POLICE said yesterday they have in their hands a 2011 proclamation attacking state officials, including the attorney-general, thought to have been penned by a convict suspected of being the mastermind of an alleged plot to assassinate Petros Clerides.

The convict and two other suspects – a former contract soldier and a lottery ticket seller -- were arrested last Sunday week on suspicion of plotting to assassinate Clerides using a disposable light anti-tank weapon or LAW.

The Nicosia district court yesterday renewed the suspects’ remand for another six days.

Police told the court they have located a proclamation, found in prison in 2011, allegedly written by the convict.

“It attacks state officials, including the attorney-general,” investigator Yiannis Yiorkadjis told the court.

He also told the court that they have also found correspondence dated August last year, in which the suspect asked the attorney-general to see to his release in return for surrendering a LAW, that was meant to be used against prison officials, as well as a pistol.

Authorities have said that prison governor Giorgos Tryfonides was also a target,

The bulk of the police’s intelligence came from another convict, Antonis Kitas, who is doing life for the murder and rape of two women.

The alleged mastermind, who represented himself in court, suggested Kitas was lying.

“They forget who Kitas is,” he told the court.

But police said the suspect had asked to be moved to the wing where Kitas is held, a request granted on October 15.

The court heard that the two were seen together while security camera footage showed that during the hours when the plot was unfolding on the weekend of October 27 and 28, they were in Kita’s cell.

Police also said they have two pieces of paper with the names and phone numbers of the two other suspects, given to Kitas so that he would arrange dropping off the LAW and a getaway motorcycle.

Police had found the Turkish-made LAW, at the location in Larnaca, where it was allegedly delivered by the lottery-seller, and replaced it with an unarmed identical launcher. 

After placing their own agent in the operation they let it run its course until Sunday evening.

The court heard that the convict had asked Kitas to find someone to carry the weapon to Nicosia, together with the motorcycle, and deliver them to the former soldier.

The soldier went to the rendezvous where he met the police agent but shortly afterwards he was detained.

Police said they found a mobile phone in his possession that could be used as a remote detonator or to activate the LAW.

The suspect told police he was going to use it to activate the irrigation system at his field – a claim that could not be confirmed according to investigators.

OPPOSITION DEPUTIES in the House Education Committee yesterday decided to withdraw the legal proposal freezing supplementary funds for the establishment of a Medical School by the University of Cyprus (UCY). 

Ruling AKEL welcomed the move but called it a “disorderly retreat” of the opposition groups after trying to put the whole project in the freezer. 

Speaking after a committee meeting, Education Minister Giorgos Demosthenous welcomed the decision by DISY, DIKO and EVROKO to withdraw the proposal, expressing his great satisfaction that the ministry’s plans can proceed as planned. 

The medical school is expected to welcome its first students in September 2013, he said, adding that the ministry will monitor closely developments regarding the new school’s staffing, and other issues related to its operation.  

The fund-freezing proposal was tabled two weeks ago by Committee Chairman, DISY’s Nicos Tornaritis, along with DIKO MP Athena Kyriakidou and EVROKO’s Demetris Syllouris.

Tornaritis at the time questioned how the school expected to open the necessary positions, choose and hire academics in time to welcome the school’s first 40 students next September. 

In an effort to explain the move, he argued that parliament needed to ensure that every euro spent of the Cypriot taxpayers was fully justified. 

Ruling AKEL’s response was to accuse the three parties of hypocrisy for voicing concern about meeting the target date while at the same time setting further obstacles to make sure that date is missed. 

Justifying his turnaround yesterday, Tornaritis said his party decided to withdraw the proposal to avoid being blamed for delays in the school’s establishment.

The main opposition party wants to see the school up and running but based on qualitative and academic criteria, “not some flash in the pan decision by AKEL simply so it can tell people ‘look we made a medical school’,” said the DISY MP, 

He questioned how the state would be able to come up with the budget earmarked for the school, noting that DISY also has doubts as to whether the school will begin operations next September as planned, given the way the government has handled it so far, said Tornaritis. 

“Unfortunately, given the way the government has handled things from a purely communications perspective, I’m afraid the Medical School will not operate in September 2013,” he said, accusing the present government of “inconsistency”. 

The committee chairman called on the education minister and UCY Rector Costas Christofides to examine all alternative options before them “to ensure the first 40 students and their families do not become victims of the government’s actions and omissions”.  

While welcoming the bill’s withdrawal, AKEL deputy Giorgos Loucaides described it a “disorderly retreat” by DISY and other co-sponsors of the legal proposal. 

The whole problem was created by DISY for a sum of €15,000 the university needs to invite the school’s first academic, argued Loucaides. 

“The aim of DISY and those who co-signed the proposal was to put the medical school in a plaster cast so it won’t operate in 2013,” he said. 

Christofides also welcomed the opposition MP’s decision, noting however that the university would have to move at a faster pace to accomplish the goal of welcoming the medical school’s first students next September.  

POLICE have questioned two men linked to the Nicosia bus company OSEL, in connection with forged invoices worth around €90,000, as investigations continued yesterday into claims of fraud.

The pair were arrested on Monday, around a week after police visited the company offices in search of evidence.

One of the men was released the same day, the second was freed yesterday. Neither were charged.

Police suspect a company official had been issuing fake fuel invoices worth around €90,000, which were later presented to the state for payment.

Nicosia’s public bus network was overhauled in 2010 as part of an island-wide revamp of the public system. 

OSEL was created to run the Nicosia public network with individual shareholders making up the network and charging the company to use their buses and run routes. 

The government pays companies a rate per kilometre and leases the buses.

The new public transport system has been dogged by disagreement over how much the government pays the companies.

OSEL has a ten-year contract with the state as of 2010, as do the other five companies covering Paphos, Limassol, Larnaca, Famagusta and intercity routes.

The agreement was signed during the tenure of the communication minister at the time, EDEK MP Nicos Nicolaides, while his successor, Erato Kozakou Marcoullis asked for a review of the system.

Her successor, Eftyhmios Flourentzos, took a closer look in February during an island-wide strike.

Critics and government insiders say that the agreement had been hastily signed without carefully considering the conditions.

The government never went to open tenders on the suggestion of the Road Transport Department, which said going directly to locals would prevent unrest among the 200 bus operators. 

Trouble with the EU was averted by way of concession contracts.

No studies had been done to be used as guides when drafting the conditions of the agreement.

A government source told the Cyprus Mail earlier this year that a study concerning Nicosia, which was ongoing at the time and had finished in August 2010, had been ignored.

WHOLESALE buyers of illegal drugs in Cyprus might expect to pay up to €45,000 per kilo for cocaine, about €10,000 euros per kilo for cannabis, and up to €5,000 for a thousand ecstasy pills, a recent study shows.

The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) has done a pilot study done with the European law enforcement agency, Europol, on wholesale drug prices in Europe.

The drugs squad YKAN started gathering wholesale price data in Cyprus last year with the help the Cyprus monitoring centre for drugs and drug addiction (CMCDDA) which has recently published its study.

So far, wholesale prices for 2011 have been collected for ecstasy pills, cocaine, and cannabis which is believed to be the most commonly used illegal drug – the CMCDDA said. 

Cannabis usually went for €10,000 per kilo but prices ranged from €4,000 to €14,000. Cocaine cost between €35,000 and €45,000 per kilo and ecstasy pills cost between €4,000 and €5,000 per 1,000 pills. Skunk cannabis cost between €8,000 and €10,000 per kilo.

A recreational cocaine user told the Cyprus Mail that a gramme of cocaine might cost €100, at least twice as costly as the wholesale rate. 

Skunk cannabis might cost €20 per gramme (at least twice the wholesale cost), the same user said adding however that it was cheaper to buy bigger quantities.

Data collection in Cyprus is still incomplete because of the need to train officers and set up an integrated IT system, CMCDDA said.

Researchers across Europe have defined wholesale drug prices as at least 1.0 kilo or 1,000 pills or doses as appropriate, traded for distribution to other wholesalers or retailers.

Retailers sell small amounts to end users. “Wholesale prices will result from the interaction between demand and supply,” the EMCDDA said in the study. 

If there are more drugs than willing buyers, prices drop and if there are more willing buyers than available drugs prices go up. Also, if there are more wholesalers who can provide a product, they will compete with each other and prices will drop, the researchers said.

The data has been collected to help with law enforcement, policy making and research. 

Europol and the Serious Organised Crime Agency (SOCA) made a template for wholesale drug price collection in 2009, later improved for a second round of data collection in 2010.

Cyprus was among the 23 EU member states and candidate countries who gave information on wholesale prices for illegal drugs including cocaine, cannabis, and ecstasy. The information was mostly collected by undercover police officers, by using informants, or by questioning people arrested by the police.

About 80 per cent of participating countries said they regularly got information from interviews with people arrested in relation to illegal drugs’ cases. Over half said they used evidence from crime scenes and confiscated materials. Almost no one used academic studies that interviewed drugs’ users.

Cyprus did not look at substance purity when looking at wholesale prices because it is considered expensive and time consuming, the CMCDDA said. 

In addition to Cyprus, a number of countries including Germany, France and the UK participated in the study.

Visit www.emcdda.europa.eu to see statistics on those and other European countries.

THE HEALTH ministry’s promised price reductions in medicines will be effective some time within February due to a delay, health minister Androula Agrotou said yesterday.

Agrotou said that changes in the prices of medicines had been expected in January.

But she told parliament yesterday that a problem had arisen with the company tasked to update the price lists and so pharmaceutical services would do it themselves.

“Nothing of essence will change,” she said referring to the postponement.

But opposition deputy Stella Kyriakidou said Agrotou’s predecessor, Stavros Malas, who is now running in the presidential elections, had made empty promises.

“Really, one should wonder on what data the promises of the former health minister to patients were made, making important proclamations of cheaper medicines before leaving the ministry, which he obviously could not keep,” Kyriakidou said.

Malas had promised price reductions of up to 50 per cent in some cases but then agreed with pharmaceutical companies to an average reduction of 7 per cent, the result of pushing forwards a price review due next year. 

The methodology for calculating prices is unchanged and involves getting the average wholesale prices of four EU member states that range from cheap (Greece) to expensive (Sweden). The two countries in the middle are France and Austria. 

Medicines costing €10 or less will be untouched to ensure manufactures continue making them. Companies will also be able to sell over-the-counter drugs, sold without prescriptions, at whatever price they want.

Malas stepped down in October, and Agrotou, the former chief medical officer in the health ministry, took his place. Presidential elections are due in February. The head of Kyriakidou’s party, DISY’s Nicos Anastasiades, is a favourite to win the elections according to polls.

“EVERYBODY knows how this will end,” wrote Nahum Barnea, one of Israel’s best-known journalists, in the newspaper Yediot Aharonot recently. “There will be a bi-national (state).” The “two-state solution” for the Israeli-Palestinian conflict is dead; long live the “one-state solution.”

The two-state solution, promised by the Oslo Accords of 1993, was the goal of the “peace process” of the past twenty years. It envisaged the creation of a Palestinian state in the one-fifth of the former colony of Palestine that did not end up under Israeli rule after the war of 1948. That Palestinian mini-state, in the West Bank and the Gaza Strip, would live alongside Israel in peace, and the long, bitter struggle over Palestine would end happily.

That Palestinian state is no longer a viable possibility, mainly because there are now half a million Jewish settlers living amongst the two million Palestinians in the West Bank and former East Jerusalem. “I do not give up on the two-state solution on ideological grounds,” wrote Haaretz columnist Carlo Strenger in September. “I give up on it because it will not happen.”

The greatest triumph of Israeli Prime Minister Binyamin Netanyahu and his predecessor, Ariel Sharon, has been to make the two-state solution impossible. Both men pretended to accept the Oslo Accords in order to ward off foreign pressure on Israel, but both worked hard and successfully to sabotage them by more than tripling the number of Jewish settlers in the West Bank in only twenty years.

Now the job is done, and it is not only Israelis who can read the writing on the wall. Moderate Palestinians, never all that enthralled with the prospect of a tiny “independent” country completely surrounded by the Israeli army, are also giving up on the two-state idea. As Ahmed Qurei, who led the Palestinian delegation that negotiated the Oslo Accords, wrote recently:  “We must seriously think about closing the book on the two-state solution.”

So the one-state solution is creeping back onto the agenda, if only tentatively. The current Israeli government will have nothing to do with it, since endless, futile talk about an independent Palestinian state serves Netanyahu’s purposes so well. But one day there will be a different government in Israel, and the Palestinians will still be there. What are the odds that the one-state solution might then get real traction?

In a sense, the single state already exists: Israel has controlled the West Bank militarily since the conquest of 1967, and until recently it occupied the Gaza Strip as well. Almost 40 percent of Israelis already support a solution that would simply incorporate the West Bank into Israel permanently.

But what would Israel do with those two million extra Palestinians who would then live within the country’s expanded borders? Combine them with the million and a half Palestinians in Israel, the descendants of those who were not driven out in 1948, and there would be 3.5 million Palestinians in a one-state Israel that included almost all the land west of the Jordan River.

Add the Palestinians in the Gaza Strip, who will number another 2 million in five years time, and there would be 5.5 million Palestinians in Israel. That would mean there were almost as many Palestinians in Israel as there are Jews.

That unwelcome prospect is probably why Ariel Sharon unilaterally withdrew all Israeli troops and settlers from the Gaza Strip and sealed the border in 2005: if there were ever a one-state solution, he didn’t want those extra two million Palestinians to be part of it. He did want to keep the West Bank, on the other hand – but even without the Gaza Strip, the one-state solution would produce an Israel whose population was more than one-third Palestinian.

This is precisely why an increasing number of Palestinians favour the one-state solution. They have tried guerilla war to get their lands and their political rights back, to no avail. They have tried terrorism, which didn’t work either. They tried negotiation for twenty years, and that didn’t work. So maybe the best tactic would be to change the Israeli-Palestinian conflict from an international problem to a civil rights problem.

So the Palestinians should just accept the permanent annexation of the West Bank by Israel, argue the one-staters. Indeed, they should actively seek it. They are already Israeli subjects, by every objective measure of their condition. If they become Israeli citizens instead, then the question of their status becomes a civil rights issue, to be pursued non-violently – and perhaps with a greater chance of success.

That is the logic of the pro-one-state argument among the Palestinians, and it is flawless if you assume that Palestinians would enjoy full rights of citizenship once the West Bank was legally part of Israel. But that is rather unlikely, as the status of Israel’s existing Palestinian citizens already demonstrates. They are much poorer and less influential politically than their Jewish fellow-citizens.

A new public opinion poll in Israel by the Dialog polling group reveals that almost 70 percent of Israeli Jews would object to giving West Bank Palestinians the vote even if Israel annexed the territory they live in. The only alternative is an apartheid-style state where only the Jewish residents have rights, but most Israelis seem quite relaxed about that. The Palestinians are probably heading up another blind alley.

But then, all the alleys are blind.

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

LAST WEEK’S decision to award an offshore gas exploration licence to a consortium which includes a subsidiary of Gazprombank may have been a sweetener for a hoped-for Russian loan to keep the government afloat until the end of its term, reports said yesterday.

Daily Alithia, a newspaper supportive of the DISY party, said the Cabinet’s decision to award the Block 9 licence to a consortium including GPB Global Resources BV (a Gazprombank subsidiary) was clearly a political decision designed to sugar-coat a request made by Cyprus for a €1 billion loan from Russia.

But according to the paper, the loan would not come from the Russian government per se, but rather from Russian banks involved in the Block 9 project.

Citing senior government sources, Alithia said the Christofias administration hopes the €1 billion will be enough to ride out the storm until February’s general elections.

The sources said the government wants at all costs to avoid signing a bailout deal with the EU/IMF, which would come attached with austerity measures.

In fact, Alithia said, this €1 billion is precisely the “new” or “revised” Cypriot request for a Russian loan to which AKEL leader Andros Kyprianou alluded to last Thursday.

Kyprianou had said President Christofias – realising that Russia was having difficulty responding to Nicosia’s initial demand for a €5 billion loan – has submitted a new proposal, which was “now on the table.”

Kyprianou made the revelation shortly after returning from Moscow. But on the same day, the finance minister denied knowledge of any “new” request by Nicosia.

Alithia speculated that the reason why the finance minister was in the dark about this “new” request is because it does not concern an interstate loan, but a different arrangement altogether.

Data seen by the Mail show that to date Block 9 has been by far most the popular offshore prospect in the second licensing round, with a total of eight bids submitted for it.

The prospect lies northeast of Block 12, where US firm Noble Energy reported significant reserves of natural gas after exploratory drilling last year.

By a Cabinet decision, acting on a recommendation by the Commerce Minister, the licence for Block 9 was awarded to a consortium consisting of Total E&P Activities Petrolieres (operator), NOVATEC Overseas Exploration & Production GMbH and GPB Global Resources BV.

But according to Alithia, this consortium’s bid was ranked fourth by the evaluation committee - consisting of government technocrats and experts.

It’s understood that the evaluation committee’s highest rating for Block 9 went to the bid submitted by another consortium, that comprising Italy’s ENI and South Korea’s KOGAS.

Alithia said certain members of the evaluation committee are “outraged” at the Cabinet’s selection. One member was quoted as saying that the winning bid was financially not the most beneficial to Cyprus. He went on to claim that he had been put under “enormous pressure” to change his mind and pick the Total-NOVATEC consortium against his better judgment.

Government sources yesterday neither denied nor confirmed the existence of a divergence of opinion between the evaluation committee and the final recommendation of the Commerce Minister. Everything was done by the book, they told the Mail.

To their knowledge, no company or consortium has indicated an intention to challenge the award decision.

The same sources explained that in assessing the bids for Block 9 the evaluation committee employed just two of the five criteria listed in the call for expressions of interest. These criteria were: the technical and financial ability of the applicants, and “the ways in which the applicant intends to carry out the activities that are specified in the licence.”

But the Commerce Minister employed a different set of criteria (all five) in arriving at his own recommendation.

The other three criteria are: national security; the financial consideration that the applicant is offering in order to obtain the license; and “any lack of efficiency and responsibility that the applicant has shown under any previous licence or authorisation of any form in any country of the world.”

When presenting his proposal to the Cabinet, the minister brought with him two sets of documents: his own recommendation and that of the evaluation committee.

Under the relevant law, the Cabinet reserves the right to override the recommendation of a panel if it deems that other factors are germane, such as issues of national security.

Also bidding for Block 9 was a consortium consisting of Edison International SpA (Italy), Delek Drilling Ltd Partnership (Israel), Avner Oil Exploration Ltd Partnership (Israel), Enel Trade SpA (Italy), and Woodside Energy Holdings Pty Ltd (Australia).

Alithia suggested also the timing of the award of the licences was strange. It said the four offshore licences were awarded just days after another Cabinet session gave the green light to Noble to farm out 30 per cent of its stake in Block 12 to Israel’s Delek group.

The paper said the move was made to “appease” the Israelis for not awarding them the licence for Block 9.

AS IF THINGS were not bad enough for our bankrupt state and the insolvent banks, with the potential lenders playing hard-ball, we now have to start worrying about German objections to our low corporate tax, the main competitive advantage we have for attracting foreign business. If we are forced to increase corporate tax, in exchange for a bailout, it would lead to a drastic contraction of the financial services sector which makes the biggest contribution to our GDP and attracts deposits of billions to Cyprus banks.

The issue was raised in Germany last week when finance minister Wolfgang Schaeuble, was asked during a question and answer session whether Cyprus would be asked to change its corporate tax in order to secure bailout funds. While avoiding taking a clear stand, Schaeuble said that he knew of Eurogroup members that were setting this condition. Then came the report in the authoritative German magazine Der Spiegel, which described Cyprus as a ‘money-laundering haven’ and argued that financial assistance “would mainly benefit Russian oligarchs who have parked illegal money in banks accounts in Cyprus.”

Government spokesman Stefanos Stefanou said the article was libellous and pointed out that Cyprus fully complied with all EU anti-money laundering regulations and had been favourably rated when inspected. This was the correct response to the magazine’s allegations. However he was caught unaware about the issue of the corporate tax, as it had been raised at the last Eurogroup meeting which made the following commitment; “Regarding Cyprus, ministers affirmed their common commitment to fighting tax flight and money laundering.” Did the finance minister not brief the government about this?

Even if he did, the government followed its usual policy of ignoring unpleasant developments in the hope they will disappear. Stefanou’s response indicated that the government had not given any thought to dealing with what could be a very difficult issue. All he could say was that the issue had never been raised in discussions with the troika and “for the government there is no such question.” This defiant rhetoric was also adopted by the AKEL chief who yesterday declared “we will never give in to any threats irrespective of where they come from.” This is the problem with this government – it believes it could run a country through cheap grandstanding. How would it stop the Bundestag from raising the issue of corporate tax when it discusses the approval of Cyprus’ bailout?

Instead of the engaging in hollow rhetoric, it should be devising a strategy for dealing with the problem; it should make contact with the main German parties explaining how important corporate tax is for our economy, and that increasing it would wreck all prospects of recovery. The government could invite the Eurogroup to send inspectors to check allegations of money laundering as well. It is through co-operation and consultation with our partners that we will achieve our objectives, not by antagonising them and dictating to them the terms on which they would lend us money.  

UPDATED 11.40 The government said today that the troika of international lenders will arrive in Cyprus tomorrow and negotiations on a financial aid package will resume on Friday.

"The government has been informed that a team from the troika is arriving in Cyprus tomorrow Thursday and on Friday negotiations resume with the aim of securing an agreement on the (adjustment) programme for a Cyprus loan," government spokesman Stefanos Stefanou said in a statement.

Yesterday, the government said it was prepared for any contingency, including the possibility of a deal being pushed back to 2013.

“All possible scenarios are on the table [for a bailout deal]...even for 2013, and we are ready for them,” government spokesman Stefanos Stefanou said.

He said the government was in constant communication with the troika, while at the same time “keeping open the channels” with Russia for a possible bilateral loan.

In the meantime, the list of reasons for the troika no-show grows ever longer. From initial stalling by the government to warnings from Germany, to leaked troika documents saying Cyprus was not cooperating, the saga has moved in the past three days to moneylaundering accusations on Monday, and yesterday to a reported dispute between the IMF and its European partners in the troika over the Cypriot banks. 

Reports last night suggested the announcement of a date for the troika’s visit was imminent, placing the experts’ arrival here on Friday or Monday.

However IMF sources in Washington told the Cyprus News Agency (CNA) the date was still to be determined.

The latest reason for the delay is said to be disagreement between the IMF and its EU partners over the banking sector reports but the sources would not confirm this. “There are no Europeans and IMF, but only the troika. We have not yet decided when the mission will begin in Cyprus,” the sources told CNA.

Germany, whose finance minister showed a distinct lack of patience with Cyprus last week appeared to be upping the ante on Monday with reports appearing in Der Spiegel quoting Germany's intelligence agency (BND) as saying money laundering in Cyprus had laid bare the political risks involved in approving a bailout. The implication was that “Russian oligarchs and mafiiosi’ who have parked “their illegal earnings in Cyprus” would be the ones to profit most of all from the billions in European taxpayer funds. This was a reference to the island’s low corporate tax rate, which Berlin would like to see harmonised Europe-wide.  The tax rate is one of the Cyprus government’s ‘red lines’ however.

Yesterday the Associated Press reported that German lawmakers would be allowed to review the classified intelligence report on alleged Russian money laundering in Cyprus before voting on a bailout for the country.

Several German lawmakers since voiced concern over the bailout, the AP said. The opposition Greens' lawmaker Priska Hinz said the government agreed yesterday to share the intelligence report, saying "especially on Cyprus, by now there are more questions than answers."

Earlier, state broadcaster CyBC was receiving, from Berlin, reports similar to those on CNA regarding the reported IMF-EU differences over the Cypriot banks.

The IMF is said to rate recapitalisation at €15 billion, while the European Commission is looking at between €9 billion and €11 billion, the reports said.

The state broadcaster said moreover that the European Commission experts are ready to fly to the island, but are being delayed because their IMF colleagues on the troika team are still awaiting the official go-ahead from IMF chief Christine Lagarde.

Having more than likely missed the November 12 deadline for concluding a bailout deal, the next meeting of euro area finance ministers scheduled for next month. By then, however, state coffers could run out of cash.

Reports suggested yesterday that Cyprus has also been caught in the midst of a tug-of-war between the IMF and the EU over the timing of the establishment of a Single Supervisory Mechanism (SSM) for eurozone banks.

The IMF is pushing for the SSM to be set up as soon as possible, whereas some EU countries want to take it slow.

Earlier this year EU leaders forged a tentative deal, representing a shaky compromise between the Germans and French, who had been tussling over how to shore up the eurozone’s stricken banking system — one of the main causes of Europe’s debt crisis.

At the moment, money to help put banks has to go through a country’s government — placing more strain on state finances.

France has been pushing to get all banks in the 17 euro countries under the supervision of one European body by the end of this year. 

But Germany’s Chancellor Angela Merkel, wary of using taxpayers’ money to prop up other countries’ banks, tried to put the brakes on the plan, insisting that creating the supervisor should be done slowly and that “quality must come before speed.”

Reports suggested Merkel, facing elections next year, is seeking to delay a bailout of Spain’s and Cyprus’ banks until after the SSM is in place – which could take several months.

Cyprus applied for an EU and IMF bailout in June after its two largest banks sought state aid to help with massive losses incurred by the Greek debt write-down earlier in the year.

Meanwhile Cyprus yesterday secured EU regulatory approval for a guarantee scheme for its banks on condition that lenders that get help limit their expansion and provide viability plans to ensure they do not have an unfair advantage over rivals.

The two largest banks in Cyprus suffered huge losses due to writedowns of Greek debt and they turned to the government for aid in recapitalising. The European Commission said Cyprus notified regulators of its proposed bank guarantee scheme which will cover new loans agreed and new bonds issued before December 31, with a maturity of up to five years.

The executive Commission said the scheme complied with EU state aid rules, but it laid out some conditions for applicants to the plan.

"Beneficiaries will be subject to behavioural commitments to avoid any abusive use of the state support. These include limitations on expansion and marketing and conditions for staff remuneration and bonus payments," it said in a statement.

"Finally, Cyprus has committed to notify viability plans for companies making intensive use of the scheme. The Commission has, therefore, concluded that the guarantee scheme is an appropriate means of remedying a serious disturbance in the Cyprus economy.”

The Commission has approved similar plans for a raft of countries in the 27-European Union bloc in the last three years. 

Latest reports suggest IMF chief Christine Lagarde is putting the brakes on

President Barack Obama won a second term in the White House on Tuesday, overcoming deep doubts among voters about his handling of the U.S. economy to score a clear victory over Republican challenger Mitt Romney.

Americans chose to stick with a divided government in Washington, however, by leaving the U.S. Congress as it is, with Obama's fellow Democrats controlling the Senate and Republicans keeping the House of Representatives.

After a long, bitter and expensive campaign, the 51-year-old Obama began trying to bring Americans together in a victory speech before thousands of cheering supporters in Chicago. Accused by Romney throughout the campaign of taking a partisan tone, Obama vowed to reach out to Republicans in his new, four-year term.

"You voted for action, not politics as usual," Obama said, calling for compromise and pledging to work with leaders of both parties to reduce the deficit, to reform the tax code and immigration laws, and to cut dependence on foreign oil.

The nationwide popular vote remained extremely close with Obama taking about 50 percent to 49 percent for Romney after a campaign in which the candidates and their party allies spent a combined $2 billion. But Obama comfortably won the electoral votes needed in the state-by-state system used to choose U.S. presidents.

Obama scored impressive victories across the country, so much so that the big build-up over Ohio, Virginia and Florida fizzled. Obama reached the 270 electoral votes needed for election even without those three states, rolling up wins in Democratic strongholds and carrying Nevada, Iowa and Colorado.

In the end, he also won Ohio and Virginia and was ahead in Florida, where votes were still being counted.

Romney, the multimillionaire former private equity executive, came back from a series of campaign stumbles to make it close after besting the president in the first of three presidential debates.

The 65-year-old former Massachusetts governor conceded in a gracious speech delivered to disappointed supporters at the Boston convention center.

"This is a time of great challenge for our nation," Romney told the crowd. "I pray that the president will be successful in guiding our nation."

He warned against partisan bickering and urged politicians on both sides to "put the people before the politics."

Obama told his crowd he hoped to sit down with Romney in the weeks ahead and examine ways to meet the challenges ahead.

The same problems that dogged Obama in his first term are still there to confront him again. He faces a difficult task of tackling $1 trillion annual deficits, reducing a $16 trillion national debt, overhauling expensive social programs and dealing with a gridlocked Congress that kept the same partisan makeup.

'FAILURES OR EXCESSES'

Senate Republican leader Mitch McConnell did not sound like he was willing to concede his conservative principles, in a sign of potential confrontations ahead.

"The voters have not endorsed the failures or excesses of the president's first term, they have simply given him more time to finish the job they asked him to do together with a Congress that restored balance to Washington after two years of one-party control," McConnell said.

The result eliminates the prospect of wholesale repeal of Obama's 2010 healthcare reform law but it still leaves questions about how much of his signature domestic policy achievement will be implemented.

The immediate focus for the president and Congress will be to confront the "fiscal cliff," a mix of tax increases and spending cuts due to extract some $600 billion from the economy barring a deal with Congress.

Obama, America's first black president, won a new term by convincing voters to stick with him as he tries to reignite strong economic growth and recover from the worst recession since the Great Depression of the 1930s. An uneven recovery has been showing some signs of strength but the country's 7.9 percent jobless rate remains stubbornly high.

A DIVIDED CONGRESS

Democrats kept control of the 100-member Senate, seizing Republican-held seats in Massachusetts and Indiana while keeping most of those they already had, including in Virginia and Missouri.

Republicans remained in control of the 435-member House, ensuring Congress still faces a deep partisan divide as it turns to the year-end "fiscal cliff" and other issues.

"That means the same dynamic. That means the same people who couldn't figure out how to cut deals for the past three years," said Ethan Siegel, an analyst who tracks Washington politics for institutional investors.

While the Senate result was no surprise, Republicans had given themselves an even chance of winning a majority, so the night represented a disappointment for them and was in part the self-inflicted result of internal battles.

Had Republican Richard Mourdock - a favorite of the conservative Tea Party movement - not defeated veteran moderate Senator Richard Lugar in Indiana's primary, for example, that seat might have stayed in Republican hands instead of being won by Democrat Joe Donnelly. Mourdock drew criticism for calling pregnancy from rape something God intended.

Missouri Senator Claire McCaskill, who also won on Tuesday, had been considered a vulnerable Democrat until another Tea Party favorite, Todd Akin, won the Republican primary. Akin stirred controversy by saying women's bodies could ward off pregnancy in cases of "legitimate rape."

Democrat Elizabeth Warren, a law professor who headed the watchdog panel that oversaw the government's financial sector bailout, defeated incumbent Massachusetts Republican Senator Scott Brown.

Former Maine Governor Angus King won a three-way contest for the Senate seat of retiring Republican Olympia Snowe. King ran as an independent, but he is expected to caucus with Democrats in what would amount to a Democratic pick-up.

Democrats were also cheered by several state referendums: Maryland voters approved same-sex marriage and a similar measure in Maine and Washington State appeared on track to pass as well - marking the first time marriage rights have been extended to same-sex couples by popular vote.

In addition, Wisconsin Democratic congresswoman Tammy Baldwin became the first openly gay U.S. Senator, defeating Republican former governor Tommy Thompson.

U.S. stock futures slipped, the dollar fell and benchmark Treasuries rose after Obama's victory, which investors took to mean no dramatic shift in U.S. economic policy.

Markets had generally expected Obama to win, with the general view that a victory for the Democrat would favor bonds, as he is perceived to favor low interest rates, while Republican challenger Mitt Romney was broadly seen as more business-friendly and supportive for equities.

International leaders offered their congratulations. Israeli Prime Minister Benjamin Netanyahu, who has a testy relationship with the U.S. leader, vowed to work with Obama "to ensure the interests that are vital for the security of Israel's citizens."

A spokesman for Mohamed Mursi, an Islamist who is Egypt's first freely elected president, said "we hope the newly elected U.S. administration will work to achieve the interests of both the American and Egyptian people."

British Prime Minister David Cameron said Britain and the United States should make finding a way to solve the Syrian crisis a priority following Obama's re-election.

U.S. President Barack Obama gestures with Vice President Joe Biden after his election night victory speech in Chicago

AN 18-YEAR-OLD man was left fighting for his life yesterday after being run over by a motorist on a busy Limassol street.
The accident happened around 9am on Archbishop Makarios III Avenue. Police said the pedestrian was hit by an oncoming car while crossing the street.
The man was rushed to Limassol’s general hospital. Doctors there determined he had sustained serious cranial injuries and multiple leg fractures. The man’s condition was described as critical.
The 28-year-old driver of the car was arrested, booked and released. She will appear in court at a later date.
Police said they were investigating the precise circumstances of the incident.

CYPRUS and Ukraine yesterday signed eight cooperation agreements during an official visit here by Ukrainian President Viktor Yanukovych.
The agreements are the culmination of extended talks between the two nations begun in Kiev last year.
Top of the agenda was the agreement for the avoidance of double taxation concluded by the countries’ finance ministries.
In addition, the two governments signed seven memorandums of understanding for cooperation on maritime merchant shipping, public health, civil aviation, agriculture and foodstuffs, sports, investment promotion, and education.
Speaking after the signing ceremony in Nicosia, President Christofias expressed satisfaction over the completion of bilateral talks, highlighting the double-taxation agreement.
Christofias said the agreement was the end-result of a “political commitment” undertaken by both governments during talks in Kiev last year.
He said that Cyprus and the Ukraine had "a strong foundation," which would help develop relations between the two countries.
These relations would be based on equal principles, and the principles of mutual respect for the sovereignty and independence of the states, he added.
In turn, Yanukovych said he was confident that “we are opening a new stage of relations, which will be more dynamic, more effective, and we are ready for the comprehensive deepening of relations with Cyprus.”

CYPRUS, Greece and Israel yesterday agreed to set up two working groups to expedite cooperation in energy matters.
The agreement was struck in Nicosia at a meeting between Commerce Minister Neoclis Sylikiotis, Israeli Minister of Energy and Water Resources Uzi Landau and Greek Deputy Minister of the Environment, Energy and Climate Change Asimakis Papageorgiou.
Speaking to reporters later, Sylikiotis said the issues discussed concerned the ‘EuroAsia Interconnector’, a project aiming to link Greek, Cypriot and Israeli power grids via a submarine power cable, as well as the southeast Mediterranean natural gas corridor.
“We have decided to set up two working groups to elaborate on the projects in detail,” Sylikiotis said, noting that the groups would be established in the next few months.
For his part, Landau expressed his satisfaction with the decision on the immediate establishment of the two working groups.
He said that cooperation would promote the interests of the three countries and their economies, and would be “an anchor of stability in this prickly region.”
The ‘EuroAsia Interconnector’ project, with an estimated budget of €1.5 billion, will be able to transfer energy with a total capacity of 2,000 MW. The completion period is estimated at 36 months from the start of construction, while the project’s study is expected to be completed within 2012. The maximum underwater installation depth will reach 2,000 m.
The project consists of three junctions, connecting Israel to Cyprus, Cyprus to the Greek island of Crete and from there to the Greek mainland, in Peloponnese, southern Greece.

PARLIAMENT last night passed a law allowing the state to guarantee bank bonds and new loans, in a move designed to provide credit to the struggling economy.
It comes two days after the scheme was cleared by the European Commission, which found the plan proposed by Nicosia was in line with EU state aid rules.
The purpose of the state guarantee scheme is to facilitate the access of eligible credit institutions to medium-term funding. It is part of efforts to stabilise the local financial sector up to the end of the year.
State guarantees will be provided for a period no less than three months and no greater than five years, under bilateral agreements between the government and credit institutions.
The law provides for state guarantees for up to €3 billion, although the initial draft of the government bill called for guarantees double that amount.
The amount was revised downwards due to objections from opposition parties raised yesterday during meetings with Finance Ministry officials to hammer out the final draft.
The legislation also mandates that any single state guarantee exceeding €500 million must be submitted to, and sanctioned by, the House Finance Committee.
In October 2012, Cyprus notified the European Commission of plans to introduce a public guarantee scheme for credit institutions. The guarantees will be covering, against remuneration and eligible collateral, new loans concluded and/or new bonds issued before 31 December 2012, with a maturity of up to five years.
The scheme is open to all credit institutions incorporated in Cyprus, including subsidiaries of foreign banks and cooperative credit institutions. Beneficiaries have to pay a remuneration that is aligned with EU state aid rules.
Moreover, beneficiaries will be subject to behavioural commitments to avoid any abusive use of the state support. These include limitations on expansion and marketing and conditions for staff remuneration and bonus payments.
Cyprus applied for a full EU rescue package in June after its two largest lenders could not meet new capital reserve limits owing to huge losses they sustained on their exposure to bailed-out Greece.
In September, the Commission approved on a temporary basis a bailout worth €1.8 billion for the Popular Bank.

THE VICTIM of a racist attack is suing the state for breaching his human rights following the violent clashes that took place at the Rainbow Festival in Larnaca in 2010.
Sertunc Akdogu, a 32-year-old Cypriot musician- not immediately involved in the fracas between anti-migrant protesters and their anti-fascist adversaries- was stabbed three times just 200 metres from Larnaca police station by a group of masked people carrying weapons on November 5, 2010.
His colleague who was with him, Serhan Oncal, was also seriously injured after being beaten by members of the masked group with a baseball bat.
Nobody was ever charged with the attack.
Instead, the Attorney-general decided to prosecute Doros Polycarpou, representative of the migrant support group which organised the Rainbow Festival in Larnaca that year to counter the anti-migrant march already organised for the same day in the coastal town.
Many international NGOs heavily criticised the decision to charge Polycarpou, while failing to go after a single person from the crowd representing the anti-migrants, and also refusing to accept any responsibility on the part of the police force which was evidently unable to keep the peace that night.
On June 5, 2012, a Larnaca district court acquitted the KISA representative of the charges of rioting and participating in an illegal assembly. Polycarpou said he was acquitted after the prosecution failed to prove its case, noting that the court rejected testimonies given by police officers in court.
One officer had claimed he only made visual contact with Polycarpou during the fracas, however, video footage submitted by police as evidence showed the plain-clothed officer clearly making physical contact with the NGO member.
KISA argued that Polycarpou's involvement in the violent clashes was limited to trying to keep the two sides apart. The NGO also submitted evidence to police of anti-migrant marchers allegedly involved in the violence that ensued after the anti-migrant march passed next to the multicultural festival. The Legal Service has since launched criminal proceedings against a number of those identified by KISA, said Polycarpou yesterday.
Exactly two years on, on November 5, 2012, Akdogu and Oncal made an application for legal aid, with which they plan to sue the state for violating his human rights regarding a range of errors and omissions allegedly made by the institutions of the Republic before, during and after the violent clashes.
Akdogu and Oncal were not the only ones injured that night. Two men from Pakistan and Bangladesh, who did not take part in the trouble, were also injured.
Speaking to the Cyprus Mail, Akdogu said he and his fellow musician went to Larnaca that night to play music in a multicultural event.
“We went there to make music, we didn’t even know much about the Rainbow Festival.” When the fighting started, they stayed back. “It was not our struggle,” he said.
Two hours later they made their way to the car to put their musical instruments away. Around 300 metres from the festival and 200m from the police station, they were attacked by a group of masked people, anywhere between 15 and 30 in number, said Akdogu.
They were carrying baseball bats and knives.
“They were running to the festival, and they attacked us brutally. They hit me on the head with a baseball bat and on my back. I had the guitar on my back and it broke, but it saved my life. They also stabbed me three times on my left side, puncturing my lung and a muscle,” he said.
They also pepper sprayed his face, but luckily missing his eyes, allowing him and Oncal to run away.
At the time, Akdogu was quick to clarify that the group did not know the two musicians were Turkish Cypriot, ruling out the possibility of interethnic violence.
However, two years on, Akdogu is ready to take action, feeling aggrieved that he saw no justice, and was left both physically and psychologically without support, as well as losing 5,000 euros worth of equipment. He accuses the police and government of silence, ignorance and apathy.
“For us this case is not over. It is not over until the system that creates racism, hatred, nationalism and xenophobia is punished and violence is condemned and punished through the courts, and justice will then be done,” he said.
“My goal is to do something positive, to use this experience to make a positive change, act as a bridge between the two communities, unite people, and show we are all human,” he said.

SUPREME Court judges reportedly angered lawmakers yesterday after they asked for judges to be exempt from salary cuts imposed last year as part of an austerity package to shore up the ailing economy.
The matter arose in December last year when parliament passed an austerity package that included pay cuts to the salaries of state officials, among others.
Citing the judiciary’s independence, the judges asked for the law to change and pledged that they will enforce the necessary salary cuts themselves.
That however did not go down well with some MPs who questioned the reason for the exemption.
Reports said the judges departed the meeting unhappy but a group of MPs visited with them later on in a bid to mend fences.
It is understood that the MPs promised to look into the matter anew.
Lawmakers had been warned at the time that the provision may be unconstitutional.
And the President of the Supreme Court had sent a letter to the House when the package was being discussed, offering his commitment that judges would pay voluntary contributions to help efforts for economic recovery.
District court judges have since filed an appeal with the Supreme Court citing constitutional provisions that prohibit any changes to their salaries that will be to their disadvantage.
Article 158, paragraph three states that “the remuneration and other conditions of service of any such judge shall not be altered to his disadvantage after his appointment.”

THE coming year will be very difficult for the Cypriot economy, the finance ministry said yesterday, as it stressed the urgent need for measures to reverse the downward spiral.
The European Commission said on Wednesday it expected Cyprus to stay in recession through this year and next with higher unemployment persisting well into 2014.
According to the EU’s autumn forecast, the island will see its €17.9 billion economy contract by 2.3 per cent in 2012 and by another 1.7 per cent in 2013 while the budget deficit will reach 5.3 per cent this year and  5.7 per cent in 2013.
Unemployment was set to reach 12.1 per cent in 2012, 13.1 per cent in 2013 and spike to 13.9 per cent in 2014, the Commission said.
The finance ministry said yesterday that the Commission’s forecast did not take into consideration any additional measures that would be put in place.
In a written statement the ministry said it expected the economy to contract by 2.2 per cent this year and the deficit to reach 5.0 per cent of GDP.
 The forecasts “show that 2013 would be a difficult year for the Cypriot economy but a gradual improvement is expected during 2014 and 2015,” the ministry said.
But it warned that without adopting any measures the trends will continue.
“And this demonstrates the urgent need to take measures,” the ministry said.
Those measures will be the focus of negotiations starting today between the government and teams representing international lenders, the troika, who arrived yesterday and will resume negotiations with the government today. .
According to the ministry, the discussions will be conducted at technocratic and political levels and will focus on, among others, structural issues, the macroeconomic framework and the island’s financial sector.
The two sides have exchanged views on various matters but disagreements remain on matters such as privatisations and bank recapitalisation.
The ministry said negotiations will continue with the aim of achieving convergence.
Any measures agreed with the troika will be incorporated in next year’s draft budget, expected to be submitted to parliament in around 10 days.
If there is no agreement, the government plans to submit the budget with the counter-proposals it made to the troika.
“Our intention is to incorporate in the 2013 budget the changes we proposed to the troika or any others that will be known to us in the next 10 to 12 days,” Finance Minister Vassos Shiarly said, adding that he expected the draft to be submitted around November 20.
The minister added that it was not the government’s intention to delay submitting the budget, usually done late September or early October, but it was dictated by the conditions.

ENERGY chief Solon Kassinis has called it quits from the state hydrocarbons company KRETYK, citing concerns over the company’s role and scope.
It later emerged, however, that tensions between himself and Commerce Minister Neoclis Sylikiotis may have prompted Kassinis’ decision to walk away.
At any rate, last night the commerce minister said he had yet to receive Kassinis’ resignation in writing.
Kassinis’ intention to step down comes just a month after he and three others were appointed non-executive directors in tandem with the company’s official unveiling.
Asked by newsmen earlier yesterday why he was leaving the post, Kassinis cited certain ‘problematic’ clauses of KRETYK’s articles of association, in particular that which empowers the entity to monitor commercial contracts between the state and other companies.
Article 6 of the founding document states that KRETYK may, “acting on behalf of the Republic, administer and/or check the correct implementation of the terms of relevant contracts that have been concluded in the past or will be concluded in the future by the Republic of Cyprus or its government.”
According to Kassinis, that empowers KRETYK to conclude commercial agreements – a point not disputed – but at the same time to exercise oversight on these same agreements, and ultimately on itself.
“A state company cannot check the contracts of other companies and also have a supervisory and regulatory role. It should be limited only to the commercial aspect,” Kassinis said.
“It cannot possess oversight over the other companies, because there would be no transparency, nor would foreign countries or companies be able to trust us. Besides, this is prohibited by EU regulations.”
Kassinis had proposed that an independent agency be established to scrutinize the contracts.
Mired in political controversy since its inception, KRETYK is a limited liability company with a starting capital of €1 million divided into one million shares of €1 each.
Though fully state-controlled – the shares are vested in whoever holds the position of Commerce Minister – the company is governed by private law.
As such, it is not subject to financial oversight by either the Auditor-general or parliament – a point on which opposition parties have kicked up a storm.
And given that KRETYK cannot be directly financed by the treasury – as there is no provision in the state budget for 2012 – a decision was made recently for the company to apply for a €900,000 loan from a cooperative bank.
Kassinis revealed yesterday it was Sylikiotis who asked him – as the interim head of the company’s board (until such time as the executive directors are appointed) – to put his signature on the loan application.
The €900,000 loan, backed by a government guarantee, would be used for the operating expenses of the company plus the remuneration of the three executive directors, he said.
It’s understood the executive directors’ pay will be upwards of €100,000 per annum.
Kassinis said he was uncomfortable with applying for the loan on behalf of KRETYK, so he suggested that Sylikiotis apply instead.
“After all, he is the owner of the company for the time being,” Kassinis said, alluding to the commerce minister.
Speaking to the Mail later in the day, Kassinis confirmed earlier press reports that he had sought the post of executive director on KRETYK, but Sylikiotis was of a different mind.
“We’re talking about the pinnacle of ingratitude, after all my years of service,” he remarked.
In addition, he claimed that Sylikiotis “insulted him” during a recent function, where Kassinis publicly voiced his reservations about some of the aspects of KRETYK’s operation.
“The minister basically barked at me in front of everyone. That’s something I cannot put up with. If I’m not appreciated, what’s the purpose of staying on?” he said.
Kassinis confirmed also he and Sylikiotis held a meeting on the morning of October 2 to discuss the former’s role in the company. That same day KRETYK was listed with the Registrar of Companies. The company’s official unveiling by Sylikiotis came two days later.
The energy chief also sits on a government-appointed panel tasked with evaluating the bids submitted for Cyprus’ offshore blocks.
His resignation comes in the wake of reports of disagreements over the awarding of an offshore gas exploration licence. Some members of the evaluation panel were said to be “outraged” with the Cabinet’s decision to award the Block 9 licence to a consortium consisting of Total E&P Activities Petrolieres (operator), NOVATEC Overseas Exploration & Production GMbH and GPB Global Resources BV (a Gazprom subsidiary).

IN THE END populism triumphed at the House education committee, as opposition deputies decided to withdraw the bill that would have frozen the budget for the establishment of a medical school at the University of Cyprus and postponed its opening. There is no other explanation for the turnaround by the deputies of DISY, DIKO and EVROKO.
What had changed in the two weeks between the submission of the bill and its withdrawal last Tuesday? Had a benefactor been found to put up the tens of millions of euro required for the medical school, or had the university’s administration generated the funds by making other savings on its €100 million annual budget? Nothing of the sort has happened, as the Cyprus University, like the rest of state sector, believes the taxpayer should come up with funds whenever it asks for them.
In supporting the freezing of the budget, education committee chairman, DISY’s Nicos Tornaritis had said “we are experiencing some difficult times and the spending of every euro of the Cypriot taxpayer needs to be justified.” Two weeks later he did not seem to care about Cypriot taxpayer’s euro, saying his party decided to withdraw its bill so as not to be blamed for delays in the school’s establishment. We suspect this was the reason the other two opposition parties agreed to the withdrawal of the bill.
This irresponsible behaviour by the opposition parties shows why the state is broke. No party ever dared to oppose state spending, no matter how wasteful or unjustified for fear of losing a few dozen votes. DISY, according to Tornaritis, is supporting squandering money the state does not have on a project that could be put back for a few years, not because this is the right decision but because it does not want to be blamed for delaying the opening of the medical school.
Interestingly nobody is telling us how many millions the establishment of the medical school would cost. Rector Constantinos Christofides, said at the committee meeting that by 2020 when it would be fully functional it would cost €7 million a year. But how many tens of millions of euro would be needed to set it up? But even if by 2020 there are 200 students – there will be 40 when it is supposed to open in 2013 – the average annual cost per student could be €35,000, without graduates paying a cent.
If we had responsible deputies, who put the country’ interest above that of their party the bill freezing the budget of the medical school would have been approved instead of withdrawn. This not the time to commit tens of millions to a state medical school we could easily live without, for another 10 years. Our state simply cannot afford such an expense.

MAJOR power cuts caused by separate problems hit the capital Nicosia, Limassol and other areas yesterday causing chaos on the roads for hours, and keeping police and fire services busy.
No injuries or damage were reported despite dozens of calls for help from people trapped in lifts.
No sooner were things getting back to normal in Nicosia after a fault at the Athalassa station caused a two-hour outage, when lightning struck a turbine at the Electricity Authority of Cyprus (EAC) main power plant at Vassilikos, plunging most residential areas of Limassol and several other areas islandwide – including parts of Nicosia for a second time - into near darkness at 4.30pm.  Supply began to be gradually restored to affected areas from 5pm onwards, the EAC said.
“Lightning struck the Vassilikos power station,” said acting EAC spokesman Yiannis Tsouloftas. Back-up systems were put into service to aid efforts to restore full power. “It’s been a very difficult day for the EAC,” he said.
The earlier power cut in Nicosia, which outed half the district between 11.18am and 12.42pm, caused traffic chaos in the capital and left local businesses and banks unable to operate for over an hour and a half.
“Equipment failure was the cause of the blackout,” Tsouloftas said.
The fault occurred between the Athalassa and Alambra sub-stations on the ‘overearth’ transmission lines. Despite early reports, there was no damage to Dhekelia or Vassilikos from the Nicosia outage, Tsouloftas said.  He went on to explain that the blackout was not caused by any inadequacy of electricity production capabilities nor was human error to blame.
Initial reports claimed that the emergency generators at the General Hospital had failed causing several operations to be cancelled. Chief of the General Hospital Andreas Matsas moved quickly to deny the reports.
Speaking to Radio Trito, Matsas told reporters that somewhere between 10 and 12 operations had been rescheduled for tomorrow to avoid any complications but there were no problems caused by the blackout, he said.
Police and the fire service were called in to make sure that traffic jams were kept to a minimum and to rescue people from elevators.
Chief of traffic Demetris Demetriou said police officers were immediately dispatched to main junctions to ease congestion. Demetriou reported that there had been some minor accidents but nothing unusual and urged those on the road to be extra careful.
“The fire services received over 60 calls from people trapped in elevators,” spokeswoman Liza Kemidji told the Mail. Elevator company employees also assisted firemen with the operation as everyone trapped was rescued unharmed reported Kemidji. She said later in the day that they had received a further five calls for help in Limassol when the power went out there.
Businesses, large superstores, restaurants and cafes in Nicosia all ground to a standstill during the blackout.
Police sent out four plainclothes officers to keep an eye on shops in Ledra Street and ancillary roads. One uniformed officer was stationed outside the Bank of Cyprus at Eleftheria Square to discourage any possible thieves.
“Not all of the branches of Bank of Cyprus were affected as our branch at Phaneromeni has a back-up generator,” Bank of Cyprus operations manager Demetris Antoniou said.
Local jeweller Nikos Ioannou was more philosophical having been around since 1945. “We know all of our neighbours and so we’re not worried that anyone might want to steal from us,” he said.
Others were not as calm and collected, with popular cafes and restaurants eager for power to be restored. One café on Ledra Street was still able to serve customers frappe although they were only able to make them in shakers.
Il Forno, one of the most popular restaurants in the old town, was severely affected.  “We can’t work right now and we hope power is restored before the food in our freezers goes off,” chef Sebastian Petrakides said. The restaurant had installed an emergency generator in light of the explosion at the Mari naval base last year, which destroyed the Vassilikos station. However the restaurant’s back-up plan had failed as the generator refused to work during yesterday’s outage.
Just off Ledra Street an internet café lost its customers immediately the power was cut. The owner said he was unable to charge his customers correctly as all records were stored on his computer. “Having no power is a big problem as all of my business goes through computers,” the 24 year old added.
People were further inconvenienced by a temporary loss of mobile network coverage during the blackout.
 

Police officers try to keep the traffic at bay in the capital