. We have to make sure that we will have all the benefits of today’s historic moment,” said Shalom.

All three ministers pledged “to continue their close cooperation in the fields of energy, renewable energy, power production and water treatment and to encourage the development of other related industries, which promote regional cooperation among the countries of the Eastern Mediterranean region”.

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Police are investigating a case of arson after 7,000 bales of hay were destroyed by a fire in an enclosure in Deftera early Friday, causing an estimated €128,000 worth of damage.

A fire broke out shortly after midnight on Friday destroying the hay which was being stored in a sheep and goat enclosure, a police spokesman said.

He added that fire-fighters struggled to get the blaze under control. After the fire was finally extinguished, the fire department said it had been caused deiliberately.

The damage caused is estimated at around €128,000, police said.

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Three people were injured in a road accident shortly before midnight on Thursday in Kissonerga in Paphos, police said.

At around 11.45pm on Thursday a car travelling along Dorou Loizou Street in Kissonerga collided with another vehicle which failed to give way at a stop sign, according to reports.

The drivers of both vehicles were injured as well as the passenger of the first car.

They were taken to the emergency department of Paphos general hospital where they were kept in for observation.

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A Turkish Airlines pilot and his colleague were abducted in Lebanon on Friday by armed men who forced them from a bus driving from Beirut airport in the early hours of the morning.

The Turkish foreign ministry and the airline said they were in close contact with the Lebanese authorities but had no immediate information on who was behind the abductions or on the condition of the two airline staff.

Turkey, hoping to cement its role as a power in the Middle East, has supported rebels battling to overthrow Syrian President Bashar al-Assad and may have influence over fighters who captured Lebanese Shi’ites close to the Turkish border in northern Syria last year.

“We immediately contacted the Lebanese authorities at every level … and they are conducting a very comprehensive investigation,” Turkish foreign ministry spokesman Levent Gumrukcu said.

“As yet, we do not know who did it or for what purpose.”

The rest of the crew were safe in a Beirut hotel and would be returning to Turkey shortly, he said.

A Turkish diplomat said the two Turks were seized at around 3 a.m. (0000 GMT) when gunmen stopped a vehicle carrying the Turkish Airlines crew to their hotel in the Lebanese capital.

There was no immediate claim of responsibility but the families of Lebanese Shi’ites captured last year by rebels in northern Syria, close to the Turkish border, have demanded Ankara take greater steps to win their release.

A senior Lebanese political source told Reuters earlier this week that authorities had information that relatives of the Lebanese detainees were planning to take Turkish hostages.

However Lebanese media quoted a spokesman for the families as saying they had no link to Friday’s incident.

Two Turkish nationals were briefly abducted in Lebanon last year, following the capture of the Lebanese Shi’ites in Aleppo province in Syria and the separate detention of a Lebanese national in Damascus by rebels.

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US President Barack Obama said on Thursday a great opportunity existed to resolve the Cyprus problem, as he pledged to work closely with Greece to achieve progress on the issue.

Following a meeting with Greek Prime Minister Antonis Samaras in Washington DC, Obama said Greece could play an important stabilising and partnership role in the region as issues were addressed in the Balkans, the Middle East and North Africa.

“There is a great opportunity, as we speak, for the decades-long conflict and tensions that exist in Cyprus to be resolved,” the US leader said. “I think we are both encouraged by the messages coming out the Greek and Turkish Cypriot communities and we are going to be working very close together to see if we can make progress on those parts.”

Samaras said the two countries can work together in an effort to solve as many of the region’s problems as possible.

Those included the Cyprus problem, Samaras said, by exploiting the window of opportunity opened by the new proposals tabled by the Cypriot president.

Samaras was referring to Nicos Anastasiades’ proposal to see the return of the fenced-off part of Varosha to its inhabitants in return for allowing EU-supervised trade at the occupied Famagusta port.

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By Abdi Sheikh and Feisal Omar

An Ethiopian military aircraft carrying ammunition crash-landed at Mogadishu’s international airport on Friday, bursting into flames and killing four of the six crew members.

The Soviet-made Antonov 24 plane got into trouble in the air and then missed the runway, hurtling into the ground shortly after 0400 GMT and setting off the ammunition.

Ethiopian troops are supporting Somalia’s fight against al Qaeda-linked militants in the Horn of Africa country, although they are not part of an African Union (AU) peacekeeping force. There was no immediate comment from Ethiopia’s foreign ministry.

“We can hear explosions as it burns. It is burning like hell,” said one security source at the airport. After the fire was put out, only a blackened shell of the plane remained.

The AU peacekeeping force, known as AMISOM, said in a statement four crew members were killed and two were in hospital.

It was unclear what ammunition the plane was carrying and where it was headed. A convoy of empty Somali military trucks had earlier been seen at the airport.

In March, the U.N. Security Council partially lifted a decades-old arms embargo for one year to help the government buy light weapons to strengthen its military to fight the Islamist rebel group, al Shabaab.

AMISOM said the airport, home to a growing number of passenger flights since African troops and Somali government forces flushed al Shabaab rebels from their bases in the capital two years ago, would resume operations shortly.

It gave no details on what caused the plane to crash.

Military aircraft regularly land at the city’s airport, which also serves as the headquarters for the AU peacekeepers.

Ethiopia sent forces inside Somalia in 2011 to open up a new front in the military campaign to crush the al Shabaab insurgents and end their six-year fight to impose a strict interpretation of Islamic sharia law on the country.

The Addis Ababa government is, though, frustrated by the slow pace at which the 17,700-strong AU force and Somali troops have backfilled areas liberated from al Shabaab. Earlier this year Ethiopia threatened to pull its soldiers out.

Somalia’s aviation record is among the worst on a continent which has a history of plane disasters. Until recently, the carcass of another Russian-made cargo plane lay tilted on its belly near the passenger terminal of Mogadishu’s airport.

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Paphos Bishop Georgios has urged people to help guard churches in the district following a spate of burglaries and the theft of thousands of euros worth of artefacts.

“People are exasperated; this is a provocation against everything they hold sacred,” Georgios told the Cyprus Mail.

In the past week, five churches have been hit by what the police believe to be a gang targeting churches.

The thieves have stolen various religious artefacts including icons and cash worth over €9,500.

Bishop Georgios said that no matter what the police did, it could not protect all 120 churches within the district.
Churches have become an easy target for quick money, he said.

The response the Church got from the public was a positive one and the Bishop said people were happy to help catch the thieves.

Paphos Police said the Church and police have very close relations and that the force has taken its own measures, which included stepping up patrols.

They added that the church has complete trust in the police force that has also advised the church in different ways of protecting its property.

“We support the Church’s plea for help and we urge people to contact us whenever they feel the need to, but the safety of the public and of each and every individual is the most important thing to us,” said Lefki Solomondos, a police spokeswoman

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NATIONAL CARRIER Cyprus Airways (CY) on Friday announced that it had proceeded with the sale of prime Nicosia real estate, injecting over €3m into its parched coffers.

According to the announcement, the ailing airline sold two properties on Gladstone Street and Byron Avenue in Nicosia for a total sum of €3.1 million on August 6. The two properties were bought by a private individual.

Proceeds from the sale will likely go towards funding the national carrier’s early retirement scheme which aims to shave off almost half the staff as part of yet another restructuring plan to get the airline out of the red.

The European Commission is expected to decide after the summer on the viability of the submitted restructuring plan and also on whether the government has violated state aid rules by providing millions of euros to keep the airline afloat.

More recently, the government decided to help CY meet its short-term cash needs by disbursing a year early the €5 million-odd annual compensation paid to the company as a result of the Turkish airspace ban on CY.

The airspace ban compensation has the approval of the European Commission, but it remains to be seen whether the rest of the money channelled to the airline over the years by the government will pass the strict state aid rules of Brussels.

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By Poly Pantelides

THE MAN who sold land on location in what would later become a pension fund investment for the Cyprus Telecommunications Authority (CyTA) did not pursue more attractive deals because he was fearful of the buyer’s connections, an inquiry was told yesterday.

Accountant Panicos Senekkis was testifying to a panel looking into allegations the deal was greased to the tunes of millions.

Turkish Cypriot Mustafa Mustafa sold the Dromolaxia property, close to Larnaca airport in 2007 to Greek Cypriot company Wadnic Trading Ltd. Mustafa sold the land for less than €1.3 million although the land registry placed the value at more than double – over €2.9 million – when calculating transfer fees. Wadnic allegedly changed the terms of use, upgraded the coefficients and built on the land, selling the investment on to the CyTA pension fund in 2011 for over €19 million.

Senekkis was given power of attorney by Mustafa whom he knew via businessman Charalambos Liotatis whose books he kept. Asked why Mustafa did not pursue other deals that could have fetched more attractive prices, Senekkis said Mustafa believed he would not get approval to send the plot to anyone else but Wadnic’s Nicos Lillis, also the chairman of Larnaca football club Alki.

Liotatis and Senekkis financially supported Mustafa between 2007 and 2011 and even lent him money, the panel heard.

Mustafa would come and go from the occupied areas to the government-controlled areas, and came to be very close to Senekkis.

Senekkis had been asked to prepare contracts for tenant agreements to make it seem as if Mustafa and his son lived in the government-controlled areas. By law, Mustafa needed to have been a resident of the government-controlled areas for a minimum of six months prior to the transaction. At some point, Lillis allegedly told Senekkis to immediately pick up Mustafa to bring him over to the government-controlled areas “because the police were coming for a check,” he told the panel. Cyprus’ secret service, KYP, has produced contradictory reports on the matter.

In November 2011, following a CyTA payment tranche of €9.2 million, Senekkis said he expected to be able to cash in a post-dated cheque on Mustafa’s name for €320,000. Lillis told him there was no money left, and he would have to wait, Senekkis said.

Soon afterwards, Mustafa’s son told him they were fearful of Lillis’ connections and a few days later Mustafa annulled his power of attorney, believing he would be unable to recover the sum for them, Senekkis said. Last he heard of him was two months ago when Mustafa called from the north asking him to settle a mobile phone bill in the government-controlled areas, Senekkis said.

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By Maria Gregoriou

THE NICOSIA district court has rejected Strovolos Municipality’s application to demolish a wheelchair ramp outside a pharmacy, which was built without permission.

Judge Sophia Kleopa Hadjikyriacou who took the decision said the ramp was not a dangerous construction. “I conclude that it would be completely unfair and disproportionate relative to the gravity of the offence, to consent to the request to demolish the ramp in question,” she said.

Hadjikyriacou said it was not a case of an arbitrary and dangerous construction. “Indeed it could be one of the few cases where only by refusing to issue an order of demolition would the true spirit of the law be served,” she said in her ruling.

The head of the Paraplegics Association, Dimitris Lambrianidis who testified in court told the Cyprus Mail the association was very happy with the court’s decision.

“Judge Kyprianou should be congratulated for not following the cold letter of the law but doing what she thought was right to serve the people,” Lambrianidis said.

Referring to the municipality’s complaint that the slope of the ramp was too high and therefore dangerous, Lambrianidis said there was a ramp on the municipality’s ground floor with the same gradient.

“The height of their slope should be fixed before they take other people to court,” Lambrianidis said.

Kyprianou decided to build the ramp in 2008 when she was refurbishing the pharmacy. She called the municipality and said the building owner, Georgia Christoforou, had signed an agreement for the ramp to be built and if anything else was needed.

“I was not told that I needed a permit so I went ahead. Municipalities should have telephone recording systems because this would have proven this fact,” Kyprianou said.

According to Strovolos Mayor, Lazaros Savvides, Christoforou did take the signed permission to the municipality but later withdrew it. The case was ongoing before Savvides became mayor.

“Christoforou did give her approval and gave in a request for the ramp to be built but then removed it. After the ramp had been built she continuously complained both by telephone and in writing, that the ramp had been built without a permit,” Savvides said.

Because of the owner’s persistence, the municipality had to take Kyprianou to court, he said.

“We had to follow legislation stating that before anything was built, the property owner had to have a permit. If complaints were not constantly received, we would not have pushed for the ramp to be destroyed,” Savvides said.

Savvides said the municipality would not appeal the court’s decision.

According to Kyprianou, Christoforou had wanted to increase the rent by almost 50 per cent but Kyprianou did not agree and took her to court in 2011.

“I have been renting the building since 1996 and everything was fine until the landlady wanted to increase my rent,” she said. “I refused and she started harassing me so I went to court and won the case. I paid for the normal rate for rent increase,” Kyprianou said.

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By Stefanos Evripidou

THE GOVERNMENT has decided to reduce the fixed salary of domestic workers by five per cent, a move described by migrant support group KISA as a “tragic” decision against the lowest paid workers in the Cypriot economy.

According to an announcement released yesterday by the Interior Ministry’s Migration Department, as from July 1, 2013, the gross salary of domestic workers is decreased by 5.0 per cent, going from €484 to €460.

However, domestic workers get a significantly lower figure to take home, following deductions for social insurance payments and food and board for domestic workers who reside with their employer.

In real terms, the net salary of domestic workers has gone down from €326 to €314, after a decision taken by the ministerial committee for the employment of third country nationals on June 11 this year.

The migration department announcement did not specify the reasons behind the decision to reduce the already low salaries of domestic workers.

The ministerial committee also decided to terminate the annual automatic wage indexation for domestic workers, known as the cost of living allowance which has been all but frozen for the public and private sector since the onset of the economic crisis in Cyprus.

KISA representative Doros Polycarpou yesterday described the decision as “tragic”, noting that domestic workers receive the lowest salaries in the Cyprus Republic.

“If the government feels that this category of workers can take a further reduction in salaries, this is very sad,” he said.
Polycarpou noted that the recent decision effectively cancels out the 5.0 per cent increase in domestic workers’ salaries announced in 2011 by then labour minister Sotiroulla Charalambous.

“This means that the salaries have basically stayed the same since 1991 when the figure was first calculated. The only increases since then, apart from the 2011 decision, were related to the cost of the employer to provide food and board, not on net salaries,” he added.

The KISA head questioned the motive behind the move, asking: “Do we think that the Cypriot employer’s financial situation will improve with €12 a month?”

He charged the government with trying to make a symbolic gesture to the populace at the expense of the foreign workers, for whom the reduced amount is a considerable sum.

“It’s unbelievable, and the irony is the state is the biggest employer of domestic workers anyway, since the majority of the elderly and disabled receive benefits from the state to hire domestic workers to look after them,” he said.

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By George Psyllides

NON-PERFORMING loans (NPLs) in some small co-operative banks are so high that in one case they have reached 88 per cent, Central Bank (CBC) data showed yesterday as parliament discussed the procedure of consolidating the sector, which taxpayers will have to bail out to the tune of €1.5 billion.

A confidential CBC document circulated in the House Commerce Committee showed that NPLs in quite a few smaller units, which will now be absorbed by bigger entities, were extremely high.

The Polemi co-op in Paphos for instance reported 88 per cent NPLs. The unit’s total lending was €24 million.

The Trachoni co-op in Limassol reported 82 per cent NPLs on a total of €50 million, Pomos, Paphos, showed 81 per cent of €70 million were non-performing, and the Krasohoria unit in Limassol said 77 per cent of €60 million were NPLs.

The head of the Central Co-operative Bank (CCB) Erotocritos Chlorakiotis admitted that small co-ops must go.
“It was prudent and wise when local societies created these tiny co-operative companies; in my view it was imprudent, anachronistic, and unwise for these tiny companies to continue to exist in today’s conditions,” Chlorakiotis said.

The island’s 93 co-operative companies will be merged to form 18 entities in line with Cyprus’ bailout terms.
Supervision will move to the CBC.

Ten will be based in the Nicosia district, three each in Limassol and Larnaca, and one each in Paphos and Famagusta.

They will receive €1.5 billion in taxpayer money to recapitalise.

Chlorakiotis said this was the way for the sector to move to the future “with upgraded services, structure and wiser decisions.”

To be eligible for the bailout, the government must prepare and put through parliament a total of 14 pieces of legislation before September 13.

Finance Minister Harris Georgiades said the government aimed to approve the bills “perhaps on August 28” and send them to parliament the same day.

He warned MPs that the bills had to be approved for Cyprus to receive the next bailout tranche.

Otherwise, the co-operative sector could also face resolution, Georgiades said.

To receive a much-needed €10 billion bailout, Cyprus had to agree to wind down Laiki Bank, its second-biggest, and recapitalise Bank of Cyprus using its depositors’ cash – a process known as bail-in.

Bailing out the co-ops will make the state their exclusive owner with 99 per cent of its shares.

“It is not a loan, no interest is paid and there is no guaranteed return,” the minister said.

The state will receive a dividend on profits and be burdened with losses, Georgiades said.

Many fear that co-ops will eventually fall in private hands.

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By Timothy Spyrou

THE NEWS, if confirmed, that the government intends “to appoint a fully political board” which will consist of non-executives, while the current executive directors of the Cyprus National Hydrocarbons Company (CNHC) will be demoted to department heads, is a huge blow to the future of our economy, and our hopes for a lean, accountable and transparent state. It is an open tender for more corruption and patronage. It will be seen as a provocation by the Turkish-Cypriots, leading to a choice of messy outcomes.

Lastly, it is not just a blow, but a revelation. It is a revelation of why our international lenders aren’t really impressed by our claims of an economic revival centered on exploiting our natural gas reserves.

The first argument against turning the two natural gas related companies into a fiefdom of the political parties, particularly DIKO, is that it will undermine personnel recruitment. It was perfectly acceptable that we would have a state controlled hydrocarbons company that would search for partners and investors, as long as it was run by technocrats on the Norwegian model.

It is not acceptable to demote the current and future technocrats to mere managerial positions, dismissing their technological and market knowledge and experience as if it is a commodity that is universally available. Also, to say that the political board appointees would not be exercising any executive control is a falsehood.

Things will turn murky sooner or later. The political appointees will seek to place their family members, friends, friends of friends et cetera, into positions throughout the two natural gas related companies, ensuring that we won’t have the best qualified people running the operations at all levels. In fact, we could end up discouraging those who have the best engineering, scientific and business qualifications from even applying for a job in the first place, as they will probably balk at being told what to do by a self-important bureaucrat who is somebody’s relative.

If you had studied an engineering course at Imperial College London and worked as an intern at Royal Dutch Shell, would you like to be bossed around by someone who has far less knowledge and experience than yourself?

Would you tolerate it if your less productive colleague gets promoted? Furthermore, not only may we be giving up on professionalism in management, but this will also encourage a slap-dash culture amongst the skilled workers who, although they are not technocrats, still perform valuable work such as maintenance of equipment and operating systems.

The second argument against politicising the board of the CNHC is that it will be the equivalent of giving the pigs multiple troughs of pig slop every two hours. It will be a recipe for kickbacks as is the case for many countries that were unfortunate enough to have large oil and gas reserves paired with self-serving political elites.

I believe that people do not adequately understand the damage that kickbacks inflict during a tender/bidding process for highly important contracts. Here is a hypothetical example. The national hydrocarbons company will be putting out an auction for the exploration rights to a prospective natural gas field. There will be a variety of bidders.

The best bidder will be offering not just the best price to the government, but they will also be offering the best infrastructure plans and they will also be offering the best completion date estimate.

They will also have the best safety and environmental records. However, all it will take to torpedo this deal is a couple of politically appointed board members who have close ties to the government of the day and a company willing to offer a range of incentives, from jobs for the boys to guaranteeing sweetheart loans.

That company may not have a good safety and environmental record, may not have the best equipment, may not have the best completion estimate and may even seek to bargain down the royalties that it will pay.

It may also be a company that is engaged in complex legal problems elsewhere, which would lead to Cyprus being enmeshed in controversies that might make the money laundering accusations, real or alleged, look insignificant by comparison. The sheer choice of catastrophic outcomes is bewildering.

The potential for economically and legally disadvantageous scenarios do not end there. If an oil and gas exploration company is ethically dubious enough to engage in such malpractices, what about all of the partners, contractors and subcontractors that it will bring along?

Most oil and gas firms today, regardless of whether they are Western giants like Exxon Mobil, small and medium sized enterprises, nationally owned corporations like Petrobras, outsource different operations to specialized oil/gas service providers.

This is a recipe for even more kickbacks, even more slovenly work, even more lost growth and lost revenues.
It could also be a recipe for an environmental disaster that would not only cost billions to clean up, but would simultaneously wreck what is left of our natural beauty; wound our shipping industry; kill our tourism industry; increase our carbon emissions; incur the wrath of the European Commission and heavy fines we can’t afford; invite the condemnation of the international environmentalist community and enrage the neighbours, who, aside from being disinclined to work with us in developing the European Union/East Mediterranean natural gas market, will be demanding payment for their share of the cleanup effort. Cyprus could be directing the remake of the BP Gulf of Mexico Spill.

I would hate to be in President Anastasiades’ shoes as he begs the EU for funds to save the Akamas whilst simultaneously apologising to Prime Minister Samaras because the oil slick reached Crete and Rhodes. In fact, if we get a disaster of an appropriate size, it would strangle our natural gas hopes in their cradle and possibly do damage to the wider industry, earning us even more trouble.

The third argument against politicising the board is that it will turn the CNHC into a battleground for different partisan and ideological agendas.

Each political party will be trying to achieve its own objectives within the corporation, and won’t be focused on what is actually good for the bottom line. There will be limited consensus as eventually each party will get a slice of the pie.

There will be limited stability in corporate decision making, with actions by the professionals being undermined constantly.

A change of government will see all current employees, professional or political, marginalised by a new influx of political personnel, resulting in the CNHC becoming yet another bloated state owned company.

Some parties will be tempted to expand the firm’s role beyond that of a state energy company searching for partners and investment. AKEL may aspire to emulate Venezuela’s PDVSA, which the late Chavez turned into a vehicle for interfering in a multitude of industries and a social welfare organization.

Today, its productive capability is in decline because, rather than employ technocrats knowledgeable about petroleum engineering-or poverty reduction for that matter-and investing in new drilling technologies and untapped fields, it instead employs a bunch of people whose only qualifications are loyalty to Chavez’s memory and a love for throwing money around.

Another reason why the appointment of a politicized board is a resoundingly bad idea is that it will destroy any hopes of gaining a good reputation in the global oil and gas industry and damage our investment prospects.

The article in the Sunday Mail illustrates this perfectly. The government probably spent over a million euros hiring a team of consultants linked with Norway’s Statoil so that it can be provided with advice on how the CNHC and DEFA should be structured.

We, the Cypriot taxpayer, were paying for advice so that our state natural gas and petroleum enterprises could emulate the best practices of an energy company that has operations in 36 countries, 23000 employees, a market capitalization of 50 billion euros and is ranked by Forbes Magazine as the eleventh largest oil and gas company in the world and 26th largest company overall by profitability. It is also an example of how an economy could judiciously manage its natural resource endowments without incurring costs such as overheating, bubbles and oil price volatility.

Yet, contrary to all logic, the Commerce and Energy Ministry rejected the impeccable advice provided by the Norwegians and decided to proceed in the exact opposite direction by giving political appointees the seats on the board of directors.

As a result, we have damaged our natural gas industry’s credibility with what could be a key partner and mentor before we even got the company off the ground. Furthermore, in the globalization age, information as to whether a corporation is following good or slovenly business practices travels fast amongst peers.

Every player that may want to do business with us already has us figured out from this piece of information. As I said before, it is gullible to believe that the politically appointed board of directors will not be operating as executives. They will eventually turn out to be non-executives in name only.

Already, the trend towards this inevitable outcome is taking shape, with the Energy Secretary not only arbitrarily deciding who will be included and excluded in future negotiations with Noble Energy, but who would conclude negotiations already in progress and who would sign the actual deals.

It is a policy designed to undermine the executives’ authority in their running of the corporation. It is also a signal to would be foreign investors that deference should be paid to the politicians and the bureaucrats as they are the ones with the cards to deal.

There is a reason why the oil and gas industry, at least in the West, is known as “Big Oil”. Besides their market capitalization, they possess some of best public relations personnel and lawyers that money can buy and have unprecedented political power.

Even the smaller enterprises, like Noble Energy [at $22.93 billion, it is bigger than our rapidly shrinking economy] wield some of that power. Some of them have been involved in human rights and environmental abuses and gotten away with it. A few oil and gas industry players have left American presidents politically bloodied.

Cyprus needs specialists that possess the ability to decide whether a prospective investor is trustworthy or not and whether the deal on the table has benefits that far outweigh the costs. If we take a casual attitude to negotiating with the global oil and gas industry by having political appointees as our representatives, then, they will walk all over us.

The last argument against the politicising of the CNHC board is that it will complicate the Cyprus Problem.

The Turkish Cypriots, rightly or wrongly, fear that we plan to prevent them from benefiting from their share of the natural gas wealth, regardless of whether we have a managed partition or a reunified bizonal, bicommunal federation.

The appointment of political appointees will appear like a coordinated plan to turn the natural gas industry and its benefits into the property of the Greek-Cypriot political elites and their clique. There is a choice of bad endings regarding this possibility.

One is that Ankara might engage us in a manufactured crisis that would scare away investors and halt all infrastructure development plans, regardless of the international condemnation.

The alternative bad ending could be that, in the event of reunification, the Turkish Cypriot political elite will demand full participation in the turning of the CNHC into a dysfunctional, rent seeking, vested interest run organization.

Given that Serdar Denktash’s party emerged as the real winner in the ‘elections’ on an anti-economic reform platform similar to that adopted by Greek-Cypriot politicians, this is a certainty.

This the reason why our international lenders dismissed our pleas to trust us, on the basis that our economy could be dramatically revived by natural gas led investment, and that we could pay the full €17 billion that we initially asked for.

They know that the governing class lacks the mentality to manage our newfound wealth without further entrenching the vested interests that support our dysfunctional and unaccountable bureaucracy. This is why we should have welcomed the Troika’s suggestions that they have oversight over our energy development plans. They do not trust us, regardless of the ideological orientation of our government. And they are quite possibly right.

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THE OPPORTUNISM and hypocrisy of AKEL’s cheap demagoguery knows no bounds. Every day their spokesmen take the moral high ground, making scathing statements against some government decision or other, without offering anything a rational argument to back their reactionary views. Communists have always peddled dogmatism, in the unshakeable belief that they have the monopoly on truth.

In the last week, we have heard AKEL spokesmen attack the government’s plans to seek expert advice on the privatisation of SGOs because privatisation, according to communist dogma, is a bad thing, and criticise the decision to bring co-op banks under state-ownership, because the members would lose their ownership rights. In short, they are both in favour and against state ownership – in favour with regard to SGOs, but against with regard to the co-ops.

There is an explanation for the double standards. AKEL has control of the co-ops under the current ownership regime, a control it would lose when the state takes over. And the party conveniently ignores the fact that these wonderful co-ops would need €1.5 billion – the taxpayer had to borrow from the troika – for their re-capitalisation needs.

The members, as owners, were liable but escaped without paying a cent and there was no bail-in of depositors so AKEL should praise the government for saving the mismanaged co-ops, instead of engaging in demagoguery, claiming the movement would lose its identity and autonomy under the bailout deal agreed with the troika.

The cheap populism of the communists should surprise nobody. The previous week, the AKEL spokesman for the economy, Stavros Evagorou declared that his party “would back every step and effort for the exit of the Bank of Cyprus from the resolution regime for the good of the country and the economy.”

It is beyond belief that the party which had spent all last year disparaging the banks and destroying confidence in the banking sector is now concerned about saving the Bank of Cyprus. It was the AKEL government that allowed an insolvent Laiki to build up a €9.5bn ELA debt that was transferred to the BoC, so that it would not be debited with the political cost of bankruptcy.

The hypocrisy, opportunism and populism of the communist party are staggering. It pushed a struggling country over the cliff, with its incompetence and cowardice and now it wants us to believe it has all the remedies for the economic disaster zone it created. The comrades even claim to want the “good of the country and the economy”, having proved, beyond any doubt, in practice, that the only thing that matters to them is AKEL. Dishonesty and double standards go hand in hand.

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By Peter Stevenson

EIGHT months after warning that the justice system was a step away from collapse, and a month from the new judicial year, the Bar Association said yesterday the situation had now become unmanageable.

Speaking at a news conference, the head of the Bar Association, Doros Ioannides said
understaffing at the courts was causing untold problems, and the situation was just getting worse by the day.

On top of the problems that already existed, there were now thousand of cases of bank depositors heading for the courts to fight the haircut agreed with Cyprus’ international lenders.

“The number of vacancies has increased significantly, the courts are overwhelmed by cases due to the implementation of the Memorandum of Understanding and the problems are piling up in front of us,” Ioannides said.

Last November the association called on all of its members to carry out a one-day strike to raise awareness of the problems faced by the justice system and the courts.

“We had warned that the courts would not be able to cope and that cases would be delayed. We had warned that we were a step away from the collapse of the justice system. Unfortunately the facts have proven us correct,” Ioannides said yesterday. The vacant positions left by judges who have retired are not being filled and office staff are not being replaced, he added.

Ioannides said that despite people wanting swift justice to solve their problems, the system did not have the means to cope with demand following the mistaken impression that by putting a freeze on employing new personnel, the state would save money.

“The opposite is true though, as we will have to pay a hundredfold in compensation for delays to cases compared to what would be gained by not hiring staff,” he said.

The taxpayer will be called to cover those costs, despite not being responsible in any way, Ioannides added.

“Unfortunately we have not learnt our lessons following the amount of money the state has had to pay in compensation after delays in the course of justice,” he said.

Ioannides added that the Bar Association would send a detailed report to the President, House President, Justice Minister and party leaders about which cases were still pending, both criminal and civil. The report will inform them of the daily problems faced by the courts which are preventing their smooth running.

Ioannides said the problems were long-running and that the current government was not the only one to blame.

“Justice is the foundation of democracy and we cannot allow it to crumble,” he said.

Ioannides added that filling the vacant spots would not solve all of the courts’ problems and that all courts needed to be staffed correctly.

He said that it was necessary to create an Administrative Court which would have an online record of all cases, as the benefits would far outweigh the costs.

The relationship between the state and the courts has come under strain recently.

Supreme Court head Demetris Hadjihambis sent a letter to the House in July after ten judges positions remained vacant under orders of the House Finance Committee.

He warned that the positions would be filled whether deputies decided to unfreeze them or not.

In the letter, which was widely publicised, Hadjihambis said that not filling the positions was equal to not filling ministerial or parliamentary positions. He added that it would adversely affect the smooth running of the judicial system as an impartial authority. The Supreme Court head said he felt that parliament’s actions were putting more stress on the relationship between judges and deputies following parliament’s unsuccessful attempts recently to reduce judges’ wages.

“I would not feel so strongly about this matter if the legal services had not reached its limits due to the reduced manpower. If the new judicial year begins without those positions being filled the burden and consequences will be huge,” he said in his letter.

In June the Supreme Court ruled in favour of district court judges who had appealed against the pay cuts imposed as part of the effort to save the economy, arguing that their remuneration was protected by the Constitution.

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By Steve Holland and Jeff Mason

President Barack Obama announced plans on Friday to limit sweeping U.S. government surveillance programmes that have come under criticism since leaks by a former spy agency contractor, saying the United States “can and must be more transparent”.

“Given the history of abuse by governments, it’s right to ask questions about surveillance, particularly as technology is reshaping every aspect of our lives,” Obama told a news conference at the White House.

Saying that it was important to strike the right balance between security and civil liberties, Obama vowed to improve oversight of surveillance and restore public trust in the government’s programmes.

“It’s not enough for me as president to have confidence in these programmes. The American people need to have confidence in them, as well,” Obama said, adding that he was confident the programmes were not being abused.

Obama’s announcement – made just before Obama heads for summer vacation on Martha’s Vineyard – may be greeted as a partial victory for supporters of ex-NSA contractor Edward Snowden who is now in Russia, where he was granted asylum last week.

The Obama administration has vigorously pursued Snowden to bring him back to the United States to face espionage charges for leaking details of the surveillance programmes to the media.

“I don’t think Mr. Snowden was a patriot,” Obama said at the news conference, brushing off the suggestion that Friday’s announcement showed Snowden had done the right thing in revealing the extent of the government’s programme.

The president said he had ordered a review of the surveillance programmes before Snowden provided secret documents to The Guardian and The Washington Post, but he added that there was no doubt those leaks triggered a “much more rapid, passionate response” to the issue.

FOUR STEPS

Obama said he had decided on four specific measures.

Firstly, he said, he plans to work with Congress to pursue “appropriate reforms” of Section 215 of the anti-terrorism Patriot Act that governs the collection of so-called “metadata” such as phone records. He insisted that the government had no interest in spying on ordinary Americans.

Obama did not specifically lay out how the program will be reined in, however. Instead, he pledged greater oversight, greater transparency, and constraints.

Civil liberties advocates wanted more details.

“He said he would recommend 215 reform, but he said ‘appropriate’ reform and we don’t know what that means,” said Electronic Frontier Foundation digital rights analyst Trevor Timm. “There were no concrete changes to the actual surveillance programs.”

Outlining his second measure, Obama said he would pursue with Congress a reform of the secretive Foreign Intelligence Surveillance Court, which considers requests from law enforcement authorities to target an individual for intelligence gathering.

Obama said he wants to let a civil liberties representative weigh in on the court’s deliberations to ensure an adversarial voice is heard. The court, authorized under the Foreign Intelligence Surveillance Act of 1978, has been criticized for essentially rubber stamping the U.S. government’s requests to search through Americans’ electronic records.

Currently, the FISA court makes its decisions on government surveillance requests without hearing from anyone but U.S. Justice Department lawyers in its closed-doors proceedings.

Appointing a civil liberties advocate to argue before the surveillance court may have little value, said Carrie Cordero, director of national security studies at Georgetown University Law Center and a former Justice Department lawyer.

“I will be interested to hear how this would work in practice, but as an initial reaction, I do have concerns about additional layers of bureaucracy slowing down the speed and agility of conducting counterterrorism activities,” Cordero said in an email.

Thirdly, Obama said he wants to provide more details about the NSA programmes to try to restore any public trust damaged by the Snowden disclosures.

The fourth measure was the creation of a high-level group of outside experts to review the U.S. surveillance effort.

Gigi Sohn, head of public interest group Public Knowledge, said Obama’s plans were a good start, but added: “It’s going to depend a lot on Congress.”

The American Civil Liberties Union called the proposals “a necessary and welcome first step.”

Executive Director Anthony Romero said the ACLU favors revamping all U.S. surveillance programmes to adhere to constitutional protections.

PRIVACY VS NATIONAL SECURITY

The NSA declined to comment on Obama’s proposals. It is not clear if Congress will take up the initiatives. A number of influential lawmakers have vigorously defended the spying programs as critical tools needed to detect terrorist threats.

U.S. Senator Dianne Feinstein, head of the Senate Intelligence Committee, said in a statement that her panel will hold a series of hearings to study the surveillance programmes.

Brendan Buck, spokesman for House of Representatives Speaker John Boehner, said Republicans expect the White House to ensure that reforms do not compromise programs that protect against terrorism.

Republican Representative Peter King issued a statement stridently defending the surveillance programmes and calling Obama’s reform plan “a monumental failure in presidential wartime leadership and responsibility.”

The Patriot Act, launched by then-President George W. Bush after the Sept. 11, 2001, attacks, was initiated as a terrorism-fighting tool to prevent a similar attack from happening again.

But frequent questions have been raised about the scope of the law and whether its sweeping tactics allows unwarranted intelligence gathering on innocent Americans.

The Snowden disclosures generated concerns about whether people were being forced to sacrifice their constitutionally guaranteed civil liberties in the open-ended search for terrorism links.

The NSA has long monitored communications abroad but the documents released by Snowden indicated the email and phone data of Americans is being routinely monitored on a vast scale, with the cooperation of major U.S technology firms.

Obama met with the CEOs of technology and telecoms companies such Apple Inc and AT&T Inc on Thursday to discuss government surveillance. A Google Inc computer scientist and transparency advocates also participated.

The search for Snowden has upset U.S. relations with some Latin American countries, China and, above all, Russia. Obama this week canceled a planned summit in Moscow with President Vladimir Putin.

Obama said the United States has always had tension with Russia and it was an appropriate juncture to reassess where the two nations stand.

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By Richard Cowan

Eighteen of the 19 U.S. embassies and consulates closed this month due to worries about potential terrorist attacks will reopen on Sunday, the U.S. State Department said on Friday.

“Our embassy in Sanaa, Yemen, will remain closed because of ongoing concerns about a threat stream indicating the potential for terrorist attacks emanating from Al Qaeda in the Arabian Peninsula,” State Department spokeswoman Jen Psaki said.

The United States will also keep its consulate in Lahore, Pakistan, shuttered, Psaki said, adding it closed on Thursday due to a “separate credible threat.”

The United States shut about 20 of its embassies and consulates in the Middle East and Africa on Sunday after saying it had picked up information through surveillance and other means about unspecified terrorist threats. It later said the missions would remain closed through Aug. 10.

A worldwide alert said that al Qaeda could be planning attacks in the Middle East and North Africa.

The reopening U.S. posts are located in Jordan, Egypt, Qatar, Kuwait, Bahrain, Oman, Libya, Madagascar, Burundi, Djibouti, Sudan, Rwanda, Mauritius, as well as three in Saudi Arabia and two in the United Arab Emirates.

The U.S. government this week warned its citizens to avoid traveling to Pakistan, while some American diplomats from Yemen were evacuated and U.S. nationals were told to leave the country immediately.

President Barack Obama, during a White House news conference on Friday, declined to comment on reports of drone strikes in Pakistan that targeted militants in that country.

The State Department did not indicate when its facilities in Sanaa and Lahore might reopen, saying it will continue to evaluate the “threats.”

U.S. embassies and consulates offer emergency services to Americans traveling abroad and attempt to advance U.S. diplomatic and business interests in host countries.

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By Theodore Panayotou

The hard austerity prescribed by the Eurogroup is based on the idea that, if overspending and wasteful use of resources are the root of large public deficits and accumulated unsustainable national debt, then a drastic cut in spending (and some increase in taxes) will restore the balance between revenues and spending. Hard austerity is imposed because it is seen as a sensible way to ensure that financial aid (a loan at below-market interest-rates) will be repaid and the country will return to financial health. The collateral damage of this logical approach is a fall in demand, the closing down of businesses, the increase in unemployment and negative growth with all the accompanying negative socioeconomic consequences. All therapies unavoidably involve some temporary pain in exchange for the benefit of improved long-term health.

Was the hard austerity the optimum policy?

The question is: is hard austerity the optimum treatment to secure the greatest benefit, namely the fastest possible return to stability and growth at the minimum cost? Opinions differ. The Keynesian view is that, in recessions, we need expansionary fiscal policy (more deficit spending) to stimulate demand and economic activity, and only when strong growth returns should one implement structural changes, because with the economy growing spending cuts and more taxes are easier to take.

My view is that the optimum solution is a creative combination of the two approaches: cut spending on unproductive and wasteful uses and direct the saved resources to more productive uses, along with restructuring and the provision of additional funding (from external sources such as the Eurogroup) for high-return investments to stimulate growth.

Can the euro survive in the long run?

This is the trillion euro question. There is no doubt that the crisis in the eurozone and the hard-austerity response to it has accentuated the divisions between North and South Europe, essentially creating a two-tier, two-euro Europe. In its efforts to restore financial stability and secure the future of the euro, eurozone leaders created more uncertainty, and loss of confidence and trust by depositors and investors. The bail-in, in particular, as a way of resolving banking crises, especially as it was applied to Cyprus, has undermined the investment climate in Europe, and reduced public faith in the EU in general.

Can the euro survive as a common currency if the gap between the ‘two Europes’ continues to widen? The answer is clearly ‘no’ and this is why the eurozone (and the EU as a whole) is moving closer to the US federal system with its unified fiscal and banking systems. At any rate, the euro may survive but the eurozone will be a less attractive place for investment, and a less innovative, less competitive economic region compared to the US and the emerging economies. This will not be unrelated to the unimaginative ways the economic crises of its members were addressed.

Is the MOU a curse or a panacea?

It is neither. Those who counsel exit from the Memorandum of Understanding (MoU) Cyprus signed with the Eurogroup should propose viable alternatives with hard figures and willing sources of financing. They should also explain how this disaster would not be repeated without the structural changes that the MOU requires us to do. (These are the very changes which we had the time to do before and proved ourselves incapable of doing.) Those who claim that the MOU is the only way out of our current crisis are correct since the troika are the only ones who will lend us the money we need (we tried others and failed). They are also right that the provisions of the MOU are necessary conditions for turning the economy around, but they fail to mention that they are also insufficient by themselves.

We should take additional measures if we want to bounce back soon and return to growth and prosperity. We should first decide what Cyprus we want. What are the vision and the strategy? What is the new economic model? How do we regain our international competitiveness? We need to promote innovation and entrepreneurship. We need to find creative ways to employ the unemployed. We need to reform our educational system. We need to build a leaner and more efficient public sector. We need to take action at home to reestablish trust in our institutions and international campaigns to regain credibility in both the state and our financial and banking system.

How long would it take to bounce back to growth?

It depends what one considers a reasonable timeframe. One year is too short, five years is too long. So the question boils down to whether the economy will recover in the next couple of years and begin growing again by 2016 at rates of 2-3 per cent. The question is by no means easy to answer. No one could have predicted two years ago that in 2013 the economy would shrink by 8 per cent and another 4 per cent in 2014. On the positive side, we have signed a memorandum and a 10-billion-euro loan agreement.

Our banks are now recapitalised and reforms are under way. We also have the first assessment by the troika which is largely positive. On the negative side, the trust and credibility of both the state and the banking and financial system of Cyprus have been shaken and they are not likely to recover as long as the restrictions on capital movements are in effect. Without trust and credibility, Cyprus is not likely to attract the deposits and investments necessary to fuel economic growth.

Dr Theodore Panayotou is Professor of Economics, Ethics and Entrepreneurship and director of the Cyprus International Institute of Management (CIIM). He served as professor of Economics and the Environmental Management at HarvardUniversity for 25 years, as consultant to UN agencies and as advisor to governments in the U.S., China, Russia, Brazil, Mexico, Thailand, Costa Rica and Cyprus, among others. He has published more than 100 books, monographs and peer-review articles on economic, business, and environmental issues. He was recognised for his contribution to the Intergovernmental Committee on Climate Change won the Nobel Peace Prize in 2007.

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By Loucas Charalambous

LAST WEEK I wrote about the irrational attitude of the president of the investigative committee for the economy, Giorgos Pikis, after the crazy questions he had asked former finance minister Michalis Sarris regarding the March Eurogroup meetings at which the MoU was finalised.

Pikis had suggested, through his questions, that the Eurogroup ‘strangled’ us because President Anastasiades and his minister omitted to inform Wolfgang Schaeuble, Christine Lagarde and others that Cyprus was the victim of an invasion in 1974 and that this was the reason for our bankruptcy 40 years later.

After the ‘interrogation’ of Laiki Bank’s former executive chairman Kikis Lazarides, a week later, I think we can surmise that the president of the committee is not really interested in getting at the truth. And this makes me wonder what his objectives are.

Lazarides, because of the position he held, shoulders the main responsibility for the bank’s destruction. He was the man who, together with Tassos Papadopoulos and the then governor of the Central Bank Afxentis Afxentiou, involved Laiki in the money-laundering of Milosevic’s millions, which was the main reason for HSBC’s departure from Cyprus and the sale of its 20 per cent shareholding in Laiki to Andreas Vgenopoulos’ companies.

As is well-known, after 2002 when the Milosevic scandal became public knowledge, HSBC sought to secure a bigger shareholding or, alternatively, to elect two representatives on the bank’s board of directors so it could exercise some control. It failed on both counts, as Lazarides managed to create a front, with the other big shareholders – the Lanitis family – against HSBC.

His motives were very clear. He wanted to keep control of the bank because he did not want an investigation into the scandal in which he had played the leading role. This was also the reason he rushed, subsequently, to bring Vgenopoulos to Cyprus to buy the shares from HSBC, and in turn it was Vgenopoulos who singlehandedly later wrecked the bank.

The first question anyone would have expected Pikis to put to Lazarides was to explain his involvement in the illegal transfer of hundreds of millions of dollars from Serbia used to purchase arms for Milosevic’s army. This constituted a flagrant violation of UN Security Council resolutions and agreements signed by our government.

This is the question that even the most clueless investigator would have put to Lazarides. Yet it was the only question Pikis did not ask. You can only conclude that the committee president is not interested in the real causes of the destruction.

He had in front of him the man who was running Laiki when it was being lambasted internationally and showing up our state internationally as a protector of international illegality. Pikis confined himself to asking for the “reasons for HSBC’s withdrawal”, and was given the following answer by Lazarides:

“All international banks examine the markets in which they have operations. Initially there were thoughts of an increase but also of a decrease in their shareholding. In the end, they decided to withdraw.”

It was that simple. The bank thought of staying, thought of leaving and in the end left. No word was mentioned over the reasons for HSBC’s departure. Pikis accepted Lazarides’ inadequate response without asking the logical, follow-up question – why did you involve the bank in the dirty dealings, turning it into Milosevic’s accomplice, violating UN sanctions and agreements signed by the government?

This was the story that earned Cyprus the reputation as a money-laundering centre which was the main charge the government faced at the Eurogroup meetings. It obviously did not interest Pikis. This is how seriously he is taking the investigation he is conducting.

This gives us the right to say that Pikis is in charge of a farce, not an investigation.

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