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Car tax deadline

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There's a 30 euro fine for those missing the car tax deadline

THE STATE expects to raise around €100 million from road tax – €10million more than last year – despite the increase in the number of cars being taken off the road.

The deadline for paying the road tax expires at midnight on Monday. Failure to meet the deadline will entail a €30 fine plus10 per cent of the tax amount.

The punitive penalty seems to have worked.

“It appears that almost all owners have renewed their road permit,” said senior road transport department official Yiannis Nicolaides on Monday.

The department expects to raise more cash than last year due to a special levy introduced earlier this year.

“Compared to last year we expect to collect an additional €10 million,” the official said.

The total for 2013 was around €90 million.

However, as the economic crisis deepens, more and more people have chosen to take their vehicles off the road.

Some 50,000 people have opted to immobilise their vehicles, 15,000 more than last year, Nicolaides said.

“We think it is also the result of a campaign we have embarked on for the past three years to inform people of their right to immobilise their vehicle and not pay road tax since they will not be using it,” he said.

 

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Pistorius vomits in court at Steenkamp autopsy details

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Oscar Pistorius murder trial

Track star Oscar Pistorius, on trial for the murder of his girlfriend Reeva Steenkamp, wept and vomited into a bucket in a South African courtroom on Monday after hearing graphic details from her autopsy.

Pathologist Gert Saayman was interrupted several times by the 27-year-old Paralympic and Olympic athlete’s sobbing and retching but the defence team argued against an adjournment, saying a break would not improve his state of mind.

Earlier, Judge Thokozile Masipa imposed a broadcast blackout on Saayman’s testimony out of respect for Steenkamp’s family and to prevent children from accidentally hearing its contents.

“Broadcast would compromise the privacy of the deceased, hurt the interests of the Steenkamps and be against the morals of society,” Saayam said when he took the stand to ask for a temporary broadcast blackout of a trial that has so far been shown in its entirety on live television.

Masipa, who has been presiding over the week-long trial, extended the ban to live reporting on Twitter.

Pistorius, nicknamed “Bladerunner” for the special prosthetics he wears in competition, admits he shot 29-year-old Steenkamp, a model and law graduate, but argues that it was a tragic case of mistaken identity and that he thought she was an intruder who had broken in to his luxury Pretoria home.

In his testimony, Saayman confirmed that Steenkamp was hit in the head, arm and hip by three shots fired through the locked door of a toilet cubicle. A fourth round fired by Pistorius missed.

Saayman also disclosed Pistorius was using ‘hollow-point’ rounds, ammunition designed to disintegrate on impact with tissue to cause maximum damage.

Her right upper arm was shattered, the hip wound could well have been fatal, while that to her head would have incapacitated her immediately, he added. No blood was found in her airways, suggesting she breathed only a few times before dying.

In between bouts of sobbing and retching, Pistorius sat with his head bowed, covering his ears with his hands and a white handkerchief in an attempt to block out Saayman’s testimony.

Saayman is the first expert to testify at the trial, which has so far heard several witnesses who reported hearing a woman screaming before a volley of shots in the early hours of Feb. 14 – Valentine’s Day – atPistorius’ home.

The killing stunned South Africa and the millions of Pistorius supporters around the world who admired the athlete as a symbol of triumph over physical adversity.

He had his disabled lower legs amputated as a baby but – running on carbon fibre prosthetic “blades” – made it to the semi-final of the 400 metres at the London 2012 Olympics competing against able-bodied sprinters.

If found guilty of murder, he faces at least 25 years behind bars.

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CBC Governor Panicos Demetriades resigns (Update3)

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CB Governor Panicos Demetriades at the House yesterday _0

By George Psyllides

CENTRAL BANK Governor Panicos Demetriades resigned on Monday after two turbulent years in office, which also saw the launch of an investigation into his dealings with a consultancy firm.

An official statement said Demetriades’ resignation has been accepted by President Nicos Anastasiades.

Reports suggested that he will be replaced by Auditor-general Chrystalla Georghadji, a highly respected technocrat, but there was no official confirmation on Monday night.

Demetriades handed his resignation to Finance Minister Harris Georgiades in Brussels on Monday, in the presence of a European Central Bank (ECB) representative.

Both Cypriot officials were in Brussels for a Eurogroup meeting.

The reason for his resignation was not immediately clear, but he has had testy relations with the current administration and Anastasiades had said late last year that he was seeking his removal.

Citing a source who saw the letter, Reuters said Demetriades cited “family and personal” reasons for his departure, and “difficulty in cooperating with the Board of Directors” at the Central Bank.

The Cyprus Mail has learned that the two sides had come to an agreement and Demetriades will be receiving a payout of around €250,000.

The outgoing CBC chief had asked for over one million euros last year. The government had offered €400,000.

Meanwhile, Attorney-general Costas Clerides said he was not planning to prosecute Demetriades in connection with Alvares & Marsal, a consultancy firm hired to assist the CBC.

Clerides stressed that no deal had been made to drop the case in exchange for the resignation

The attorney-general was quoted by Sigmalive as saying said that his decision had been made after considering the facts of the case.

.Demetriades has been in his post for almost two years, after being appointed by the previous administration.

Tension between him and the president simmered for months, as Anastasiades sharply criticised his handling of the island’s international bailout last March.

The ECB had issued warnings to the Cypriot authorities not to interfere in Demetriades’ work, but locally the Central Bank chief was the subject of much criticism for being slow in restructuring the banking sector.

On Monday, the ECB said it took note of the resignation.

“The ECB takes note of the resignation of Panicos Demetriades who has been the governor of the Central Bank of Cyprus through very difficult times and played an important role in the implementation of the adjustment programme,” an ECB spokesman said. “We count on a fruitful cooperation with his successor.”

Demetriades has maintained that when he took over in May 2012, less than a year before the bailout, he assumed a poorly regulated banking system which had been taking excessive risks.

One of the main criticisms directed against Demetriades has been how, under his watch, the now defunct Laiki Bank accumulated around €9.5 billion in emergency liquidity aid, only to buckle and fail when the ECB threatened to pull assistance.

“How much independence can a central banker have when, from his statements, it appears he was serving other expediencies instead of his country’s interest,” Anastasiades said last year.

For the state to get its €10 billion in bailout funds last March, the president said, it was told to privatise state companies, seize deposits, make painful cuts, and raise taxes.

“Can you tell me how someone persuaded the ECB so that an insolvent bank was given €9.5 billion [in ELA] without all these commitments?” Anastasiades said, suggesting that Demetriades was responsible.

The president also said how Demetriades in the past had said that Laiki had been kept on a ventilator until February’s (2013) presidential elections.

Demetriades has also been the focus of a police investigation into the agreement he had struck with Alvarez & Marsal.

The investigation was launched in late October following media reports that Demetriades had agreed to pay A&M a 0.10 per cent fee on any amount needed to recapitalise the banks, including when cash was seized from depositors.

The deal was allegedly signed after the Eurogroup decided to seize depositors’ cash to recapitalise banks.

An internal CBC audit, leaked to the media late last year, concluded among others, that Demetriades had withheld information and agreements signed with A&M, misled the CBC board, committed millions that were not budgeted, and without the approval of the board signed an agreement to pay the consultancy a “success fee” after the fact, and awarded jobs to one company without a tender procedure.

According to Demetriades’ contract, a month’s notice is required, and for that reason his resignation will be effective as of April 10.

During this period, he will deal with the pending issues before him and will brief his successor.

 

 

 

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Bank union agrees to pay cuts

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THE BANK employees’ union ETYK has decided to accept the labour ministry’s mediating proposal, ending the stalemate in talks with the banks’ association regarding a new collective agreement, following the expiry of the previous collective agreement on December 31, 2013.

The negotiations broke down completely in January when both sides refused to concede any further ground, with the banks’ association asking for substantial cuts on salaries and benefits, citing the need to reduce operating cost in light of the crippling blow suffered by the local banking system in the last year, and ETYK countering with a proposed extension of the retiring age to 65 and demanded that employers – the banks – contribute to the newly created solidarity fund.

Early in the year, the banks’ association decided to declare the negotiations deadlocked and referred the dispute to the labour ministry’s mediating services to resolve.

After several weeks of consultations, the ministry issued its proposal to both sides, calling for tiered pay and benefit cuts up to 14 per cent, the extension of employees’ retirement age from 60 to 65 years of age, and the freezing of salary increments and CoLA for three more years.

Following a meeting on Sunday, ETYK’s board has unanimously deemed the proposal satisfactory and decided to refer it to members’ regional assemblies on Wednesday for final approval.

The new collective agreement would be in force retroactively from January 1, 2014 to December 31, 2016.

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Greece to commission feasibility study for Mediterranean gas pipeline

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New-Gas-Map-Europe

By Karolina Tagaris

Greece launched an international tender on Monday for a study on the feasibility of a proposed pipeline to carry gas from Israel and Cyprus in an effort to reduce dependence on Russian supplies.

The Eastern Mediterranean Pipeline is designed to initially carry 8 billion cubic metres a year of Israeli and Cypriot gas.

It would stretch from Israel’s Leviathan natural gas field to Greece and onto European markets through the IGI-Poseidon pipeline, led by Italian utility Edison and state-controlled Greek utility DEPA.

The European Commission has said Cypriot gas could play an important role in diversifying supplies but its development is complicated by the long-standing rift between Cyprus and Turkey. The pipeline would pass through disputed waters.

Greece’s Energy Minister Yannis Maniatis said there was European interest in creating a new energy corridor, adding it could also reduce energy costs in the recession-hit country.

He said the project was “one more step towards turning Greece into the main gateway to Europe for gas from the Caspian Sea, the Middle East and the southeastern Mediterranean.”

For Cyprus, the pipeline is one of three so-called Projects of Common Interest (PCI) involving the island, approved by the European Commission, which has backed 250 power and gas projects designed to curb reliance on Russian gas imports and create a single market.

The other two are Cypriot plans to create a Liquefied Natural Gas terminal on its southern coast, and a subsea electricity cable linking Israel, Cyprus and Greece.

Cypriot energy minister George Lakkotrypis told Reuters the pipeline feasibility study would be led by Greece in collaboration with Cyprus.

“We agreed that Greece will lead this one while Cyprus leads the PCI regarding the electricity interconnector,” he said.

The highest-profile non-Russian gas project is one to ship Azeri natural gas from the Shah Deniz field, which has become a contest between the Nabucco West project into Austria, led by OMV and the Trans Adriatic Pipeline into Italy, led by Switzerland’s AXPO and Statoil.

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Shots fired in air during raid at Crimea naval base

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Crisis in Ukraine - Feodosia base

Unidentified armed men fired in the air as they moved into a Ukrainian naval post in Crimea on Monday in the latest confrontation since Russian military groups seized control of the Black Sea peninsula.

With diplomacy at a standstill, Russia said the United States had spurned an invitation to hold new talks on resolving the crisis, the worst East-West standoff since the Cold War.

Ukrainian Prime Minister Arseny Yatseniuk, who said he would address the UN Security Council on Thursday, put the blame for the crisis on Russia and accused Moscow of undermining the global security system by taking control of Crimea.

Russian forces have in little more than a week taken over military installations across Crimea, home to the Russian Black Sea Fleet and Russian territory until Soviet leader Nikita Khrushchev gave it to Ukraine in 1954.

Pro-Russian separatists have taken control of the regional parliament, declared Crimea part of the Russian Federation and announced a referendum for Sunday to confirm this.

President Vladimir Putin says Moscow is acting to protect the rights of ethnic Russians, who make up a majority of Crimea’s population, after Ukraine’s president Viktor Yanukovich was ousted in what Russia says was an unconstitutional coup.

On Monday, a group of about 10 unidentified armed men fired in the air at a Ukrainian naval post in Crimea, a Ukrainian defence spokesman was quoted as saying.

Ukraine’s Channel 5 television quoted Vladislav Seleznyov as saying the shooting took place at a motor pool base near Bakhchisaray. The men in two minibuses drove into the compound and demanded Ukrainian personnel there give them 10 trucks.

Earlier, Interfax Ukraine news agency quoted an unnamed Ukrainian official describing the men as Russian troops and saying that none of the Ukrainians at the site was injured.

Russian forces, who have been in control of Crimea for more than a week, have not so far exchanged fire in anger with Ukrainian troops. Shots were fired over the heads of a group of Ukrainians during a standoff at a military airfield last week.

In other armed action, Russian forces took over a military hospital and a missile unit. Reuters correspondents also saw a big Russian convoy on the move just outside the port city of Sevastopol near a Ukrainian air defence base.

It comprised more than 100 vehicles, including around 20 armoured personnel carriers, plus mobile artillery.

CHANCE OF TALKS SPURNED

Putin says Russia is not controlling events in Crimea but denials of Russian involvement are ridiculed by the United States as the two former Cold War enemies wage a geopolitical battle over the future of Crimea and Ukraine.

Russian Foreign Minister Sergei Lavrov told Putin that Russia’s position on Ukraine remained at odds with the West, but US Secretary of State John Kerry had declined an invitation to visit Russia on Monday for further talks.

“It is all being formulated as if there was a conflict between Russia and Ukraine … and our partners suggested using the situation created by a coup as a starting point,” Lavrov told Putin during talks in the Black Sea resort of Sochi.

He did not say why Kerry had postponed the talks.

In Kiev, Yatseniuk said he would address the UN Security Council during a debate on Ukraine. He is also due to hold talks with the US government which will show Washington’s support of the new Ukrainian leadership.

“Russia’s policy is aimed at undermining the basis of the global security system and revising the outcome of World War Two,” Interfax quoted Yatseniuk as telling reporters.

Ukraine’s crisis was triggered in November by Yanukovich’s refusal, under Russian pressure, to sign deals on closer political and trade ties with the European Union.

Although three months of protests against Yanukovich were mostly peaceful, at least 80 demonstrators were killed in clashes after police used force against them, some by sniper fire.

Yanukovich fled Ukraine before a peace deal with the opposition was implemented, and a new national unity government was installed. He is wanted for mass murder in Ukraine and is being sheltered by Russia.

WEST DOES NOT RECOGNISE REFERENDUM

Western countries have denounced the Russian intervention in Crimea and say the borders of Ukraine, a country of 46 million, should remain unchanged. They have said they will not recognise the outcome of Sunday’s referendum.

“The United States is not prepared to recognise any result of the so-called referendum taking place in six days time,” U.S. Ambassador Geoffrey Pyatt said in Kiev. “We are committed to Crimea’s status as part of Ukraine. The crisis needs to be solved diplomatically, not militarily.”

In the latest military movements, in the port of Sevastopol, where Russia has its Black Sea Fleet base, Russian forces disarmed servicemen at a Ukrainian army missile base, Seleznyov said.

He told Fifth Channel television that about 200 soldiers aboard 14 trucks moved on the building at about 1.30 a.m and threatened to storm it if the Ukrainian soldiers failed to give up their weapons.

In the eastern city of Luhansk, Ukraine’s security services said they were investigating the takeover on Sunday of the main administrative building. The region’s top official was held captive in a room where he was made to write a letter saying he had resigned but later said he was still performing his duties.

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Missing defence computer drive found

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THE DEFENCE ministry announced on Monday afternoon that a back-up external computer drive, which had been reported missing from the ministry earlier in the day, was located following an anonymous phone call.

The drive, which was was only used for periodic data related to the registration of incoming correspondence and to the distribution of holiday leave for civil servants assigned to the ministry, had been reported missing early on Monday morning and police had started investigations into how it might have gone missing.

Sources from the ministry had estimated that the drive was probably stolen between Saturday night and Sunday, as it is programmed to automatically back itself up every 24 hours – and the last time the backup took place was at 10pm on Saturday night.

In any case, the ministry confirmed that the drive contained no classified information.

Early in the afternoon, an anonymous phone call was made to the ministry, revealing the drive’s location. Police suspect an inside job and have said that investigations to identify the perpetrators will continue.

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Economist sees little sign of president’s ‘miracle’

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The Economist is concerned about the levels of BoC's non-performing loans

IN AN article titled ‘The bail-out is working; the bail-in isn’t’, The Economist’s take nearly a year after the banking crisis, is that the state of Bank of Cyprus poses the biggest threat to recovery.

The newspaper also said that despite some encouraging signs in the wider economy, it was premature of President Nicos Anastasiades to assert recently that the island was on the way to “a new economic miracle”.

“The main cloud hanging over the economy is the sorry state of Bank of Cyprus (BoC)…” said the newspaper.

It said the task of turning round BoC was immense, for two related reasons.

By absorbing the gross loans in Cyprus of the failed Laiki Bank, the BoC had doubled up on its exposure to the economy, and in particular to property, the Economist said.

It said that at the end of last year 53 per cent of BoC’s loans were non-performing being more than 90 days overdue. This was up from 36 per cent in June.

“With the economy and property market still falling, this bad-debt mountain will get even bigger, while the collateral will shrink further,” the paper said.

The bail-in of depositors with over €100,000 to the tune of 47.5 per cent has also sapped confidence in the island’s banks, particularly in BoC.

“There is a gaping hole in BoC’s balance-sheet between its loans and its deposits, such that its loans are 45 per cent greater than its deposits. The shortfall is met by €11 billion of central bank funding, of which almost €10 billion is emergency liquidity assistance, a measure of the bank’s plight,” the article added.

Referring to the BoC’s new Chief Executive Officer John Patrick Hourican who took over in October, The Economist said he was trying to reduce the bank’s international exposures and rationalise its core activities in Cyprus, which represent around 85 per cent of its loans and deposits. The number of branches has been slashed from 203 last May to 130 and the workforce cut back.

“Hourican is also shaking up the culture not just of BoC but of Cypriot banking by intervening early when clients fail to service their debts,” said the newspaper.

But it concluded that as long as the island’s main lender remains stricken, it is hard to see how Cyprus could stage a sustainable recovery.

At the end of last month BoC announced that it had posted a full-year loss of €2.04 billion for 2013, narrowing from a €2.21 billion loss in 2012.

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Fourth tranche of bailout funds on its way

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Eurogroup in Brussels Edward Scicluna Maltese Minister of Finance with Harris Georgiades

By Angelos Anastasiou

AS EXPECTED, the Eurogroup – the monthly get-together of Eurozone finance ministers in Brussels – gave the green light to release the fourth tranche of financial aid by international creditors to Cyprus late on Monday.

“The Eurogroup has endorsed in principle the disbursement of the next tranche of financial assistance to Cyprus,” said a statement issued after the meeting.

Quarterly on-the-ground progress reviews by the troika mission to Cyprus determine the release of assistance tranches after last year’s €10 billion rescue package from the European Commission, the European Central Bank and the International Monetary Fund, with the third review having been completed successfully in February.

The Eurogroup was updated on the various aspects of the programme’s implementation, including the passing of privatisation legislation by the parliament.

Following a tumultuous plenary session on February 26 that produced a surprise rejection due to unexpected abstentions by some MPs of former minor coalition partners DIKO, the House reconvened three days later and passed the same bill – containing minor changes – comfortably.

The law provides the procedural framework for the privatisation of semi-governmental organisations (SGOs), considered necessary by the troika in order for the cash-strapped government to raise €1.4 billion by auctioning off stakes in power company EAC, telecoms company CyTA, and the Ports Authority to private investors.

Though the decision to privatise was part of the bailout agreement in March 2013, the recent privatisation bill caused the furious reaction of SGO employee unions, who organised several days of protest outside Parliament – where civility was tested on at least one occasion. There were also short periods of power cuts as the EAC operated only a skeleton-staff as part of their demands to safeguard full compensation and benefits in the event of privatisation.

Passing the privatisation bill had been deemed a prerequisite for the release of the fourth tranche of €150 million from the European Stability Mechanism – along with an additional €86 million contribution by the IMF – expected to be disbursed early in April.

“The ESM is scheduled to disburse €150 million by the beginning of April,” the Eurogroup’s statement affirms.

“Concurrently, the IMF Executive Board is expected to decide on the disbursement of €86 million,” it concludes.

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History of stormy relations between president and governor

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Strained relations, President Nicos Anastasiades with the Governor of the Central Bank Panicos Demetriades

 

By Elias Hazou

 

Panicos Demetriades was appointed governor of the Central Bank in May 2012 for a five-year term by then President Demetris Christofias.

On March 18, 2013, after the first haircut decision – on all bank deposits – at the Eurogroup, Demetriades wanted the banks to re-open the following day, but President Nicos Anastasiades put a stop to it because allowing the banks to open would almost certainly have sparked a bank run.

A week later, Demetriades gave a repeat performance, when it was leaked that he intended for the banks – apart from Laiki and Bank of Cyprus – to open without capital controls. Anastasiades summoned him to the presidential palace and convinced him otherwise.

The Central Bank chief’s popularity fell off a cliff after he caused panic by announcing that an administrator would be appointed to run the Bank of Cyprus, omitting to mention that this did not entail winding up the bank. By the time the misunderstanding was cleared up, hundreds of incensed bank employees had converged on the Central Bank.

In late March 2013 parliament was set to vote on a motion calling on the President to sack Demetriades, but MPs ultimately backed off after warnings that the move could open up a legal can of worms.

In May Demetriades told foreign press how he moved his family off the island after receiving death threats following the country’s controversial bailout.

In September the President revealed intentions to get rid of Demetriades by referring the central banker to the Supreme Court on the grounds of incompetence. At the heart of the government’s case against Demetriades was the way he had handled the provision of emergency liquidity assistance (ELA) to Laiki Bank from the time he took over as governor in May 2012, by which time Laiki had already been issued with €3.8 billion in ELA. His decision to continue issuing assistance left the bank with an ELA debt in excess of €9 billion which was then transferred to the Bank of Cyprus when Laiki was wound down under the terms of the IMF-EU bailout in March.

In October the Attorney-general launched a criminal probe into allegations that Demetriades had agreed to pay consultants Alvarez & Marsal a 0.10 per cent fee on any amount needed to recapitalise the banks, including when cash was seized from depositors. The deal was allegedly signed after the Eurogroup decided to seize depositors’ cash to recapitalise banks. Demetriades claimed he signed the agreement under duress.

In an interview on Sigma TV in December, Demetriades said President Anastasiades was fully aware about the deposit haircut before flying out to the first Eurogroup in March. His comments were subsequently dismissed as “false and misleading” by the government spokesman.

 

 

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Time runs short as Europe haggles over key bank reforms

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FILE - European Central Bank Lowers Key Interest On 2,0 Per Cent

By Annika Breidthardt and John O’Donnell

European countries haggled on Tuesday over a scheme to insulate taxpayers from the costs of bank failures, redoubling efforts to avoid an embarrassing delay to the euro zone’s centrepiece crisis reform.

The protracted talks show the politically charged nature of the plan to disentangle states and the banks from which they borrow. A future agency to wind down failing banks, and a fund to pay for the clean-up, will complement European Central Bank supervision of euro zone banks.

A final deal between countries and the European Parliament had been pencilled in for this week but ministers entering the second day of talks on Tuesday conceded that it may take longer because of deep differences.

Divisions were laid bare as Spain and the Netherlands sought to win over a reluctant Germany to support the ‘resolution’ fund from its outset, when it will be small.

Such support could take the form of credit or guarantees to show investors the fund has enough cash to deal with failing lenders right from the beginning.

“This is important for the signal it sends to markets,” Spain’s Economy Minister Luis de Guindos told journalists of the wider banking union, adding that negotiations could be finished next week.

Inside the meeting, he joined Dutch finance minister Jeroen Dijsselbloem in flagging the need for countries to club together in tackling problem banks.

“For the very first years of the fund we need firepower to face up to difficult situations at our banks,” de Guindos said, while Dijsselbloem suggested a credit line from governments.

But German Finance Minister Wolfgang Schaeuble showed little willingness to compromise. “We have agreed in December not to touch the issue of a common backstop,” he said. “We will not find a solution now.”

Although signed off by states in December, the fine print governing how the new ‘banking union’ regime will work has reignited debate.

Time is running out because the parliament has its last sitting in mid-April before disbanding for May elections. Failure to seal a deal before then would mean months of delay and uncertainty given an expected rise in the number of eurosceptic lawmakers after the poll.

Banking union is the most ambitious political project in Europe since the euro. Yet it means different things for the countries involved.

COMMON GOAL?

While France and Spain see it as a step towards sharing bank risks with Germany and advancing towards a common cost of borrowing across the euro zone, Berlin places greater emphasis on imposing losses on the creditors of laggard banks.

“We need to break the vicious circle between banking debt and sovereign debt,” French Finance Minister Pierre Moscovici told reporters earlier. “It’s also a question of unifying the interest rates in the European Union.”

Germany’s Schaeuble, on the other hand, emphasised the need for strict ‘bail-in’ rules to impose losses on bondholders and other creditors of failing banks, as happened when Cyprus was bailed out last year.

“It’s clear that the bail-in rules apply,” said Schaeuble. “They can’t be weakened because it makes no sense to constantly talk about the taxpayer no longer having to foot the bill and then to begin not applying the rules about owners and creditors taking the risk at the start.”

These rules are due to come into force in 2016 but Germany wants them to apply within the euro zone from when the ECB takes on its role of banking watchdog, at the end of this year.

That would herald tougher treatment of investors in banks found to be in poor health in ECB health checks.

The banking union, and the clean-up of lenders’ books that will accompany it, is intended to restore banks’ confidence in one another and boost lending across the currency bloc, helping foster growth in the 18 economies that use the euro.

New lending has been throttled by banks’ efforts to raise capital and cut their risks during a recession, especially in countries hit hardest by the sovereign debt crisis.

The banking union is supposed to break the link between indebted states and the banks that buy their debt, treated in law as ‘risk-free’ despite Greece’s default in all but name.

CUMBERSOME

Euro zone banks now hold about 1.75 trillion euros of government debt, equivalent to 5.7 percent of their assets and the highest relative exposure since 2006, according to the European Central Bank. In Italy and Spain, roughly one in every 10 euros in the banking system is now on loan to governments.

At the heart of the dispute over the scheme is the complex process of closing a bank. Countries are reluctant to cede authority to Brussels and want a laborious system of checks before any decision to shut a bank can be taken.

But the parliament does not want EU ministers involved, arguing it politicizes the process and makes it cumbersome.

Governments and parliamentarians also disagree on how quickly to build up the fund, which will be filled to the tune of 55 billion euros ($76 billion) by euro zone banks, and how soon countries should be able to dip into the pot.

This issue was overtaken on Tuesday by the question as to how the small fund should be supported at its outset.

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CyTA pension fund renews government loan

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CYTA - ÌÏÍÏÙÑÇ ÓÔÁÓÇ ÅÑÃÁÓÉÁÓ

By George Psyllides

THE state telecoms (CyTA) pension fund managing committee decided on Tuesday to renew a €100 million loan it granted the government at the end of 2012.

CyTA chairman Christos Patsalides said the loan was renewed for another three months.

Meanwhile, the respective committee at the electricity company (EAC) postponed a meeting scheduled for Tuesday to discuss whether to renew their loan of the same amount.

Workers oppose a renewal but stress that it has nothing to do with the recent approval of a bill that paves the way for the privatization of semi-government organisations including CyTA and EAC.

The meeting was rescheduled for Thursday pending the ratification of the appointment of the new EAC chairman Othon Theodoulou.

Theodoulou has asked the workers’ unions to accept the renewal for a month, as per a finance ministry request.

The two semi-state organisations, and the ports authority, had agreed to lend cash out of their employees’ pension funds in December 2012 following stark warnings of imminent default issued by the administration of former president Demetris Christofias.

“If these additional financing needs are not secured we will be talking about a state default in the next few days,” finance ministry permanent secretary Christos Patsalides had then told the House Finance Committee.

The ports authority had put up around €20 million.

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US senator says CIA spied on senate panel

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Feinstein Speaks on CIA spying at US Capitol

By Doina Chiacu and Patricia Zengerle

A dispute between the Central Intelligence Agency and a US Senate committee that oversees it burst into the open on Tuesday when a top senator accused the agency of spying on Congress and possibly breaking the law.

Senator Dianne Feinstein delivered a scathing critique of the CIA’s handling of her panel’s investigation into a Bush-era interrogation and detention program that began after the Sept. 11, 2001, attacks but was only made public in 2006.

“I have grave concerns that the CIA’s search may well have violated the separation of powers principles embodied in the Constitution,” Feinstein said in a highly critical speech on the Senate floor by a traditionally strong ally of US intelligence agencies.

She said the CIA searched committee computers to find out how staff obtained an internal agency review that was more critical of the interrogation program than the official CIA report.

“Besides the constitutional implications, the CIA’s search may also have violated the Fourth Amendment, the Computer Fraud and Abuse Act, as well as Executive Order 12333, which prohibits the CIA from conducting domestic searches or surveillance,” Feinstein said.

CIA head John Brennan denied the allegations.

“Nothing could be further from the truth,” he said in a speech at the Council on Foreign Relations think tank.

Feinstein’s comments were the latest salvo in a long-running and bitter dispute between the intelligence committee and CIA over the agency’s detention and interrogation of terrorism suspects, a program that was phased out when inmates were transferred to Guantanamo Bay Naval Base in Cuba.

The Senate Intelligence Committee’s own 6,300-page report criticized some of the harsh interrogation measures used by the CIA, and Feinstein has been pushing to make its findings public.

Feinstein said the internal CIA review mirrored some of the same concerns outlined in her staff’s report, unlike the official CIA assessment of the program.

However, as the panel moved close to declassifying some of the information – a move she said was backed by the White House - the CIA acting general counsel went to the Justice Department to complain about committee staff.

“I view the acting general counsel’s referral as a potential effort to intimidate this staff – and I am not taking it lightly,” she said.

The California Democrat bristled at suggestions her staff had obtained information improperly, and said the CIA itself provided her committee with more than 6.2 million documents.

“The committee clearly did not hack into CIA computers to obtain these documents, as has been suggested in the press,” Feinstein said.

After the speech, Senator Patrick Leahy, the senior member of the Senate, said he had never heard a more important speech in the chamber.

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Downer to visit for farewells

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Former UN envy Alexander Downer is due in Cyprus at the end of this month, the Cyprus News Agency reported on Tuesday.
Citing sources, the agency said Downer would be on the island to say farewell to the two leaders but is not expected to attend their meeting on March 31.
Downer stepped down from his UN job on February 11, only hours after the resumption of Cyprus talks, for which he was not present. The move came after President Nicos Anastasiades gave him the official stamp of disapproval months ago in a public interview, suggesting Downer was not an objective mediator.
Days later Australian newspapers reported that Downer was a given for the post of Australia’s High Commissioner to the UK, which was expected to be announced this month.

 

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No room for ‘nyet’ in Ukraine’s Crimea vote to join Russia

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Will the Ukrainian flag be flying at the Crimean port of Sevastopol come Monday morning?

By Richard Balmforth

Sunday’s vote in Ukraine’s Crimea is being officially billed as a chance for the peninsula’s peoples to decide fairly and freely their future – but in fact there is no room on the ballot paper for voting “Nyet” to control by Russia.

The Crimean voter will have the right to choose only one of two options in the March 16 referendum which the region’s pro-Russian leadership, protected by Russian forces, announced earlier this month.

According to a format of the ballot paper, published on the parliament’s website, the first question will ask: “Are you in favour of the reunification of Crimea with Russia as a part of the Russian Federation?”

The second asks: “Are you in favour of restoring the 1992 Constitution and the status of Crimea as a part of Ukraine?”

At first glance, the second option seems to offer the prospects of the peninsula remaining within Ukraine.

But the 1992 national blueprint – which was adopted soon after the collapse of the Soviet Union and then quickly abolished by the young post-Soviet Ukrainian state – is far from doing that.

This foresees giving Crimea all the qualities of an independent entity within Ukraine – but with the broad right to determine its own path and choose relations with whom it wants – including Russia.

With the pro-Russian assembly already saying it wants to return Crimea to Russia, this second option only offers a slightly longer route to shifting the peninsula back under Russian control, analysts say.

The option of asking people if they wish to stick with the status quo – in which Crimea enjoys autonomy but remains part of Ukraine – is not on offer.

Any mark in one of the boxes is regarded as a “Da” vote. Ballot papers will be regarded as spoiled if a voter fills in both boxes or indeed does not fill in either.

Those who stay away will also not influence the outcome, since the result will simply be based on the option preferred by a majority of those voting.

NO OPTION

“Even if it (the referendum) were legitimate, the two choices presented to Crimean voters offer them no option for leaving Russian control,” wrote Keir Giles of the London-based Chatham House.

“The restoration of this (1992) constitution would be a step towards notional independence under Russian control … Those citizens who were content with Crimea remaining part of Ukraine on the same basis as it has been for the last 20 years do not have a voice in this referendum. There is no third option available.”

The Black Sea territory, which was under Russian rule for centuries and gifted to Ukraine by then-Kremlin leader Nikita Khrushchev in 1954 when Ukraine was part of the Soviet Union, has an ethnic Russian majority population which appears to ensure the vote will be valid on Sunday.

The vote will take place against the backdrop of a pro-Russia billboard campaign showing two maps and visions of Crimea – one covered in a Russian flag, the other with a giant black swastika emblazoned across it.

In Sevastopol, a Soviet World War Two “hero city” where part of the Russian Black Sea fleet is based, another placard urges people to vote to stop fascism, suggesting the vote was a way of stopping Ukraine’s far-right radicals coming to power.

Election officials sought to project the impression of Crimea’s peoples – who include the indigenous Tatars as well as Ukrainians – being offered a real choice. The ballot paper on the web site was in Ukrainian and Tatar as well as Russian.

Valery Medvedev, the Russian-born chairman of Sevastopol’s electoral commission, used a news conference to announce how he would vote.

“We’re living through historic times. Sevastopol would love to fulfil its dream of joining Russia. I want to be part of Russia and I’m not embarrassed to say that,” he told reporters.

Medvedev said the vote would be fair, however. People only had to answer one question in the referendum, he added, before correcting himself to say there were in fact two questions. “Either to be with Russia or to be with Ukraine,” he said.

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Internal strife continues at DIKO

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Energy minister George Lakkotrypis

By Constantinos Psillides

THE internal strife in DIKO rages on, as party spokeswoman Christiana Erotokritou said the DIKO ministers who resigned have abandoned party voters.

“Messrs Lakkotrypis, Fotiou, Kenevezos and Petrides’ decision to abandon the party, its values and its people is of course respected. What we, here at DIKO, are focusing on now is how to deal with matters of economy and the dire developments in the Cyprus problem,” Erotkritou said, adding that their resignations didn’t surprise anyone at the party as they were expected.

The DIKO spokeswoman went a step further, saying that the party respects “all motives behind their decision”, referring of course to the speculation that the four ministers took a step back from the party so president Anastasiades could re-appoint them to their posts.

All four ministers were asked on February 22 by party leader Nicolas Papadopoulos to resign, following a decision by the party executive office to dissolve the government coalition over disagreements on the handling of the Cyprus problem by president Anastasiades, more specifically the joint communiqué.

The ministers made it clear they did not wish to comply with the party leadership, citing the need for national unity. All four didn’t hide their displeasure with the decision, accusing Papadopoulos of forcing them to resign.

They all handed in their resignation, following the rest of the ministerial cabinet. President Anastasiades asked his cabinet to stay until March 15, when he will proceed with a reshuffle.

Energy minister Giorgos Lakkotrypis resigned the party last week, while Education minister Kyriakos Kenevezos, Health minister Petros Petrides and Defence minister Fotis Fotiou all withdrew from DIKO on Monday within minutes of each other.

The three were very careful in their wording, writing that they “suspended their active participation”, a clear jab at the party leadership.

The move did not go unnoticed, with Erotokriou saying on Tuesday that the ministers used an “unprecedented terminology for the Cypriot political scene”.

The ministers didn’t respond to Erotokritou’s comments.

President Anastasiades is expected to re-appoint the popular Lakkotrypis as Energy minister but gave no clear indication on what his plans are for the other three former DIKO ministers.

The DIKO spokeswoman has made it clear over the last two weeks that re-appointing all the ministers, thus solidifying the conflict within DIKO, will be considered a hostile act by the government and will be dealt with accordingly.

 

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Time running out for EU bid to engage Russia, Germany warns

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Steinmeier visits Baltic States

By David Mardiste and Andrius Sytas

The European Union will start preparing further responses to Russia’s actions in Ukraine if Moscow does not show signs of backing down by the weekend, Germany’s foreign minister said on Tuesday, a warning echoed by the Polish prime minister.

Since the fall of Ukraine’s president to pro-Western unrest, Russsian forces have consolidated their hold on Ukraine’s Crimea peninsula ahead of a Russian-backed referendum on the region’s future on Sunday. The new government in Kiev and its Western backers have denounced the planned vote as illegal.

“If the weekend passes without a visible change in Russia’s conduct then on Monday in the European (foreign affairs) council we will have to discuss a next stage of measures,” German Foreign Minister Frank-Walter Steinmeier said during a visit to the Estonian capital Tallinn.

“We don’t want confrontation but the action of the Russian side unfortunately makes it necessary for us to prepare, as I have just outlined to you,” he said on a one-day swing through the three Baltic states, all EU and NATO members whose proximity to ex-ruler Russia makes them nervous about events in Ukraine.

Speaking in Warsaw, Polish Prime Minister Donald Tusk told reporters: “When it comes to sanctions on Russia, a decision has in fact already been made, especially on the procedure of introducing sanctions. The consequence of this will be the start of sanctions on Monday.”

Poland has a special interest in Ukraine and has taken a tough line. They share a border and large parts of western Ukraine were Polish before World War Two. Polish foreign policy is driven by a fear of Russia, its former overlord, pushing west into Ukraine and then threatening Poland’s own borders.

German Chancellor Angela Merkel has been at the forefront of a strategy of “engagement” with Russian President Vladimir Putin since a tug-of-war between Russia and Europe over Ukraine deteriorated into their most tense stand-off since the Cold War.

Participants at a meeting of Merkel’s Christian Democrats on Tuesday said she had told them she is prepared to accept negative consequences of sanctions against Russia. “Events on the Crimea amount to an annexation and Russia cannot be allowed to do this,” the chancellor said with emotion, though she added the EU must keep talking with Russia, the sources said.

EU leaders have so far taken largely symbolic action against Moscow in response, such as suspending talks on visa deals. Merkel says tougher sanctions like travel restrictions and asset freezes could follow if Moscow does not take up her proposal of an “international contact group”.

Its aim would be to facilitate communication between Moscow and the pro-EU government in Kiev in place since the pro-Russian president Viktor Yanukovich was ousted after bloody protests.

Russian forces have since taken over military installations across Crimea, which is home to the Russian Black Sea Fleet and was Russian territory until Soviet leader Nikita Khrushchev gave it to Ukraine in 1954.

The EU is still seeking a diplomatic solution, Steinmeier said, “but so far we haven’t succeeded and time is running out”.

Asked if the next stage might include sanctions on arms between firms from EU/NATO states and Russia, Steinmeier said Germany - the world’s third biggest arms exporter – had little such business with Moscow, but other countries had more.

“That will also have to be included if the current Crimea or Ukraine crisis turns into a permanent conflict between Russia and the European Union, or between Russia and NATO,” he said.

“If it remains an unresolved problem and Russia continues on this path, not just going ahead with the referendum but also integrating Crimea into Russian territory, then there will certainly be thoughts among NATO member states in that sense.”

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Death of Turkish boy hurt in protests triggers further unrest

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15-year-old Gezi Park protester who was in a coma dies

By Mehmet Emin Caliskan and Parisa Hafezi

Protesters clashed with police in Turkey’s two biggest cities on Tuesday after the death of a 15-year-old boy who was hit in the head by a tear-gas canister during anti-government demonstrations last summer.

Police fired water cannon and tear gas to disperse crowds in Istanbul and Ankara, the latest pre-election headache for Prime Minister Tayyip Erdogan, already battling a graft scandal which has become one of the biggest challenges of his decade in power.

Berkin Elvan, then 14, got caught up in street battles in Istanbul between police and protesters on June 16 while going to buy bread for his family. He slipped into a coma and became a rallying point for government opponents, who held regular vigils at the hospital where he lay in intensive care.

On Tuesday evening, police fired water cannon and tear gas in Ankara’s central Kizilay square to scatter several thousand protesters who chanted: “Government of Erdogan, government of corruption, resign resign”. The police pursued the protesters into sidestreets where small clashes continued.

Earlier, police broke up a crowd of more than 2,000 people, mainly students from Ankara’s Middle East Technical University (ODTU), who blocked a highway to protest against Elvan’s death.

There was similar police intervention against hundreds of protesters in Istanbul’s central Istiklal street, one of dozens of places across Turkey where posts on social media had called for protests on Tuesday evening.

Istanbul and Ankara have both seen protests in recent weeks against what demonstrators regard as Erdogan’s authoritarian reaction to the graft scandal, which has included new laws tightening Internet controls and handing government greater influence over the appointment of judges and prosecutors.

Crowds chanted “murderer Erdogan” and “the murderer state will be brought to account” as mourners carried Elvan’s coffin, wrapped in red cloth and strewn with red carnations, to a “cemevi”, an Alevi place of worship, in central Istanbul.

Alevis are a religious minority in mainly Sunni Muslim Turkey who espouse a liberal version of Islam and have often been at odds with Erdogan’s Islamist-rooted government.

Among the throng of up to 1,000 people, some waved plain red flags, while shopkeepers in the Okmeydani district pulled down their shutters as a mark of respect. Elvan’s mother, flanked by a group of women, stood crying at an open window.

“We have come here because of the murderer police. They will be held to account. Berkin Elvan’s blood will not be left on the ground,” said Ahmet Ekinci, one of those in the crowd.

TURBULENCE AHEAD

Elvan was the sixth person to die in violence during nationwide protests in late May and June over Erdogan’s plans to bulldoze an Istanbul park. The protests turned into one of the biggest shows of public defiance of Erdogan’s 11-year rule.

President Abdullah Gul, the first senior figure to publicly comment on Elvan’s death, sent his condolences to the family.

Local media said there were protests in the Aegean city of Izmir, where school children and university students staged sit-ins. The Confederation of Revolutionary Trade Unions (DISK) said it would join Elvan’s funeral in Istanbul on Wednesday.

“Their children steal billions, our children are killed going to get bread,” DISK said in a statement, referring to the corruption scandal which erupted on Dec. 17 with the arrest of the sons of three cabinet ministers.

Erdogan has cast the corruption investigation as a plot to unseat him by US-based Islamic cleric Fethullah Gulen, a former ally whose followers say they number in the millions and who wields covert influence in the police and judiciary.

Leaked voice recordings, many of them purportedly of Erdogan, have appeared on YouTube over the past two weeks, part of what the prime minister sees as a campaign to sully his centre-right AK Party ahead of the local elections on March 30 and a presidential race five months later.

Erdogan has condemned the illegal tapping by Gulen’s followers of what should have been encrypted telephone conversations and has described some of the leaked recordings as “fabricated montage”. On Tuesday, he rounded on the cleric again and suggested there could be more leaks to come.

“I ask you, for God’s sake, you listen to people’s private phone calls, you use them for slander and blackmail, indeed you go further and spy on and record people in their bedrooms,” he told an election rally in the southeastern city of Bitlis.

Gulen has repeatedly denied unleashing the corruption investigation.

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Bayern oust Arsenal, Costa inspires Atletico

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arsenal

Holders Bayern Munich kept Arsenal at bay to reach the Champions League quarter-finals with a 3-1 aggregate win on Tuesday while Diego Costa scored twice as Atletico Madrid won 4-1 on the night to knock out AC Milan.
Bastian Schweinsteiger put Bayern ahead in the 55th minute of the last-16 second leg but Lukas Podolski stunned the Allianz Arena when he fired into the roof of the net five minutes later.
Podolski’s goal gave Arsenal a glimmer of hope although the Germans played keep-ball in the closing stages as the Londoners ran out of gas.
Bayern had won 13 games in a row in all competitions since a 3-2 home defeat by Manchester City in the Champions League in December.
They could have made it 14 victories in succession but substitute Thomas Mueller had a stoppage-time penalty saved by Arsenal keeper Lukasz Fabianski.
In the night’s other match, Costa, who also scored in Atletico’s 1-0 win at the San Siro in the first leg of the last-16 tie, put the La Liga side ahead in the third minute at the Calderon with an acrobatic volley.
Kaka levelled with a header in the 27th before Arda Turan’s deflected effort sailed past Christian Abbiati five minutes before halftime to restore the home team’s lead.
Raul Garcia headed Atletico’s third in the 71st minute before Costa struck again five minutes from time.
Atletico, who previously featured in the last eight in 1997 with a team featuring current coach Diego Simeone, thoroughly deserved their victory, while Milan’s exit means there will be no Italian side in the quarter-finals for the first time since 2009.

 

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Jail sentence for fatal traffic accident

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traffic accident jail

By George Psyllides
A 48-year-old Larnaca man was jailed for 18 months on Tuesday after he was found guilty in the death of a motorcyclist almost three years ago.
Charalambos Poudjiouris, a father of three young children, was found guilty of causing the death of Timotheos Gandides from Georgia on April 6, 2011 on the intersection of Spyros Kyprianou and Papanicolis Avenues in Larnaca.
The defendant had cut off the victim and then abandoned the scene.
He had been driving without licence and insurance.
The court had ruled the defendant’s testimony as unreliable after he gave three false statements trying to implicate the owner of the vehicle he had been using, who was his employer and absent abroad at the time.
At 1am in the morning of the fateful day, Poudjiouris had turned right towards Papanicolis Avenue without checking, cutting off the motorcyclist who was coming from the opposite direction.
The victim had tried to avoid the collision but to no avail.

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