By Constantinos Psillides

THE NICOSIA municipality is in a race against time to complete the Eleftheria Square project by December 2015 or it stands to lose the vital funding allocated by the EU.

The loss would be huge. EU funds would cover 85 per cent, or €25.5 million of the estimated total cost of €30 million. Ten per cent of the cost will be covered by the Nicosia municipality and the remaining five per cent by the state.  Missing the deadline isn’t an option, as neither the local authority nor the cash-strapped state has the funds to cover the loss.

Yet completing the renovation on time poses a massive challenge, because it requires everything to go right in a project where up to now everything has gone wrong.

For a start the project was supposed to be completed by 2013 and has already received a two year extension by the EU. A further extension is highly unlikely, especially on a project that is nowhere near being finished.

The reasons for the delays are numerous, among them work carried out by the Antiquities Department on the Venetian wall, but uppermost is the dispute between the contractor, the municipality and the London-based architectural office of Zaha Hadid, the famous Iraqi architect who designed the project.

The contractor who won the tender in 2011, Miltiades Neofytou Civil Engineering Contractors & Developers Ltd, finally gave up on the works last year after repeated delays drove building costs up and led to a legal dispute with the municipality.

One important delay concerned the bridge connecting Evagoras and Ledra streets and the underground parking which should have been ready by February 2013. The contractor asked for a one year extension but failed to deliver. The bridge is an essential part of the project, as it will provide access from the walled city to Makarios Avenue, giving a much-needed boost to what was once Nicosia’s busiest shopping area.

The contractor blamed the municipality and the architect for the delays and demanded a 552 day extension on the completion date and €3 million in compensation.

Faced with the probability of not finishing the project on time and losing the EU funds, the municipality settled with the contractor last month, paying the company €530,000. The municipality has now called for new tenders.

Relations between the contractor and Hadid’s office had become tense soon after work started. In the most widely reported example, it was said that they had argued for nine months just over the colour of the concrete to be used in the erection of the bridge’s support structures. The architects had a specific shade of white in mind and reportedly shot down a number of alternatives proposed by the contractor.

In an open discussion held at the Pallas Theatre in Nicosia on Wednesday, mayor Constantinos Yiorkadjis explained the reasons behind his decision to dissolve the partnership with the former contractor.

“The framework of collaboration between the two parts was problematic from the beginning, causing legal problems, disputes and demands that resulted in the project being delayed. Resolving our differences in court would be time consuming and would essentially lead to loss of funding,” he told his audience of Nicosia residents. The new tender procedure is due to open this week, and although it usually takes months for a tender on a project like this to be chosen, municipality officials believe work on the site could restart as early as June or July.

To speed things up the municipality is considering splitting the tender into two: one for the Eleftheria Square revamp, and the other for the underground parking below Omirou Street. Miltiades Neofytou had been awarded both projects. The official line is that the work is expected to take 12 months to complete – July 2015 – almost five months before the EU deadline.

The final plan for the square

A source close to the project, who wished to remain unnamed, told the Sunday Mail that effective communication between the architect and the contractor will be crucial to realising this optimistic forecast.

“In almost all projects in Cyprus both the architect and the contractor live on the island so communication between them is immediate. With an architect that is abroad, communication problems are expected to arise,” he said.

“Establishing channels of effective communication between the two sides is a necessity for the project to be completed on time and in the way the architect envisioned it,” the source said, adding that if everything goes according to plan the project could even be finished by the end of May 2015.

With the threat of having to find €25 million if the deadline is missed, it is not surprising that completing Eleftheria Square on schedule is the municipality’s “number one priority”.  “That’s why we are proceeding with opening new tenders, with the aim of finishing it within the timeframe set by the funding agreement with the EU,” Yiorkadjis told the Sunday Mail this week.

By Zoe Christodoulides

A year ago those with more than 100,000 euros in Laiki lost all their savings, those with similar amounts in Bank of Cyprus saw their savings slashed by 47.5 per cent. In the process some lost all the money they had put aside for retirement while others said goodbye to their dreams of buying their own home. Jobs and businesses were all affected. Zoe Christodoulides speaks to three whose lives have changed irredeemably

Andrew Georgiou

“People didn’t just lose their money, but their dignity, pride, dreams and hopes for the future. How many of them can no longer afford to send their kids to university? How many can still live out the things they had planned before all this?”

Andrew Georgiou sits back on the sofa of his Larnaca home. Like so many others, the 57-year-old London Cypriot was a man with a simple plan: to enjoy retirement in Cyprus with the money he had collected throughout his working life. But the reality he had to face shortly after his move to the island could not have been more different to the one he had envisioned.

Andrew left his job for a national UK news agency, took his pension early, and came to Cyprus in early 2013 along with his father to enjoy a peaceful life under the sun. “Little did I know that things would get a lot more complicated instead of getting easier,” he says.

Andrew made the move after selling his London home. And it seemed logical to bring his own and his father’s money along with him, putting it into a Marfin Laiki savings account. “It seemed the natural thing to do, moving money into the eurozone. Never in my wildest imagination did I dream that part of the eurozone would be amputated. Because that what happened – amputation,” he exclaims.

In total, the Georgiou family had an excess of €800,000 deposited in the now-defunct bank for their new life. Andrew enjoyed his move to a seaside home and planned to make a few investments, purchasing local properties for rental. Needless to say, the enjoyment was short lived. Following the bailout, Andrew and his father lost around €600,000. When his father heard rumours that Laiki was in trouble, his bank manager persuaded him not to move his savings as it was effectively state owned. Two weeks later, it went under.

But Andrew seems more concerned about the human cost of the whole ordeal rather than the money that was lost as his father’s health drastically deteriorated shortly after the haircut, when he was diagnosed with leukaemia. “There is no evidence that his illness was brought on by the financial mess.” But, he says grimly, “it sure didn’t help.

“I think he gave up on life the day of the haircut. It had a terribly adverse effect on his health and he just got worse with each passing day,” he recalls. And what did Andrew feel when announcements were being made about the terms of the bailout? “Shock. But more than that, I was just so terribly disappointed that European family would treat Cyprus differently from other European members. It’s very sad to be treated so very abysmally.”

One year down the line, Andrew is looking to take his remaining money out of the country and no longer has any trust in the banks whatsoever. “I wish I had left my money in the UK, but hindsight is a wonderful thing isn’t it?” He pauses for thought. “That’s not to say that I trust the banks in the UK, and I certainly won’t be transferring all my money into one bank. In my eyes, the European wide banking system is pretty much defunct.”

As for future hopes for the island, Andrew doesn’t see the situation getting any better before at least another five years have gone by. “I won’t say that this is a bad place to live but it’s certainly not what it used to be. Like so many other people, I’ve had to change my plans and I’ll tough it out. And yes, one day, the economy will recover. But that, I’m afraid, won’t be for a while.”

Panikos Demetriou

In February 2013, 59-year-old Panikos Demetriou thought he was financially secure. He had €90,000 in one account, €9,000 in another account and €35,000 in a third which he was preparing to send his son in the UK for his upcoming wedding. All deposits were in Laiki Bank. By the end of March 2013, he had to wave goodbye to almost €80,000.

Panikos is yet another British Cypriot who dreamed of leaving the grey drizzle of London for the sunny shores of Cyprus, making the big move seven years ago after many years of hard work in a dressmaking factory. Feeling lonely after his first wife passed away, he decided that the change would do him good, and once in Cyprus, he soon remarried and began a new life. Following the sale of his London home, he felt it was wasn’t really feasible to keep on transferring money over to England and moved all his money over to Laiki five years ago.

“Wherever else would I put it? Under the mattress? I was a fool to think that there were laws to protect us. Little did I know,” he rants. “The corruptness of our system is remarkable. Just remarkable.”

As suspicions mounted about a possible haircut in February- and dubious about any politician who said they would never take any money from anyone’s account- Panikos decided to visit his bank manager, requesting that the account with €95,000 was put solely on his second wife’s name. The bank manager obliged, but omitted to tell him that she also kept his name on the account in order to ensure joint access and supposedly safeguard Panikos from his wife withdrawing the money without his consent.

Once Laiki collapsed and the haircut took place, Panikos not only lost the €35 000 that he had been saving to send his son, but also, €47,500, half of what was in the  €95,000 joint account that was supposed to be solely on his wife’s name. If the bank had followed Panikos’ instructions, the money on his wife’s name would have been safeguarded as it fell within the €100,000 bracket. But as the account was on both their names, Panikos’ share was now calculated along with his other savings held in the bank once the haircut took place.

“I was absolutely furious as I had made it clear I wanted just my wife’s name on that account. And if they had listened, that money would have been secure. Once the banks reopened after those two longs weeks, I stormed in and demanded an explanation from the manager. Her answer was ‘sorry’. That’s a really expensive ‘sorry’ if ever there was one,” he rages. “It was the dying wish of my first wife to give our son that money. And it was all taken. Every bit of it.”

When announcements were being made about the bailout in the media, Panikos recalls going stone cold. “This has never happened before in the world- we should get a gold medal for the amount of money that has been stolen from us. Only in Cyprus.”

In the weeks that followed the bailout, Panikos – unable to send over any money to his son – had to borrow money from people he knew in the UK to help fund the wedding.  The whole ordeal has fundamentally changed the way he thinks about those in power here in on the island. “I trust nobody in Cyprus. Not the political system, not the banking system – it’s all corrupt. I am so angry at how many people in power have gotten away with draining the country’s money and how us simple ordinary people have to pay for it.” And Panikos is adamant about getting as much as he can out of the country. ”I won’t leave a single penny here- I will send it to England slowly and will just keep the minimal amount that I need to live off. I will never ever be confident in this ridiculous system.”

Maria and Giorgos Theodorou

While most people are fuming about the financial loss that the bailout brought with it, Maria and Giorgos Theodorou speak more about the workers they have had to lay off in their small construction company, the lack of euros that have come in after the whole crash, and the dreams that have been tainted as life took a 360-degree turn.

The middle aged couple insist they have always led a humble life, prioritising the future of their two university aged children. “We were never lavish and didn’t get fancy cars or spend lots of money out in posh restaurants,” says Maria. “We organised ourselves and structured our lives for our kids, our future, our pension.”

For over twenty years, the couple jointly run a small construction company with 12 employees. As the economy slowly took a turn for the worse over the past few years, the amount of money that they were owed slowly piled up, but they always just about managed to stay above board. That was, until this time last year.

Everything froze in the days leading up to bailout and their lives have not recovered since. “We weren’t getting paid for any work we had undertaken, we had no money coming in, and before we knew it, we simply couldn’t pay all of our staff,” recalls Maria. “When the bailout took place, it was the end of one tender we had just completed, and there were no other tenders on the horizon. Summer is usually quiet for construction at the best of times, but there was no work at all in the construction industry. Everything stood still.”

The couple have received no income since last September and the dozen company employees slowly became no employees as they were faced with no other choice but to make everyone redundant. “We’re owed so much money and it’s a vicious circle. If we don’t get paid, we can’t make payments,” explains Maria. “We have no company now, with no future work to give us hope. For now, our machinery has been totally immobilised.”

The whole situation has taken a hefty toll on Giorgos’ health, with his wife explaining that six months of terrible stress- as he desperately tried to rescue the company- were just too much for him and he ended up ill in hospital for period of time in October.

Now desperate to leave the country and look for work further afield, the couple are just about managing to fund their daughter’s studies with the little remaining money that they still have saved. With another son in the army however, abandoning ship isn’t the easiest option. And its common knowledge that finding a job anywhere once you’ve hit middle age is a real challenge.

“All my husband and I ever wanted was to provide for our kids like everyone else. You think what can we do? What can we try? Where can we go? There is no safety net here. You can’t just put your life on hold until the economy one day recovers.”

Deeming what happened last March as a “criminal” act, she views Cyprus as “a testing ground – as nothing more than an experiment by EU leaders.” With little trust in anything or anyone in authority, Maria ends the conversation on a wry note.

“I’m thinking of that new BoC advert that says: ‘I believe again.’ Now that’s a bit of a joke, isn’t

By Jean Christou

MOST people remember exactly where they were and what they were doing during a major event, and even more so a traumatic one,

In modern times that was September 11, 2001 for the global community. For Cypriots it would include the 1974 Turkish invasion, the August 2005 Helios plane crash, the July 2011 Mari naval base blast and the March 2013 banking crisis.

On the morning of Saturday March 16 last year, Cypriots woke up to the news that their bank deposits were to be subjected to a haircut or, in the more apt words of one woman: “They stole our money while we were sleeping.”

For a full 13 days afterwards until banks re-opened on March 28 the entire country was in a state of suspended animation akin to the five stages of grieving – denial, anger, bargaining, depression and finally acceptance, but only because there was no other choice but to try and move on.

No amount of demonstrations, pleading or Plan Bs were going to end the EU’s demand for the restructuring of the island’s financial system, and without the troika’s money, everyone knew total collapse was imminent. Yet it all still seemed just too unreal and deep down the feeling persisted that it could never actually happen. It must be a ploy by Brussels and surely the new government would do something to prevent it.

As news began to trickle out on March 16 that all deposits, even those under the insured amount of €100,000 – an amount previously thought sacrosanct – were to be cut, people began heading for ATMs and co-ops, which were open that Saturday. It was like Cyprus had entered the twilight zone. There wasn’t exactly a bank run but at some point the co-ops were told to shut their doors, and news emerged that all electronic transfers had been frozen since the early hours.

President Nicos Anastasiades was in Brussels, for what everyone thought the previous day were simple negotiations on the much-needed bailout. No one could have imagined what was going on behind closed doors in the Belgian capital.

President Nicos Anastasiades in Brussels

A Reuters ‘insight’ article gave an eye-opening account of how only hours before the meeting Anastasiades was having cocktails with German Chancellor Angela Merkel and asking his European buddies to make sure Cyprus got a fair deal.

“Less than 48-hours later, when the deal was finally announced by exhausted officials in the pre-dawn hours of Saturday morning, it seemed anything but,” said the report. It said Merkel’s government and EU officials were determined to make depositors – read rich Russians – pay.

When they finally announced the bailout Saturday morning, the financial officials who signed on to the deal seemed so embarrassed by the across-the board deposit levy that they spoke without mentioning it at all, the report said. One senior EU official who attended the negotiations said when he realised the outcome he wanted to vomit. Edward Sicluna, the Maltese Finance Minister who was present wrote later: “There is nothing more undignified than the sight of a bankrupt person begging for assistance.”

Then Finance Minister Michalis Sarris said afterwards: “I wish I was not the minister to do this.” Anastasiades argued that he had been caught unawares and was presented with a fait accompli. He returned to Cyprus that Saturday night to meet with party leaders. He looked weary as he entered the presidential palace. Government spokesman Christos Stylianides said Anastasiades had twice threatened to walk out of the Brussels talks.

Back in Cyprus shock had given way to anger. Political parties spoke about the “vindictive” troika “unacceptable blackmail” and the “humiliation of Cyprus”. They would never vote for this fiasco.

On the streets people gathered in coffee shops expressing their disbelief. There was no other topic of conversation. “I feel bitter and disappointed because our finance minister stated there would be no haircut but here we are,” said one 70-year old. Social websites and phones were also awash with debate about little old ladies being robbed of their meagre savings.

Employees of Cyprus’ Laiki (Popular) Bank protest outside the parliament building

Demonstrations throughout the following week blamed Merkel, depicting her with a Hitler moustache, and the lefties took to the streets to blame Anastasiades, lugging around photos of him cosying up to Merkel, despite the fact that he had inherited the mess from their great AKEL leader.

And no matter how many promises the president would make about offering new shares and future gas stakes for lost deposits, in the here and now, everyone knew that businesses and households were going to suffer from increased unemployment and wage cuts. For many, there would be no more shopping sprees, private schools, university, eating out, new homes – many even faced and are still facing homelessness – no more new cars or trips abroad. Within weeks queues at food banks and charities had lengthened, and continue to grow a year later.

The EU blamed Anastasiades for the across-the-board levy. He blamed them. In the end the blame game was moot. On Tuesday March 19, parliament threw it out as the president said they would. He spoke of another plan. People breathed a sigh of relief and launded the defiant Cypriot deputies. But Brussels had worse in store. If Cyprus didn’t stop dithering and find a way to impose a deposit levy, all emergency bank funding would be cut off by March 25th, ensuring the collapse of the banks.

Then Finance Minister Michalis Sarris leaves the Russian Finance Ministry in Moscow on March 20, 2013

Sarris set off on a humiliating misadventure to Moscow mid-week to try and borrow emergency funds. Although Vladimir Putin had called the Cyprus deposit levy “unfair, unprofessional and dangerous”, his minions gave Sarris the cold shoulder for two days. Sarris described his meetings with senior officials as “constructive”, a polite diplomatic term that means squat.

All Sarris did manage was an extension to the existing Russian €2.5 billion loan to ease the island’s immediate debt and he left Moscow ahead of schedule looking rather sheepish.

By now cash had become king in Cyprus with the banks still closed. Businesses were finding it hard to function, Limassol port was at a standstill, petrol stations and shops were refusing credit cards, police warned people about keeping large amounts of cash, and the sale of home safes rose.

On Thursday, March 21, rumours about a wind-down of ailing Laiki Bank resulted in long queues at ATMs islandwide but the masters of denial at the central bank insisted Laiki would not be allowed to fail. This didn’t stop the bank’s employees from heading to parliament to protest.

Funnily enough the very next morning deputies, having failed to receive the central bank’s optimistic memo – adopted legislation allowing the government to split the island’s failing lenders into good and bad banks as Cyprus raced to clinch a bailout with only three days to go.

Anastasiades travelled to Brussels on a private jet sent by the European Commission for the Sunday meeting which was fraught with tension. He reportedly told troika representatives that their proposal to saddle the Bank of Cyprus with some €9 billion in ELA funding owed by Laiki effectively meant BoC’s closure in six months. “I table one proposal, you don’t accept it; I table another, same thing. What else do you want me to do?” Anastasiades was quoted as saying.

Eventually in the early hours of Monday, March 25 a draft deal was finally reached. Small depositors were saved, the bigger ones were shafted, BoC would take Laiki’s debt and what was the island’s second biggest bank would be no more. Capital controls were subsequently announced and the banks opened three days later on March 28, and despite the gaggle of foreign media ensconced in Eleftheria Square hoping for a bloodbath, there was no stampede, just little old ladies calmly clutching their bank books.

“This is what they imposed on us and we have to live with it,” was the general consensus. For how long still remains to be seen.

By Patroclos

THIS ESTABLISHMENT will not follow the example of Prez Nik and speak graciously of the penny-pinching Professor Panicos, because he decided to do us all a big favour resign as Governor of the Central Bank. We speak kindly only of people that pass away and as Panicos is in rude good health we see no reason to say anything nice about him.

The Professor collected close to 300 grand in order to step down, “mainly for personal and family reasons” which would not have existed if the pay-off offer was 50 grand. The only real surprise was that he settled for such a small amount, considering last October, in order to quit “mainly, for personal and family reasons,” he was demanding in a excess of a million euro – €1.6m was his starting position to be precise.

Why did he offer us such a big discount now? The amount covers only two of the three years remaining on his contract. The speculation was that he cut a deal, at a drastically discounted price, because he was afraid of facing charges. When he had discussed this possibility last year, there was no investigation in progress, so he could name his price.

Even the amount he settled for was 300 grand too much for someone that performed his duties so inadequately. But in the state sector professional inadequacy and failure has always been very well rewarded and it would have been grossly unfair if the professor left without a generous reward for the destruction of the banking sector, towards which he made a significant contribution. Not everyone could have done it.

Perhaps Bank of Piraeus could reimburse the state as it was the only bank that benefited from Panicos’ stint as Governor. He was literally its saviour, selling the operations of the Cypriot banks in Greece at a fifth of the value of their assets, thus making Piraeus a viable bank again. Paying the 300 grand for such a gift is the least the bank should do.

HACKS and politicians, who have a talent for making a big issue out of irrelevant details and minor technicalities, after decades of dealing with the Cyprob, were concerned about what fund the money came from.

Why had it not been paid by the Central Bank they asked? And why had he been paid such compensation when there was no provision for it in his contract?

The truth is that 300 grand was a small price to pay for getting rid of this disaster-wreaking governor. Had he stayed his position for another three years, his decisions could have cost the economy a few hundred millions and that was the best-case scenario.

In the worst case we could have been left with no banking system, so paying him to go – even if the money came from the state fund for widows and orphans or for refugee single mothers – was the best thing the government could have done.

IN A BRIEF statement he made about his resignation, the professor said “my actions were always aimed at ensuring confidence and stability in our financial system.” This was an unintentional admission of his dismal failure.

Had his actions been successful he would not have insisted that his compensation money was deposited in a bank account abroad. Whichever way you look at it, making the payment abroad one of the conditions of the resignation deal was not exactly a vote of confidence by the Governor in our financial system.

Had he left the money in a bank in Cyprus, we may even have believed his boast that “I have always acted in the best interests of our country.” The transfer of the money abroad was also a violation of the capital controls imposed by the Central Bank, but who cares.

THE NEWS of Panicos’ exit brought joy and jubilation to some sections of the Central Bank staff viewing his departure as signalling an end to the reign of terror and intimidation he had imposed, with the help of his inner circle and Security Service.

The members of the inner circle, according to our mole, were not too happy. His PA and AKEL appartchik, Eleni Markadji, also known as Cruella de Village, was in tears when she heard the news, aware that her days as the acting governor, barking orders at everyone, were over. It is back to secretarial duties for her, in some pokey little office, answering the phone, typing letters and reminiscing about her glorious past.

Meanwhile, the head of the Governor’s Office and Communications, the gormless GG packed his bags and went home as soon as he heard the news. The distraught communications chief was incommunicado on the day the governor resigned.

LITTLE is known, outside the Central Bank, about Panicos’ personal security team that was hired on his initiative as soon as he took over and was paid directly from the Governor’s budget that is checked by nobody. It gave the bank the image of a mini-police state, Panicos’ heavies roaming the premises checking on people.

Four of the heavies were hired as chauffeurs – of the two chauffeurs already employed one retired and the other was put in charge of the flower-pots – and in charge of the team was a former frogman hired as a security consultant. There were another two – a former National Guard commando and one woman who was hired as the chauffeur of the governor’s wife who decided to stay in England.

Despite the fact that Mrs Demetriades did not live in Kyproulla, the Central Bank carried on paying her chauffeur. It is amazing that the Central Bank pays for a chauffeur for the governor’s wife, not to mention the seven-member security detail for Panicos who obviously likes to pose as a tribal warlord.

IF ONLY Prez Nik could have paid the three DIKO ministers he was forced to sack by Averof, a small compensation, he would not have felt so guilty about his decision. Such was his guilt that he cried during his speech at Friday’s swearing-in ceremony for the new ministers at the presidential palace.

It was a shock to see him cry over such a trivial issue. Honestly, were the departures of Fotiou, Kenevezos and Petrides from the cabinet something worth crying in public about? Would they be such a loss to the government? The prez should have been overjoyed to get rid of those losers.

We have never seen Nik in tears before, but it seems the late Ethnarch set a trend in 2004 (he cried for the Republic), that was also followed by the comrade who wept in public for AKEL. What is it that makes these guys so embarrassingly emotional? Why do they all see themselves as benevolent grandfathers who want to be good to everyone?

We wanted the Nik that threw ashtrays at people that crossed him, as president, and not some sentimental softy that wants to be loved.

HIS GUILT was justified as he had stitched up the three Dikheads. He had assured them that he would keep them in the government despite Ethnarch Junior’s demand that he sacked them. All three quit the party so they could keep their ministerial posts, which pay much better than DIKO membership, and subsequently were told by Nik they would be axed.

The reason for this was that DISY chief Averof, had threatened to withdraw his party’s support for the government if the three stayed at their ministries. The wily Averof probably did this as a favour to his good buddy Junior, sparing him the public humiliation of being so provocatively snubbed by the prez.

Nik may have given in to Averof, but he could not resist the temptation to ridicule the spoilt brat Junior. Two of the three new ministers he appointed were also DIKO members, causing Junior to carry on his public moaning and moralising.

Interestingly, Junior only complained about one of the Dikheads appointed. He said nothing about the appointment as education minister of Costas Kadis, who had served as minister for his father and had been appointed chairman of the CTO in December on his suggestion.

This was because Kadis’ appointment had the blessing of the Archbishop and Junior did not want to make any more enemies this week. Having half of DIKO bad-mouthing him for pulling out of the government was enough.

The Archbishop was on radio on Friday singing the praises of the regular church-goer Kadis, who looks like a preacher that fasts for much longer than the regulation 40 days.

Why do presidents ask for the Archbishop’s approval (even Tof did it) before appointing an education minister? Chrys is no expert on educational matters and that is putting it mildly.

POOR old Junior has been made to look like a complete novice. His claims that Nik was behaving like a party boss, hell-bent on undermining DIKO was just too ridiculous for words. It was not as if Nik had put a gun to the heads of DIKO members to force them to become ministers.

As everyone knows, people join DIKO in order to get promotion at work, in order to get themselves or kids appointed to a state or SGO job, to get a seat on the board of the SGO, to land a government contract or to become a minister. Fotiou, Kenevezos, Petrides, Lakkotrypis and the newly appointed ministers behaved in the true DIKO spirit, in snubbing their party for the sake of a ministry.

But Junior is too immature, selfish and spoilt to understand that ‘greater love hath no Dikhead than this: to sacrifice his party membership for a ministerial post’. The knowledge of this was enough to bring tears to Nik’s eyes.

IT IS EXACTLY one year since the first Eurogroup decision that proposed a hair-cut on all bank deposits to generate the funds needed to stave off state bankruptcy. The proposal was rejected by the defiant parties in House of Representatives – even pro-government Disy refusing supporting the bill and abstaining – in the unjustified belief that we could find an alternative source of funds or secure a better deal

The finance minister flew to Moscow in the vain hope President Putin would bail us out, while economists in Cyprus were arguing that we should hold out as the decision would cause contagion in the euro-zone and force the Europeans to reconsider. Before the second Eurogroup meeting scheduled for the following Sunday, the resolution bill for Laiki Bank was submitted to the legislature, sending shock-waves across the country and exposing the hollowness of our powerless politicians’ fighting talk.

The decisions of the second Eurogroup meeting, on March 24, at which President Anastasiades was faced with a take-it-or-leave-it choice, were much worse, but he was forced to take it because the alternative was bankruptcy and an exit from the euro. An ultra-harsh restructuring regime was imposed on the Bank of Cyprus that included the bail-in of shareholders and depositors, the transfer to it of Laiki’s €9 billion ELA debt, which the government could not repay, and the fire-sale of its operations in Greece, at a small fraction of their value, because Greece’s banking system had to be protected from contagion.

State bankruptcy was avoided thanks to the €10 billion loan from the troika but the rate of deterioration of the economy was accelerated. A year later, unemployment is still rising, fast approaching 20 per cent, NPLs at local banks and co-ops are close to 50 per cent, interest rates remain the highest of the euro-zone and the future of thousands of businesses is in the balance. The government however, ignores all this and boasts about the positive progress reports it has earned from the troika. These relate primarily to the state sector and have nothing to do with the real economy, for which the only positive is the forecast that its rate of contraction would slow down.

This perfectly sums up the consequences of the MoU. The public sector, which together with the banks caused the economy’s collapse, has been protected by the government, while the private sector has been suffering the real consequences of the bailout, in the form of higher as well as new taxation, extortionate interest rates and capital controls. The overwhelming majority of people on the dole queue were private sector employees while those who are still in work have seen their wages drastically cut and not always paid on time.

The smallest pay cuts were experienced in the broader public sector, which despite the government’s declarations about downsizing has hired an additional 800 workers in the last year – 300 graduates of military school were hired by the National Guard that already has too many officers and 500 contract teachers were given permanent jobs, at a time of contracting classes. Our politicians have learnt absolutely nothing from what has happened and continue with the same irresponsible, profligate policies that led to the collapse, as if their only responsibility is to safeguard the high living standards and privileges of public sector employees, at the expense of the rest of us.

This was an opportunity to drastically cut the public sector payroll and make it viable in the long term. It was an opportunity to ensure public employees contributed towards their pensions and retirement bonuses, like everyone else does, but the government did not have the guts to put public finances on a sound and rational basis. Even in the case of the increase in the social insurance contribution private sector workers are having an additional one per cent deducted from their wages but public employees, only half a per cent.

Instead of seizing this opportunity to rationalise state finances and bring public sector wages in line with the private sector and the size of the economy, the government chose to reduce its deficit by increasing its tax revenue, thus reducing the falling disposable income of the lowest-paid workers and putting an additional squeeze on struggling businesses. No better, our parties and their wise deputies continue the politics of reckless populism, championing the causes of privileged public sector workers and opposing bills included in the memorandum.

A year on, the economy may be in ruins and poverty spreading at an alarming rate, but nothing has changed in the way the country is run. We seem to have learnt absolutely nothing from the mistakes of the past.

By Elias Hazou

STILL STANDING, but barely. That’s how a prominent economist describes Cyprus, a year on after the bailout/bail-in. The economy may have shown itself to be more resilient than most expected, but there’s evidence to suggest the impression may be an artificial one. What commentators do agree on is that 2014 will be the year of reckoning.

The decisions reached in that crucial week in 2013 – which started on March 16 and culminated in the Eurogroup determination on March 25 to impose the toughest of conditions on Cyprus in return for a 10 billion euro bailout – have been likened to an economic train wreck.

The memorandum (MoU) imposed by the troika of lenders – the European Commission, the European Central Bank and the International Monetary Fund – included the winding down of Laiki bank, with Bank of Cyprus (BoC) being saddled with its debt. Uninsured deposits over 100,000 euros at Laiki were wiped out, those at BoC slashed by 47.5 per cent.

A year later, unemployment is at record levels. The jobless rate was bad enough (14. 8 per cent) just before the March 2013 decision, but by the end of the year it soared to 17.2 per cent. According to the latest data released by the statistical service, there were 53,204 people registered unemployed in February 2014. In January, the unemployment rate eased off slightly to 16.8 per cent.

Year-on year (February 2014 data), the hardest hit were people employed in the finance and insurance sectors, followed by accommodation and catering, public administration, processing and commerce. And joblessness is projected to jump to 19 per cent by the end of this year.

Hardship is now part of the landscape. Food banks, and even some soup kitchens, have sprung up. The Cyprus Institute of Statisticians said recently that 5.7 per cent of the population over 18 years old is dependent on municipal food banks or other charities for food.

Virtually all the indices are disheartening. From January to December, manufacturing production fell 12.8 per cent. Turnover volume of retail trade shrank by 6.1 per cent, and registration of private saloon cars fell by a whopping 29.6 per cent. The trade balance deficit at the end of 2013 was €3.2bn.

On the flipside, and despite a 2.4 per cent drop in tourist arrivals, revenue from tourism held up well, even rising by 8 per cent compared to 2012 – as Russian high spenders again came to the rescue.

The banking sector took the proverbial (and literal) beating. In January 2014 total deposits of non monetary financial institutions in banks were €46.9bn, compared to €68.4bn for the same month last year.

The bleed-out – heavily influenced by the seizure of Laiki’s uninsured deposits – began in February 2013, when rumblings were first heard of a bail-in. That month total deposits were €67.4bn. In March, the month of the Eurogroup decision, they fell to €63.7bn, and from then on it was all downhill.

There’s a silver lining, if one could call it that: the rate of the deposits leakage started slowing down around October, although lenders – especially the flagship Bank of Cyprus – continue to seep millions to this day.

In March 2013 households held €32.7bn deposits. That figure plunged to €27.8bn by January this year.

Despite the drastic deleveraging of Cypriot banks, lenders are still highly exposed. In January total loans to households and corporations stood at €63bn. Overall, lenders had €16.1bn more outstanding loans than deposits on their books.

At the end of last year, 53 per cent of Bank of Cyprus’ loans were non-performing (more than 90 days overdue in payments), 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.

Bank of Cyprus clings on, for the time being. Despite half of its loans portfolio classed as non-performing, the lender has a respectable capital ratio of 10.2 per cent; though it has dropped since July, when the index was at 10.5 per cent.

As anticipated, the country’s output took a hammering. Gross Domestic Product fell by 5.1 per cent last year, though this was nonetheless milder than the 8.7 per cent decline forecast last April by the troika of international lenders.

But the reason may have been a spike in consumption, as people spent cash they took out of banks they no longer trusted after savings were raided. The boost in spending somewhat offset the fall in GDP, but this is something that will likely not last, says George Mountis, director of business development at Emergo Wealth, a venture capital firm.

Meanwhile as bank administrators seek to recuperate loans, predicts Mountis, more companies in the red will be wound down, leading to more layoffs.

“The single largest challenge lying ahead is restoring confidence to the banking sector,” the economic analyst tells the Sunday Mail.

Short on cash, and desperate to clear their books of bad loans, banks are being extremely stingy with new loans, depriving the market of badly-needed liquidity.

Given that sorting out the non-performing loan mess may take years, says Mountis, lenders will need to get creative to both attract foreign investors and lure back wary would-be savers.

“Right now there’s a great deal of interest from investors in distressed real estate assets. But the banks won’t easily let go of these assets because then they’d have to write them off, which would sap at their equity.”

Cypriot banks may be creaking, but meantime there are other things that could be done to jumpstart the economy.

Such momentum, proposes Mountis, might come from privatising state-owned enterprises sooner rather than later. Privatisations are a condition of the €10bn international bailout the government got last March.

Alex Apostolides, lecturer at European University of Cyprus, likewise thinks that implementing the bailout agreement is a must.

Improving the quality of government services, which impacts the performance of the private sector, is one reform right at the top of his list.

“2014 is the year when we have to make the MoU our MoU,” he stresses.

Other than the economy’s weak competitiveness, the economist highlights other concerns: the “silent sufferers” out there who are getting close to the six months of unemployment benefits they are allowed.

Also, by the end of the bailout programme, Cyprus must slash the civil service by 5,000 in order to tackle the massive public payroll. But so far the government apparatus has been reduced by only about 2,000.

Title deeds are another major issue. Under the MoU, by the fourth quarter of 2014 Cyprus must ensure that the title deed issuance backlog drops to fewer than 2,000 cases of immovable property units with title deed issuance pending for more than one year.

Looking back, the largest blow to the economy in the last 12 months has been the huge withdrawal of liquidity, says Mike Spanos, a consultant with M.S. Business Power Ltd.

“Within a split second, a huge amount of money ceased to exist,” he says, alluding to the seizure of customers’ uninsured deposits at Laiki and then Bank of Cyprus.

“That was a massive shock,” he adds. “Liquidity is the fuel of an economy. Less liquidity means less employment, less disposable income.”

Spanos, too, is a believer in strict enforcement of the troika-imposed MoU.

“We need smaller government. Ideally, governments should account for around 25 per cent of GDP. Before the March crisis, the state here accounted for 48 per cent of GDP. Public debt was 80 per cent of GDP. Had the debt been lower, that would have given the government leeway to borrow more from international lenders without causing the debt to GDP ratio to skyrocket. It might also have allowed the government to backstop the banks in trouble, thus avoiding the bail-in.”

No figures are yet available on direct foreign investment inflows during 2013, so the picture isn’t clear.

Despite initial fears, foreign businesses have not fled the country en masse. In fact, anecdotal evidence suggests that several foreign-based investment and private equity firms have opened up shop over the past year.

But Spanos says this should be taken with a grain of salt. First, companies thinking about relocating cannot do so overnight. Moreover, one shouldn’t look at how many foreign companies are registering, but rather how many of them are actually banking in Cyprus.

Asked to sum up the one year after the bail-in, Spanos offers this punch line: “We’re still alive, though maybe not kicking.”

By Aleksandar Vasovic and Mike Collett-White

Crimeans decide on Sunday whether to break away from Ukraine and join Russia in a referendum that has alarmed the ex-Soviet republic and triggered the worst crisis in East-West relations since the Cold War.

Thousands of Russian troops have taken control of the Black Sea peninsula, and Crimea’s pro-Russian leaders have sought to ensure the vote is tilted in Moscow’s favour.

That, along with an ethnic Russian majority, is expected to result in a comfortable “Yes” vote to leave Ukraine, a move that could prompt U.S. and European sanctions as early as Monday against those seen as responsible for the takeover of Crimea.

Polling stations opened at 8 a.m. (0600 GMT) and close 12 hours later. Provisional results will be released late on Sunday with the final tally expected one or two days later.

At a polling booth inside a high school in Simferopol, the Crimean regional capital, dozens of people lined up outside to cast their ballots early.

“I have voted for Russia,” said Svetlana Vasilyeva, a veterinary nurse who is 27. “This is what we have been waiting for. We are one family and we want to live with our brothers.

“We want to leave Ukraine because Ukrainians told us that we are people of a lower kind. How can you stay in such a country?”

The majority of Crimea’s 1.5 million electorate, like Svetlana, support leaving Ukraine and becoming part of Russia, citing expectations of better pay and the prospect of joining a country capable of asserting itself on the world stage.

But others see the referendum as nothing more than a geo-political land grab by the Kremlin which is seeking to exploit Ukraine’s relative economic and military weakness as it moves towards the European mainstream away from Russia.

Ethnic Tatars, Sunni Muslims of Turkic origin who make up 12 percent of Crimea’s population, said they would boycott the referendum, despite promises by the authorities to give them financial aid and proper land rights.

TWO OPTIONS

Russian President Vladimir Putin has justified his stance on Crimea by saying he must protect people from “fascists” in Kiev who ousted the Moscow-backed Viktor Yanukovich in February following a violent uprising in which more than 100 people were killed.

The protests began when Yanukovich turned his back on a trade deal with the European Union and opted for a credit and cheap oil deal worth billions of dollars with Ukraine’s former Soviet overlord, Russia.

Kiev and Western governments have declared the referendum illegal, but have been powerless to stop it.

Voters have two options to choose from – but both imply Russian control of the peninsula.

On the surface, the second choice appears to offer the prospect of Crimea remaining with Ukraine.

However, the 1992 constitution which it cites foresees giving the region effective independence within Ukraine, but with the right to determine its own path and choose relations with whom it wants – including with Russia.

The streets of Simferopol have been largely calm in the days leading up to the vote, although the heavy presence of armed men, many wearing black balaclavas, has created an unnerving atmosphere in the normally sleepy town.

On Saturday night, about 30 men in balaclavas carrying automatic weapons barged into the Hotel Moscow, a Soviet-era hotel where many Western reporters covering Sunday’s referendum are staying.

They said they had come to investigate an unspecified security alert and did not threaten anyone, but some witnesses saw it as a move to intimidate journalists.

Crimean Prime Minister Sergei Aksyonov, whose election two weeks ago in a closed session of the regional parliament is not recognised by Kiev, does not officially acknowledge that Russian troops are in control of Crimea – a position also maintained by Moscow.

They say that thousands of unidentified armed men, visible across the region, belong to “self-defence” groups created to ensure stability.

THOUSANDS OF SOLDIERS

But the Russian military, which leases the Crimean naval base of Sevastopol from Ukraine, has done little to hide the arrival of thousands of soldiers, along with trucks, armoured vehicles and artillery.

Masked gunmen surrounding Ukrainian military bases in Crimea have identified themselves as Russian troops.

Adding to tensions on the eve of the referendum, Ukraine’s military confronted Russian forces which crossed Crimea’s regional border on a remote sand spit, some 30 km (20 miles) off the mainland.

Crimea’s separatist government said its own forces had moved to defend a gas pumping station. Ukrainian officials said no shots were exchanged.

What happens to Ukrainian forces in Crimea after Sunday’s vote is one of many unanswered questions. Commanders are nervous about how Russia will go about taking control of military bases where Ukrainian forces are still armed.

Crimean authorities have said Ukrainian servicemen will have the choice of surrendering their weapons and walking away peacefully or joining pro-Russian local forces.

In the run-up to the referendum, the worst violence in Ukraine has been in the east, where acting president Oleksander Turchinov said there had been three deaths in two days.

He also said there was “a real danger” of invasion by Russian troops across the eastern border. The area has a large number of Russian-speakers – significant since Putin has vowed to protect ethnic Russians and Russian-speakers in Ukraine.

Red Bull’s Daniel Ricciardo was stripped of his first Formula One podium finish at his home Australian Grand Prix on Sunday after his car was found to have broken fuel regulations, the governing FIA said.

Nico Rosberg drew first blood for Mercedes in the new Formula One season with a dominant Australian Grand Prix victory on Sunday after pole-sitter Lewis Hamilton and world champion Sebastian Vettel retired with reliability problems.

The 28-year-old German capitalised on a brilliant start from third on the grid, snatching the lead before the first turn and roaring to a 24.5-second victory ahead of Red Bull’s Daniel Ricciardo under a cloudy sky at Albert Park.

Danish rookie Kevin Magnussen finished third on his race debut for McLaren.

Rosberg, tipped to duel with team mate Hamilton for the championship, celebrated his fourth race victory and first since last year’s British Grand Prix, when he was also the beneficiary of technical mishaps to Hamilton and Vettel.

Nico Rosberg (L) of Mercedes AMG GP greets his team mates

“Brilliant stuff, what a car you’ve given me! What a car!” Rosberg said over the team radio after crossing the line.

The gaping margin of victory underscored Mercedes’ superior preparations for F1′s technical revolution, which saw all teams struggle during winter testing with the new V6 turbocharged hybrid engines.

The glitches continued as only 14 of the 22 cars finished on a gusty day at the bumpy street circuit which was doused by a brief rain-shower early in the race.

Hamilton, who snatched pole position at the end of a wet qualifying session on Saturday, noticeably lacked power on his start and was called in by his team to retire on the third lap.

Twelfth off the grid, Vettel also struggled at the start and retired only a few laps after Hamilton, complaining of engine performance problems.

That snapped a nine-race winning streak for the German dating back to the Belgian Grand Prix in August.

Red Bull’s Daniel Ricciardo

Ricciardo thrilled home fans by taking his maiden podium spot in his first race weekend with Red Bull and drove with admirable composure after being challenged by Magnussen over the closing laps.

Magnussen’s podium, the first by a Dane in Formula One and the team’s first since 2012, was an exact match of Hamilton’s first F1 race for McLaren in 2007 when the Briton qualified fourth and finished third.

McLaren’s Jenson Button finished fourth, with Ferrari’s Fernando Alonso fifth.

Williams driver Valtteri Bottas finished sixth for his best F1 result after an outstanding race from 15th on the grid. His eight point haul was more than his team scored in all of last season.

The race began farcically, with Marussia driver Max Chilton stalling on the grid before the pre-start installation lap and his team mate Jules Bianchi then repeating the mishap, forcing a second formation lap.

Both Marussias started from pit-lane behind Lotus’s Romain Grosjean, who was also dealt a drive-through penalty for leaving his garage prior to the 15-minute signal before the race.

Japan’s Kamui Kobayashi lived up to his reputation as a combustible racer by ploughing into the back of Felipe Massa’s Williams at the start, taking both drivers out of the race at the first corner and prompting an FIA investigation.

By Matt Spetalnick

About 93 percent of voters in Ukraine’s Crimea region supported union with Russia on Sunday, Russian state news agency RIA quoted an exit poll as showing.

Polling stations in Crimea closed at 1800 GMT. Another Russian news agency, Interfax, said voter turnout had exceeded 80 percent.

The exit poll cited by RIA was conducted by the Crimean Institute of Political and Social Research.

The White House warned President Vladimir Putin on Sunday that Moscow would face sanctions in coming days and international isolation that will hurt Russia’s economy, as Washington fumed over a referendum in Ukraine’s Crimea region that it was powerless to stop.

“We are putting as much pressure on the Russians as we can to do the right thing,” White House senior adviser Dan Pfeiffer said as voters in Crimea, under the control of Russian forces, decided whether to break away from Ukraine and join Russia.

With Sunday’s referendum widely expected to favor union with Russia for a region that has a Russian-speaking majority, President Barack Obama’s Republican critics accused the administration of showing weakness in the Ukraine crisis and said now was the time for U.S. resolve to prevent Putin from formally annexing Crimea.

Obama appears intent on showing he was not bluffing in his threat that Russia would pay a price for its seizure of Crimea, but his options are limited.

Secretary of State John Kerry told Russian Foreign Minister Sergei Lavrov in a telephone call on Sunday that the United States would not accept the results of Crimea’s referendum on seceding from Ukraine and it continued to urge a political resolution on Moscow, a State Department official said.

Pfeiffer said the administration was working with European partners to step up pressure on Russia in the worst East-West standoff since the Cold War. Crimea’s pro-Russian regional government went ahead with the referendum despite U.S. and European threats against Moscow.

“You can expect sanctions designations in the coming days,” Pfeiffer told NBC’s Meet the Press, as the administration prepares to identify Russians whom the United States will seek to punish with visa bans and asset freezes the president authorized last week.

A U.S. sanctions announcement could come as early as Monday, a source close to the matter said. Foreign ministers from the European Union, which has major trade ties with Russia, will decide on possible similar action in Brussels on Monday.

While Washington and its allies essentially have ruled out military action, American and European Union officials worked over the weekend preparing coordinated lists of those to be targeted initially.

Sanctions are not expected to be imposed on Putin himself at this point, and a congressional source said the first round could also spare Russian oligarchs close to him.

Though news reports have cited some of Putin’s senior aides as possible targets, U.S. and European officials could decide to start mostly with lower-level Russian officials seen as complicit in the takeover of Crimea.

“Otherwise you leave yourself with no room to escalate” the allied response, the congressional source said. The measures would include bans on travel to the United States and Europe and a freeze on bank accounts and other assets held in those places.

COMPLICATIONS

At the same time, the Obama administration is mindful that Russia could retaliate with steps of its own. Any efforts to punish Moscow are complicated by the need for cooperation on Iran nuclear diplomacy, the removal of Syrian chemical weapons and use of Russian territory for the U.S. withdrawal from Afghanistan.

In Sunday’s television interview, Pfeiffer sidestepped the question of whether Washington would provide military aid to Ukraine’s interim government, which has accused Russia of violating its sovereignty over Crimea.

“We’re looking at all ways of assistance,” Pfeiffer said.

He called on Congress to pass an economic aid bill for Ukraine that has stalled due to political wrangling.

Pfeiffer said Putin has a choice. “Is he going to continue to further isolate himself, further hurt his economy, further diminish Russian influence in the world, or is he going to do the right thing?” he said.

Republican Senator John McCain, just back from a visit to Ukraine, urged the Obama administration to do more. He called for military assistance to Ukraine, resumption of development of a U.S. missile defense system for Eastern Europe and steps toward NATO membership for Georgia and Moldova.

“The United States of America has to first of all have a fundamental reassessment of our relationship with Vladimir Putin. No more ‘reset’ button,” McCain told CNN, referring to Obama’s outreach to Russia early in his first term that has since been abandoned.

Tennessee Senator Bob Corker, the top Republican on the Senate Foreign Relations Committee, told Fox News “there’s no question our administration has created an air of permissiveness” by failing to take a tougher line with Russia.

By Martyn Herman

Two Steven Gerrard penalties helped Liverpool embarrass bitter rivals Manchester United 3-0 at a stunned Old Trafford on Sunday to leave them breathing down the necks of Premier League leaders Chelsea.

Gerrard’s strikes either side of halftime put the visitors in control and Luis Suarez sealed only Liverpool’s second win at Old Trafford in nearly 10 years with a well-taken third.

Skipper Gerrard could have completed a first ever hat-trick of spot kicks in the Premier League but struck the foot of the post after Nemanja Vidic was red-carded for tripping Daniel Sturridge shortly before Suarez completed the rout.

With nine matches remaining to Chelsea’s eight, Liverpool’s run of five consecutive league wins has left them four points behind Jose Mourinho’s side who were beaten 1-0 at Aston Villa on Saturday having had two men sent off.

Liverpool, seeking a first English title since 1990 after long being in the shadow of United, could have won by an even bigger margin as they underlined the incredible turnaround in fortunes for English’s football’s two great north west rivals.

They ended last season 28 points behind champions United, who managed one shot on target on Sunday, but are now 14 clear of David Moyes’ side who now look almost certain to finish outside the Premier League’s top four for the first time.

“I got a bit cocky with the third penalty,” Gerrard told Sky Sports. “I’ve come here many times and been played off the park and but to come here and dominate like we did, we’re even a bit upset we didn’t get more goals.

GENUINE CONTENDERS

“We’ve shown today we’re genuine contenders and we’ll fight to the end. I don’t think their defence has ever had a more difficult 90 minutes.”

Moyes conceded his side were now struggling to qualify for next season’s Champions League, unless they overturn a 2-0 deficit against Olympiakos in Wednesday’s last 16 tie and go on to win the trophy.

“It looks like we are a long way off it, we are well aware of that but we are going to keep fighting,” said the Scot.

Gerrard’s first penalty after 33 minutes followed a deliberate handball by Rafael that could have earned the defender a second yellow card, while his second shortly after the break was for a clumsy Phil Jones challenge on Joe Allen.

Both were dispatched with dead-eye accuracy to de Gea’s left, one high and one low.

Wayne Rooney forced Simon Mignolet into a fine save before halftime as United briefly sparked into life but both he and Robin van Persie cut frustrated figures throughout.

United’s day went from bad to worse when Vidic sent Sturridge sprawling in the area with a lunging tackle and though Gerrard could not beat David de Gea again Suarez’s neat finish after 84 minutes capped a dazzling Liverpool display.

Vidic, who is joining Inter Milan at the end of the season, now has four red cards against Liverpool in his United career, more than any other player against one opponent in the history of the Premier League.

Tomas Rosicky’s thunderous strike after 72 seconds was enough to secure a precious 1-0 derby victory for Arsenal over Tottenham Hotspur on Sunday to rekindle their Premier League title hopes.

Consecutive away league defeats had seen Arsenal lose ground at the top but they held off a spirited second-half revival by Spurs to move to join Liverpool on 62 points, four behind leaders Chelsea who were beaten at Aston Villa on Saturday.

Tottenham were caught on the counter-attack with only a minute on the clock and when the ball dropped to Rosicky 25 metres out on the right he lashed the ball first time into the top corner of Hugo Lloris’s goal.

The home side, whose season is fizzling out, raised their game after the break and Nacer Chadli and Emmanuel Adebayor both failed to convert decent chances.

Tottenham’s third consecutive defeat in all competitions left them fifth in the table, seven points behind fourth-placed Manchester City who have played three games less.

By Angelos Anastasiou

FOLLOWING a week of denials, the widely suspected backroom deal between former Central Bank governor Panicos Demetriades and the government was confirmed by Finance Minister Harris Georgiades, amidst declarations of outrage by opposition.

Speaking on public radio on Monday, Georgiades tried to appear nonchalant while acknowledging the rumoured behind-the-scenes bargaining that led to Demetriades’ sudden resignation last Monday.

“It was an agreement between the outgoing governor and the government for his voluntary departure,” he said.

Demetriades’ resignation drew criticism when it emerged that it came with a reported €265,000, or roughly two years’ salaries, paid to him by the government in compensation, while his employment contract included a similar clause only in the event of his dismissal – but not his voluntary exit.

“His resignation was voluntary but what the governor had asked for – and the government accepted – was the payment of this amount in compensation,” Georgiades said.

The finance minister’s admission of haggling included a strange assertion that the government “never tried to claim otherwise”, even though the government’s spokesman Christos Stylianides and his deputy Victoras Papadopoulos, as well as Anastasiades, were explicit in denying charges of backroom dealing throughout last week.

But despite Monday’s revelation, the bigger picture remained blurry as Georgiades made no mention of the attorney general’s decision to suspend prosecution against Demetriades, also rumoured to be part of the deal.

Later on Monday, socialist opposition party EDEK issued a harsh statement lambasting the government’s bartering, signing it off with a vague suggestion that Demetriades’ access to information allowed him to secure a favourable deal.

“For one week, the president and the government spokesman told the public that the governor’s resignation was the result of an ‘understanding’ and that ‘there had been no transaction’,” EDEK’s statement said.

“The withdrawal of the prosecutions against him, almost simultaneously to his resignation, coupled with the outrageous severance package he received, as well as the finance minister’s admission, leave the government irreparably exposed in the eyes of the public.”

Ruling party DISY’s spokesman Prodromos Prodromou tried to downplay the issue, alluding to near-unanimous earlier calls by political parties for the need to replace the governor, and claiming that the final “arrangement” was in the country’s best interest.

“Did some parties prefer to have kept the situation of disarray, conflict, and destructive decision-making?” he mused.

“Let’s not bury our heads in the sand – ideally, this arrangement would have been come to months ago,” he said.

With regard to the issue of severance pay, Prodromou argued that Demetriades “was entitled to some compensation” due to the fact that his contract wouldn’t be up for three more years, and accused parties citing the figure of “playing to the suffering of the unemployed and the low-income earners”, a practice which he dubbed “not serious”.

By Constantinos Psillides

ATHENS IS the only city abroad that for the time being meets the criteria of having a ballot box set up for the coming European Parliament elections for Cypriots to vote, said Interior Minister Socratis Hasikos on Monday.

Hasikos clarified that that may change by election day, as more and more register to vote.

“We decided that for a ballot box to be set up abroad, at least 150 people have to be registered,” said the minister, adding that the number of people showing up to register is disappointing. “We have to do more to generate interest. Both the government and the parties have to try and do more,” said Hasikos.

The interior minister was speaking to the press following a meeting with party representatives regarding public apathy over the coming elections. “Party involvement is helpful for find out how many people will vote. I hope we generate enough interest to get more ballot boxes set up abroad,” said the minister.

Hasikos assured the public that interior ministry staff will be ready for the elections.

Asked on the subject of Turkish Cypriot voters, Hasikos responded that all Turkish Cypriots over the age of 18 who have Republic of Cyprus identity cards are eligible to vote, even if they live in the north.

“We will set up ballot boxes in points near the crossings and provide them with the opportunity to vote, if they so wish,” he said.

By Constantinos Psillides

The House Finance Committee has questioned government plans to push legislation to increase taxation on winnings from OPAP games and the national lottery, in an attempt to secure the €20 million projected by the troika memorandum.

According to deputy committee chair Angelos Votsis, troika technocrats expected a €20 million gain on taxing OPAP games (Joker, Proto, Lotto, Super 3, Kino, Extra 5, Propo) but only received €2 million.

But at a committee meeting on Monday, deputies heard that when calculating the amount expected from taxing OPAP games and the national lottery, troika technocrats took into account the whole amount awarded and didn’t consider that taxation applies only for winnings over €5,000. Taxation rates had been decided by the House in 2012.

The finance ministry has proposed a new taxation policy under which a 15 per cent tax will be imposed on winnings from €100 to €500 and a 20 per cent tax on winnings over €500. But even that increase will not make up the shortfall, according to Votsis.

“If the proposed amendment of taxation is implemented, it will still yield only 10 million euros, not 20 million which is our goal. It will also result in unfair competition for OPAP and may boost illegal betting,” said Votsis, adding that the amendment has been sent back to the finance ministry for reconsideration.

DISY MP Prodromos Prodromou noted that the government has to take into consideration the fact that other forms of betting is not subjected to taxation and also the fact that OPAP has a monopoly in some forms of gaming.

Greens MP Giorgos Perdikis said that the first troika-proposed taxation didn’t work and instead drove people to illegal gaming, which is rampant.

THE FUNERAL of Patroclos Stavrou – a close associate of Archbishop Makarios and a long-time fixture at the presidential palace – who died on Saturday aged 81, will be held at the Theou Sofias church in Nicosia on Wednesday.

Stavrou held the title of Undersecretary to President under four presidents, starting with Makarios in 1963 and ending during the presidency of the late Glafcos Clerides in 1993.

A writer, editor and columnist, Stavrou was the first Cypriot to be awarded by the Academy of Athens in 1969 for his book on the poet Kostis Palamas. He was a prolific author.

For 40 years of his life he also promoted the works of Greek writer and philosopher, Nikos Kazantzakis – author of Zorba the Greek – to which he held the copyright. Stavrou was legally adopted by Kazantzakis’ widow in 1982 and inherited the copyright in 1995.

Stavrou was born in Nicosia in 1933, graduated from the Pancyprian Gymnasium, studying philosophy at the University of Athens.

During the period 1957-1960 he served as assistant to Archbishop Makarios and in 1960, after Cyprus became independent he was appointed Director of the Office of the President of the Republic, and in 1963 he was appointed Undersecretary to the President, a post he held until June 1993, four months into the Clerides presidency.

Stavrou suffered a stroke in 2011 and had been in ill health since.

The funeral will be held at 2pm.

British Airways have announced the resumption of direct flights from Paphos international airport to Gatwick, London.

According to a press release, the Paphos-Gatwick flight will be operated by A319 five times a week, on Mondays, Wednesdays, Fridays, Saturdays and Sundays.

Flights are scheduled to resume on March 30, 2014.

Freddie Stier, commercial manager of British Airways Cyprus-Greece, said that “the company expects a significant number of travellers to use the new destination for their summer vacations or business trips.”

WHEN Canadian troops, the first UN peacekeepers to Cyprus, arrived here on March 15, 1964 they were to stay only three months.

Their living conditions were difficult at first. They slept under the stars and later in abandoned buildings, but mostly in tents.

After more than two years of this they were able to obtain the use of buildings near Nicosia Airport. This became Camp Maple Leaf or ‘home away from home’.

Facilities gradually improved and Cancon became firmly established as part of life in Cyprus.

In 1966-67 there was a small incident that temporarily damaged relations between some Canadians and members of the Greek-Cypriot National Guard. A Canadian soldier dumped a large shipment of rancid canned sardines over a cliff with the word ‘poison’ printed in red all over the boxes. The Cypriots came across the sardines and thinking the words meant ‘fish’ in French (poisson), ate all the sardines. Fortunately there were no deaths but many Greek Cypriots thought the Canadians had tried to poison them.

After the 1974 invasion the Canadians moved into the abandoned Ledra Palace.

The main centre of tension, the Nicosia Zone came under Canadian control. Life on the ‘Green Line’ was never easy. Canadian solders were within shooting distance of both opposing forces. At times they faced bullets, threats and insults from both parties.

The strength of the contingent reached a high of over 1,100 in 1964-65 out of a total force of 6,500. But as tension subsided by 1969 UNFICYP was reduced by about half and reorganised. When hostilities broke out again in July 1974 Canada had around 480 troops stationed here.

Canada doubled its contribution during the invasion. This was reduced again in December 1974 to 750 and the Canadians became responsible for Nicosia East and the airfield. By late 1978 the contingent was further reduced to some 500. Cancon pulled out in 1993 but has maintained a presence with a handful of staff officers.

CANADA is keen to participate in the development of Cyprus’ offshore hydrocarbons, energy minister Giorgos Lakkotrypis said on Monday.

His comments came shortly after meeting Canadian Veterans Minister Julian Fantino, on an official visit to the island with ten veterans of the Canadian UNFICYP contingent for a week of events to mark Canada’s participation in the force.

As well as meeting President Nicos Anastasiades and Defence Minister Tasos Mitsopoulos, Fantino also met Lakkotrypis.

The two ministers agreed to organise trade missions between the two countries, part of a drive to enhance bilateral relations.

Speaking on state broadcaster CyBC, Lakkotrypis confirmed that Fantino conveyed to him the interest displayed by Canadian outfit Sea NG in the interim gas tender launched by Cyprus.

Sea NG specialises in CNG transportation. The company has developed its proprietary Coselle System. In 2006 Sea NG received approval for construction of a CNG ship from the American Bureau of Shipping. To date no such vessels have been built.

After his meeting with Anastasiades, Fantino said they had talked about “great opportunities” for Cyprus to grow and “the kinds of things that can happen between Canada and Cyprus to create win-win situations”.

“It’s 50 years of Canadian involvement in Cyprus. We are here visiting with ten of our veterans who actually served here over the fifty years of work that Canada has done here,” said Fantino.

Over 25,000 Canadian troops served in UNFICYP since 1964 and 28 lost their lives on the island in that time. Canadian troops were instrumental in defending NicosiaAirport in 1974 and saving it from falling into the hands of Turkish troops.

As part of the events this week, a photo exhibition on the Canadian peacekeeping mission was opened at Famagusta Gate last night while a documentary ‘Our Man in Tehran’ will be shown tonight at the same venue at 8.30pm. It tells the true story of the Canadian Ambassador to Tehran, Ken Taylor, who helped six American diplomats escape during the hostage crisis at the US embassy in Iran in 1980.

Tomorrow there will be a lecture on the Canadian mission in Cyprus at the EuropeanUniversity by historian Dr Greg Donaghy at 6pm.

In 1993 Canada withdrew most of his troops from Cyprus but still retains a small presence at UNFICYP.

The delegation’s visit coincides with the return of one of the last groups of the Canadian armed forces mission to Afghanistan.

“The members of the Canadian Armed Forces in Cyprus left an indelible mark of our troops but also on the history of both Canada and Cyprus,” said Fantino

He said Canada will do everything it could to support the current talks process, which he had discussed with Anastasiades.

“We want to encourage him – and I did actually on behalf of Canada – to continue along that path” Fantino said. “This is the only way to go. I am very pleased to see how committed he [the President] is to this lasting solution that we are all very hopeful it will eventually happen,” he added.

Canada eager for hydro-carbons role

CANADA is keen to participate in the development of Cyprus’ offshore hydrocarbons, energy minister Giorgos Lakkotrypis said on Monday.

His comments came shortly after meeting Canadian Veterans Minister Julian Fantino, on an official visit to the island with ten veterans of the Canadian UNFICYP contingent for a week of events to mark Canada’s participation in the force.

As well as meeting President Nicos Anastasiades and Defence Minister Tasos Mitsopoulos, Fantino also met Lakkotrypis.

The two ministers agreed to organise trade missions between the two countries, part of a drive to enhance bilateral relations.

Speaking on state broadcaster CyBC, Lakkotrypis confirmed that Fantino conveyed to him the interest displayed by Canadian outfit Sea NG in the interim gas tender launched by Cyprus.

Sea NG specialises in CNG transportation. The company has developed its proprietary Coselle System. In 2006 Sea NG received approval for construction of a CNG ship from the American Bureau of Shipping. To date no such vessels have been built.

After his meeting with Anastasiades, Fantino said they had talked about “great opportunities” for Cyprus to grow and “the kinds of things that can happen between Canada and Cyprus to create win-win situations”.

“It’s 50 years of Canadian involvement in Cyprus. We are here visiting with ten of our veterans who actually served here over the fifty years of work that Canada has done here,” said Fantino.

Over 25,000 Canadian troops served in UNFICYP since 1964 and 28 lost their lives on the island in that time. Canadian troops were instrumental in defending NicosiaAirport in 1974 and saving it from falling into the hands of Turkish troops.

As part of the events this week, a photo exhibition on the Canadian peacekeeping mission was opened at Famagusta Gate last night while a documentary ‘Our Man in Tehran’ will be shown tonight at the same venue at 8.30pm. It tells the true story of the Canadian Ambassador to Tehran, Ken Taylor, who helped six American diplomats escape during the hostage crisis at the US embassy in Iran in 1980.

Tomorrow there will be a lecture on the Canadian mission in Cyprus at the EuropeanUniversity by historian Dr Greg Donaghy at 6pm.

In 1993 Canada withdrew most of his troops from Cyprus but still retains a small presence at UNFICYP.

The delegation’s visit coincides with the return of one of the last groups of the Canadian armed forces mission to Afghanistan.

“The members of the Canadian Armed Forces in Cyprus left an indelible mark of our troops but also on the history of both Canada and Cyprus,” said Fantino

He said Canada will do everything it could to support the current talks process, which he had discussed with Anastasiades.

“We want to encourage him – and I did actually on behalf of Canada – to continue along that path” Fantino said. “This is the only way to go. I am very pleased to see how committed he [the President] is to this lasting solution that we are all very hopeful it will eventually happen,” he added.

Fashion designer L’Wren Scott, the girlfriend of Rolling Stones singer Mick Jagger, was found dead in her New York apartment on Monday from an apparent suicide, according to a law enforcement official.

Scott, 47, a former model whose timeless style, modern, classic and sexy fashions were favorites among A-List Hollywood stars such as Nicole Kidman, was found hanging from a scarf in her apartment in the morning.

Police confirmed that a female was found “unconscious and unresponsive” in an apartment building on 11th Avenue in Manhattan.

A spokesperson for Jagger said he is “completely shocked and devastated” by the news. The pair have been dating for several years.

Scott, who was raised in Utah, started her career as a fashion model in Paris before becoming a designer. Last year, she announced a deal to design a small collection for Banana Republic stores.

By Aleksandar Vasovic and Adrian Croft

The United States and the European Union imposed sanctions including asset freezes and travel bans on a small group of officials from Russia and Ukraine after Crimea applied to join Russia on Monday following a weekend referendum.

Crimea’s leaders declared a Soviet-style 97-per cent result in favour of seceding from Ukraine in a vote condemned as illegal by Kiev and the West.

The Crimean parliament formally proposed that Russia ”admit the Republic of Crimea as a new subject with the status of a republic”. Russian President Vladimir Putin will address a special joint session of the Russian parliament on the issue on Tuesday, aides said.

The move would dismember Ukraine against its will, escalating the most serious East-West crisis since the end of the Cold War.

Russian forces took control of Crimea in late February following the toppling of Ukrainian president Viktor Yanukovich after deadly clashes between riot police and protestors trying to overturn his decision to spurn a trade and cooperation deal with the EU and seek closer ties with Russia.

US President Barack Obama imposed sanctions on 11 Russians and Ukrainians blamed for the military seizure, including Yanukovich, and Vladislav Surkov and Sergei Glazyev, two aides to Putin.

Putin himself, suspected in the West of trying to resurrect as much as possible of the former Soviet Union under Russian leadership, was not on the blacklist.

Amid fears that Russia might move into eastern Ukraine, Obama warned Moscow at a White House press briefing that what he called further provocations would only increase Russia’s isolation and exact a greater toll on its economy.

“If Russia continues to interfere in Ukraine, we stand ready to impose further sanctions,” he said.

A senior US official said Obama’s order cleared the way to sanction people associated with the arms industry and targets “the personal wealth of cronies” of the Russian leadership.

In Brussels, the EU’s 28 foreign ministers agreed to subject 21 Russian and Ukrainian officials to visa restrictions and asset freezes for their roles in the events.

The EU did not immediately publish the names. Washington and Brussels said more measures could follow in the coming days if Russia does not back down and formally annexes Crimea.

A senior Obama administration official said there was “concrete evidence” that some ballots in theCrimea referendum arrived in some Crimean cities pre-marked.

Russian Deputy Prime Minister Dmitry Rogozin, who was named on the White House sanctions list, suggested that the measures would not affect those without assets abroad.

DISMEMBERING UKRAINE

Obama earlier said Russian forces must end “incursions” into its ex-Soviet neighbour, while Putin renewed his accusation that the new leadership in Kiev, brought to power by an uprising that toppled his elected Ukrainian ally last month, were failing to protect Russian-speakers from violent Ukrainian nationalists.

Moscow responded to Western pressure for an international “contact group” to mediate in the crisis by proposing a “support group” of states. This would push for recognition of the Crimean referendum and urge a new constitution for rump Ukraine that would require it to uphold political and military neutrality.

A complete preliminary count of Sunday’s vote showed that 96.77 per cent of voters opted to join Russia, the chairman of the regional government commission overseeing the referendum, Mikhail Malyshev, announced on television.

Officials said the turnout was 83 per cent. Crimea is home to 2 million people. Members of the ethnic Ukrainian and Muslim Tatar minorities had said they would boycott the poll, held just weeks after Russian forces took control of the peninsula.

Putin’s popularity at home has been boosted by his action on Crimea despite serious risks for a stagnant economy.

Russian shares and the rouble rebounded as investors calculated that Western sanctions would be largely symbolic and would avoid trade or financial measures that would inflict significant economic damage.

However, British Foreign Secretary William Hague said EU countries had begun discussing the need for Europe to reduce its reliance on Russian energy “over many years to come”, much of it shipped through gas pipelines in Ukraine.

Germany, the EU’s biggest economy, gets 40 per cent of its gas from Moscow and could become more dependent as it switches from nuclear power.

In a sign of possible internal debates ahead, euro zone newcomer Latvia said the EU should compensate any countries hurt by sanctions against Russia. The three former Soviet Baltic states, home to Russian-speaking minorities and dependent on Russian energy supplies, could suffer in any retaliation.

MOBILISATION

Moscow defended the takeover of the majority ethnic Russian Crimea by citing a right to protect “peaceful citizens”. Ukraine’s interim government has mobilised troops to defend against an invasion of its eastern mainland, where pro-Russian protesters have been involved in deadly clashes in recent days.

The Ukrainian parliament on Monday endorsed a presidential decree for a partial military mobilisation to call up 40,000 reservists to counter Russia’ military actions. Ukraine recalled its ambassador from Moscow for consultations.

Russia’s lower house of parliament will pass legislation allowing Crimea to join Russia ”in the very near future”, news agency Interfax cited its deputy speaker as saying.

US and European officials say military action is unlikely over Crimea, which Soviet rulers handed to Ukraine 60 years ago.

But the risk of a wider incursion, with Putin calculating the West will not respond as he tries to restore Moscow’s hold over its old Soviet empire, leaves NATO wondering how to help Kiev without igniting a wider conflict.

For now, the West’s main tools appear to be escalating economic sanctions and diplomatic isolation.

Highlighting the stakes, journalist Dmitry Kiselyov, who is close to the Kremlin, stood before an image of a mushroom cloud on his weekly TV show to issue a stark warning. He said: “Russia is the only country in the world that is realistically capable of turning the United States into radioactive ash.”

On Lenin Square in the centre of the Crimean capital Simferopol, a band struck up even before polls closed as the crowd waved Russian flags. Regional premier Sergei Aksyonov, a businessman nicknamed “Goblin” who took power when Russian forces moved in two weeks ago, thanked Moscow for its support.

The regional parliament rubber-stamped a plan to transfer allegiance to Russia on Monday before Aksyonov travels to Moscow, although the timing of any final annexation is in doubt.

Many Tatars, who make up 12 percent of Crimea’s population, boycotted the vote, fearful of a revival of the persecution they suffered for centuries under Moscow’s rule.

“This is my land. This is the land of my ancestors. Who asked me if I want it or not?” said Shevkaye Assanova, a Tatar in her 40s. “I don’t recognise this at all.”

A pressing concern for the governments in Kiev and Moscow is the transfer of control of Ukrainian military bases. Many are surrounded by and under control of Russian forces, even though Moscow denies it has troops in the territory beyond facilities it leases for its important Black Sea Fleet.

Crimea’s parliamentary speaker said on Monday Ukrainian military units in the region would be disbanded, though personnel would be allowed to remain on the Black Sea peninsula, Russian news agency Interfax reported.

Ukraine’s border guard service accused Russian troops of evicting the families of their officers from their apartments in Crimea and mistreating their wives and children.

By Matt Spetalnick

President Barack Obama told Palestinian President Mahmoud Abbas on Monday that it will require tough decisions and risks to achieve peace with Israel and said now is the time for leaders on both sides to “embrace this opportunity.”

In White House talks overshadowed by the Ukraine crisis, Abbas said “time is not on our side” in US-brokered negotiations with Israel and called on Israeli Prime Minister Benjamin Netanyahu to go ahead with the scheduled release of a final group of Palestinian prisoners by the end of March.

Obama, who met Netanyahu two weeks ago, made clear that he was not giving up on the troubled US-led peace process despite widespread pessimism about reaching a “framework” deal that would extend talks beyond an April deadline.

“It’s very hard,” Obama said. “We’re going to have to take some tough political decisions and risks if we’re able to move it forward, and I hope that we can continue to see progress in the coming days and weeks.”

Obama insisted that, after decades of on-off negotiations between Israel and the Palestinians, the likely parameters of any elusive final peace agreement are well known.

“Everybody understands what the outlines of a peace deal would look like, involving a territorial compromise on both sides based on ’67 lines with mutually agreed upon swaps that would ensure that Israel was secure but would also ensure that the Palestinians have a sovereign state,” Obama said.

Abbas agreed that a solution should entail a Palestinian state built on borders that existed before the 1967 Middle East war, though Netanyahu has declared that Israel would never completely return to earlier lines it considered indefensible.

Abbas insisted that the Palestinians, in past international agreements, had already “recognized the state of Israel.”

But he stopped short of reiterating his position on Netanyahu’s demand that Abbas explicitly recognise Israel as a Jewish state if he wanted peace – something the Palestinian president has previously said he will not do.

Looming over the peace effort is the question of whether Israel this month will carry out the release of a final batch of Palestinian prisoners, which it agreed in order restart negotiations last year. US officials fear that if Israel scraps the release the peace talks could break down.

“Mr. President, we have an agreement with Israel that was brokered by Mr. Kerry concerning the release of the fourth batch of prisoners,” Abbas told Obama. “We are hopeful that the fourth batch will be released by the 29th of March because this will give a very solid impression about the seriousness of these efforts to achieve peace.”

Secretary of State John Kerry brought Israel and the Palestinians back into negotiations on July 29 after a three-year gap, and said at the time that “our objective will be to achieve a final status agreement over the course of the next nine months.”

As the April 29 deadline approaches, US officials have scaled back their ambitions, saying they are now trying to forge a non-binding “framework for negotiations” by then. Kerry himself suggested on Feb. 26 a full peace deal could take a further nine months but even that prolonged timeframe faces widespread skepticism.

The two sides do not appear to have made much visible progress on narrowing their gaps on the major issues in the more than six-decade dispute, which include borders, security, the fate of Palestinian refugees and the status of Jerusalem.

“I believe that now is the time for not just the leaders of both sides but also the people of both sides to embrace this opportunity,” Obama said.