By Constantinos Psillides

CITRUS farmers asked the Cyprus government yesterday to separate its position from that of the rest of the EU on the matter of sanctions against Russia, so the country’s ban on imports from EU countries is lifted for Cypriot farmers.

Following a meeting at the commerce and industry ministry aiming at assessing the fallout from Russia’s food embargo on EU member states, representatives from farmers’ unions expressed their worry over the retaliatory move by Moscow.

Russia announced the import ban on EU food products last week in response to the tightened EU sanctions implemented at the end of July against Russia for their involvement in the Ukraine crisis

In 2013 citrus exports to Russia reached €10.7 million. The total export volume that will be affected was around €13.5 million in 2013, including citrus, fish, vegetables, dairy, and fruit.

“This meeting should be done at a political level,” said farmers’ union PEK general secretary Michalis Litras, adding that the EU decision was devastating for Cypriot farmers. “We should have adopted a different stance. In my opinion, we should have abstained from that decision.”

Head of the citrus producers and exporters association George Ioannides said that the sector would suffer heavy losses.

“It’s highly doubtful that any packaging factory will work this year. We will not only lose money now but next year too.

Farmers will abandon their fields and that will be a blow not only to their families but to the Cyprus economy in general.”

EKA general secretary Panikos Hambas told the press that more than 2,500 families would be directly affected by the embargo. Hambas claimed that Cyprus is the first of the EU member states to suffer a heavy financial and social blow from the embargo.

“The biggest loss is that Cyprus will lose its footing in the Russian market, something we have fought long and hard to get and maintain. It will be very hard to get back that market,” said Hambas, adding that the market will be flooded by Turkish Cypriot products that will be relabelled Turkish so they can be exported to Russia.

The meeting at the ministry concluded that Cyprus would seek compensation from the EU for the loss of income stemming from the Russian food ban, along with exploring alternative markets for citrus products.

Hambas dismissed the idea of looking for alternative markets, saying that Cyprus would have to compete with all other citrus farmers and end selling their goods at a much lower price.

“We ask the government to separate its position on the sanctions. We should have nothing to do with such policies.”

Agriculture minister Nicos Kouyialis said on Monday that Cyprus, along with other member states, would seek compensation from the EU on account of the prolonged drought.

Kouyialis had said that an extraordinary meeting of the Agriculture and Fisheries ministerial council has been called to deal with the problem of drought and that the effects of the Russian embargo would also be discussed.

An experts meeting in Brussels today is expected to set up the agenda for the coming meeting. Both Kouyialis and Trade Service Director Nelly Koulia asked the farmers to wait for the conclusion of the experts meeting to decide on further action.

Koulia, who talked to the press after the meeting, said that a comprehensive note would be submitted to all competent ministers, in order to take appropriate action. She added that the issue of compensation would be decided at EU level.

The Trade Service Director did not preclude, however, a chain reaction on other sectors of the economy and said that the issue at stake now was “to minimise the impact”.

POLICE are urging the public to take basic measures to protect their property if they are going on holiday or away for the long weekend.

Spokesman Andreas Angelides said that the police had already intensified patrols in all towns and would continue to do so until the end of the holiday period. They have also launched an information campaign on social media and through the police mobile app, he said.

“Members of the public must secure their property and when a family departs with one of two cars, they should place the key of the other car in a secure place,” Angelides said.

He also said that before they depart from home, people should check all rooms of the house and inform relatives and neighbours of their so that they will keep an eye on the property.

He also said that they should not give details on social media pages for holiday departures, destinations or other information.

Anyone who spots suspicious activity around an empty property should notify police on the 1460 hotline, Angelides said.

With regards to traffic movement over the busy weekend, Angelides said police would be tightening checks on drinking, driving without seats belts, using mobile phone while driving and riding a motorcycle without helmet.

There will be controls both on the highways and on secondary road networks, he added.

“The goal is public safety. We urge everyone to be especially careful, to comply with our instructions and advice and we will be happy if the holiday season ends without any accidents,” Angelides said.

By Elias Hazou

DIKO leader Nicholas Papadopoulos stuck to his guns yesterday, warning that enactment of the foreclosures bill as it stands will cause far greater economic hardship than the interruption of bailout cash from Cyprus’ international creditors.

“The adverse effects if the bill is approved as is will be more severe than non-receipt of the next tranche,” Papadopoulos said on state broadcaster CyBC.

And in an interview with the Cyprus News Agency, the DIKO MP said that mass foreclosures and forced sales of mortgaged properties would drive the country into deeper recession.

“We gain nothing by protecting a family’s primary residence if the same household should lose its family business, its income. It will only be a matter of time before they lose their home as well,” he said.

He was referring to cross-collateralization, where the collateral for one loan is also used as collateral for another loan.

For example, a primary residence under an existing mortgage may be in part used as collateral to take out a loan for a new business.

“If the small to medium enterprises lose ownership of their premises, which create the wealth of the economy, the effects will be far worse compared to any other consequences stemming from (non) compliance with the memorandum,” Papadopoulos said.

The DIKO chief reiterated his party’s demand for a “safety net,” an insolvency framework governing both primary residences and SMEs who are having trouble servicing their debt.

It is a key condition for backing the foreclosures bill. Without DIKO’s endorsement, the legislation has no chance of passing muster in parliament.

DIKO also wants legislation spelling out that mortgaged primary residences worth up to €350,000 are exempted from forced sales in the event the owner has sought recourse with the financial ombudsman.

The financial ombudsman is empowered to mediate between borrowers and banks on issues related to loans collateralised by the borrower’s primary residence, where the borrower is unable to repay and a loan restructuring is required.
Moreover, DIKO proposes modifying the working definition of a non-performing loan.

“Currently, someone owing €1m may be considered as being €1m in debt if he simply fails to pay a €10 fee to the bank from which he has taken out the loan. This is insane,” Papadopoulos said.

“There has to be a minimum, above which a loan is considered non-performing.”

DISY MP Prodromos Prodromou countered that Papadopoulos has its backwards. The effects of not implementing the adjustment programme would be “immense,” he said on the state broadcaster.

The troika of lenders has made it clear that passage of the foreclosures bill within August is a must for the disbursement of the next bailout tranche. The item must pass before euro area finance ministers meet on September 12.

The next scheduled tranche is for €436m and the one after that (in December) will be around €500m, government sources said.

Without the assistance, the government is to all intents and purposes bankrupt.

By Elias Hazou

THE FIRST and instant effect of the foreclosures bill not passing within the deadline specified by Cyprus’ international lenders will be to throw the whole adjustment programme in limbo, returning the country to the brink of bankruptcy, analysts say.

“It’ll put the entire programme in jeopardy, not just the next tranche of assistance, but the ones after that as well…count on it,” economist Mike Spanos told the Mail.

Evdokimos Xenofontos, former deputy chairman at the Bank of Cyprus, concurs.
“This is not scaremongering either,” Xenofontos said.

“It’s common sense. If you fail to live up to an agreement with your lenders, whoever they might be but especially the troika, then why they would they ever consider giving you the next tranche, let alone the tranches after that? In my view, they’ll stop discussing the MoU altogether, until we’ve taken care of our pending obligation, which at this stage is the foreclosures bill.”

The interior minister has said that the government has enough cash to keep operating and pay salaries until November. But what happens beyond that?

Spanos says that it is not just the government that would come to a standstill. Empty state coffers would trigger a chain-reaction throughout an already fragile economy.

“Think of contractors already working on government projects, they’d stop being paid, to give you just one example. The effects would spread like cancer.”

With the debate on the foreclosures bill deadlocked, Spanos says it’s time to think out of the box. He advocates that the government ask the troika to disburse the next bailout tranche (some €400m) come September, but in installments. In return, the administration commits to passing both the foreclosures bill along with the insolvency law by October – just before the state goes bust – thus meeting the opposition parties halfway and overcoming the current impasse.

“I can’t fathom why the government says it can’t bring the insolvency law to parliament for many months to come. I don’t buy it. They could write up an entire constitution by October if they really wanted to.”

In addition to causing fiscal troubles, non-passage of the foreclosures bill could have other knock-on effects, some less clear-cut than others.

But one thing is as sure as night follows day, says Xenofontos: Cyprus can forget about borrowing from international markets once news gets around that it is not implementing its adjustment programme.

“Expect Moody’s and other rating agencies to downgrade us all over again, and then good luck accessing the markets,” he added.

Further, Xenofontos says it might put at risk the €1bn capital issue by the Bank of Cyprus, as the new investors may decide to pull out if it looks like the bank won’t be able to quickly recover non-performing loans on mortgages.

For the moment that is an unknown, as it depends on what explicit guarantees the bank gave prospective investors when it was opening its books. The agreements struck with investors are bound by confidentiality agreements.

And there have been unconfirmed reports in the local media that Wilbur Ross, the US billionaire leading a group that agreed to invest €400 million in BoC, has been strongly urging authorities here to pass the bill.

However Spanos downplays the likelihood of the foreign investors walking away: “No, they’re already committed.”

That aside, a more immediate concern are the upcoming EU-wide stress tests for banks. Unless the foreclosures bill is passed before the tests, the European Banking Authority will have to conclude that a large chunk of non-performing loans are unrecoverable and thus discount their asset value.

Even though an accounting exercise, that in turn would adversely affect Cypriot banks’ balance sheets, making it necessary to raise more capital.

This was a danger alluded to by the Central Bank governor on Tuesday.

As for the possibility of jittery depositors pulling their cash out, fearful of a new haircut should the banks fail the stress tests, both experts think that’s a remote scenario.

“Where are folks going to move their money, abroad?” quipped Xenofontos, referring to the capital controls still in place.

IT IS NOT that we are unaccustomed to the defiant posturing and emotive rhetoric by our politicians and parties but we had hoped that at least on serious matters they would suppress these populist instincts and show a rare sense of responsibility. These hopes were dashed in the last few weeks as political hysteria against the foreclosures bill was whipped up by the opposition parties, posing as the guardians of home-owners and defenders of national sovereignty.

We witnessed similar grandstanding 18 months ago, after the first Eurogroup meeting, which decided to impose a levy on all bank deposits, but the political parties, rejected it and we ended up with a much worse deal, including the haircut of deposits, a week later. Then, as now, the parties took a completely negative stance without any thought about the lack of alternatives – they said they would seek assistance from Russia – or the consequences of their emotional decision.

Exactly the same mistake is being made now. The parties submitted a host of proposed amendments to the foreclosures bill that would make it toothless and the Troika turned them down, rationally explaining its reasons for doing so. This sparked attacks on the government for bowing to the diktats of the lenders, who were behaving as neo-colonialists, instead of defending the interests of the people and our national dignity. As in March 2013, opposition parties are determined to reject the bill and to hell with the consequences.

But what would be the consequences? The next instalment of the loan would not be released. According to the government the state might be able to carry on making payments until November. After November there would be no money, the adjustment programme would have been derailed and the government would not be able to raise a cent in the markets. And what would happen to the banks when they undergo the stress tests in October? Their capital requirements would be much bigger as they would be unable to carry out foreclosures, and finding the required capital would become very difficult. Who would invest in banks that do not have the legal power to recover bad debts? Who will leave their deposits in Cypriot banks?

None of our irresponsible politicians have had the decency to answer these questions so people would know what the rejection of the foreclosures bill would be. DIKO chief and chairman of the House finance committee Nicolas Papadopoulos claimed that the consequences of passing the bill – foreclosures on primary residences and small businesses -would be much worse than the consequences of rejecting it. Conveniently, he has not mentioned what the consequences of rejecting the bill would be so that people would have a clearer picture.

We hope that the parties will eventually come to their senses, put the interests of the country first and act responsibly, because the alternative is too frightening to think about.

By George Psyllides

AFTER a second marathon day of discussions at the House on the stalled foreclosures bill with dire warnings given in public and in private to stubborn deputies, DISY chief Averof Neophytou last night hinted at the possibility of finding common ground.

Speaking after a meeting with the ministers of finance and interior, and the Central Bank Governor, Neophytou said they would work hard to meet the island’s obligations towards international lenders and at the same time protect primary residencies and small businesses.

There was a way to protect social cohesion and vulnerable groups through the insolvency framework and allay the strong objections of opposition parties which threatened to reject the bill on foreclosures, whose approval is necessary for the release of the next bailout tranche.

The government and the Central Bank issued dire warnings yesterday that rejection of the bill would have serious repercussion on banks and the island’s economy.

But Neophytou said he was “cautiously optimistic”. “I welcome the political parties’ constructive stance,” he said on his personal Twitter account.

Neophytou said there were ways to find common ground as he expressed optimism that the goal of averting destabilisation of the adjustment programme should be set above everything else. But at the same time people who need it must be protected, he said.

The DISY chief said everyone was in the same boat and it would take hard work in the next few days to achieve these goals.
It followed the second day of discussion of the controversial foreclosures bill, which opposition parties said they would not approve in its current form.

During the discussion, Finance Minister Harris Georgiades and Central Bank Governor Chrystalla Georghadji warned that rejection of the legislation would have negative repercussions for Cyprus.

“We have demonised some issues. Without a healthy banking system we have no economy. The banks may be blamed for a lot of things but that doesn’t mean that debtors shouldn’t pay their loans,” the CBC Governor said.

The Governor said the value of the mortgaged loans in the upcoming stress tests would be zero if the bill was not passed, meaning Cypriot banks would need more capital.

Georghadji told parliamentarians that out of €52.5 billion in loans, €10 billion had homes as collateral and €4.0 billion of those were non-performing.

The finance minister also warned that if Cyprus` sixth bailout tranche was not disbursed in time, “we will face difficulties and consequences beyond our control and planning.”

Following Georgiades’ statement, Chairman of the Finance Committee and DIKO leader Nicolas Papadopoulos asked the guests and the media to leave the room and the discussion continued behind closed doors.

It is understood that during this time Georgiades gave more details to MPs about the potential repercussions of a rejection.

In his comments after the meeting, Papadopoulos said there must be a protective net for primary residences and small businesses which could not meet their loan obligations.

“We will not win anything if we protect the home of a family if the family loses its business,” Papadopoulos said. “It would just be a matter of time before it loses its home.”

The government’s erstwhile partner said the insolvency framework could act as a safety net for businesses and homes.
MPs heard earlier that the law on the financial ombudsman provides that the foreclosure procedure cannot proceed without mediation if a €350,000 loan has a primary residence as collateral.

Papadopoulos said this provision could be included in the foreclosures bill or at least strengthened to prevent repossession as long as the mediation was in progress.

He did insist that the consequences of people losing their homes would be worse than those relating to compliance with the bailout adjustment programme.

“We want to find ways to prevent mass foreclosures,” he said.

Papadopoulos said it was now up to the government to decide on how to proceed.

Part of the solution could be a bill to put an end to bank practices such as the unilateral increase of interest rates and forcing borrowers to accept them.

Georghadji told MPs the Central Bank was working on a bill regarding the banks’ unfair terms.

By Andreas Vou

Ermis have won the first piece of silverware of the 2014-15 season in the most dramatic fashion on Wednesday night after defeating APOEL 2-1 in the Super Cup, thanks to a 95th minute free-kick from Giannis Taralidis just minutes after the Nicosia club had levelled the match.

The traditional season opener is considered a friendly but the Aradippou side will be elated with their fine display over last year’s double-winners and will be equally delighted to get revenge over the side that beat them in the Cyprus Cup Final at the end of the last campaign.

APOEL manager Giorgos Donis made just one change to the side which beat HJK Helsinki 2-0 last Wednesday with Giorgos Efrem, a new summer signing from Omonia, coming in for Constantinos Charalambides.

Ermis also made just the single change from their European encounter against Young Boys, with Spanish forward Luis Moran taking the place of Paulinho.

The two sides had previously met on four occasions in 2014 with APOEL winning three of them.
However, no sooner than the referee had blown the whistle for the beginning of the match, it was Ermis who found themselves 1-0 ahead. One of the club’s 14 summer signings, Brazilian forward Belusso broke through a sleeping APOEL defence to give his side a shock lead.

With APOEL’s Champions League play-off tie just seven days away, many felt that the European game could be a distraction, and it seemed to be the case.

Donis’ side were slow in picking themselves up after the early goal conceded and it was Ermis who looked more likely to get a second.
In APOEL’s previous six official matches, Cillian Sheridan and Tomas de Vincenti had scored twelve goals between them, with the Irishman having scored five and the Argentine seven. Their best chance of the half fell to de Vincenti on 40 minutes but, uncharacteristically, the playmaker failed to put away a one-on-one goal-scoring opportunity, sending an effort high and wide of the mark.

In the second half, it was Ermis again who came bursting out of the traps. Moran came within a whisker away of vindicating his manager’s decision to start him but his volley grazed the post.

APOEL responded well and on 50 minutes conjured up another golden chance, this time falling to Vinicius – the Brazilian midfielder’s effort, however, went just shy of the woodwork.

Try as they might, the champions simply could not muster any sustained pressure on Martin Bogatinov’s goal and it looked like Ermis would hold on for a well-earned victory but, on 92 minutes, Dragan Zarkovic put the ball in his own net from a Stathis Aloneftis corner.
However, the drama was not over. With the game set for penalties, Ermis earned a free-kick. Up stepped Taralidis who struck the ball beyond the reach of Tassos Kissas for an epic finish to an incredible match, handing Ermis victory in their first ever Super Cup appearance.

A 30-YEAR-OLD man from Congo, arrested for allegedly threatening to blow up mosques, and his 27-year-old flatmate from Senegal, were remanded for eight days pn Wednesday by the Limassol court.

According to Sigmalive, the 30-year-old who has a French passport, was reported to the police by the mufti of the mosque in the Ayios Antonios area in Limassol on Tuesday when he reportedly threatened to blow up all the mosques in Cyprus.

The suspect allegedly issued the threat when the mufti asked him what he was doing wandering around his mosque. The suspect was later located by police at his house and he and his roommate were arrested.

“Some information concerning issues of terrorism are being investigated, but so far nothing is confirmed and investigations continue,” Police spokesman Andreas Angelides said. Reportedly Interpol was also notified.

THE fiscal deficit was reduced by €198m in the second quarter of 2014 compared with the same period in 2013, mainly as a result of a significant decrease of expenditure on civil servants compensation and a decrease in social benefits.

According to data released by the statistical service, on the basis of the preliminary data on the General Government accounts for the period April-June 2014, total revenue amounted to €1612.2m – a 1.0 per cent increase compared to the corresponding period of 2013 – while total expenditure reached €1623.8m, – a 10.1 per cent decrease – resulting in a deficit of €11.6m compared to €209.5m in the corresponding period of the previous year.

The main categories of revenue for the period April-June 2014 were: taxes on production and imports €579.8m – a 17.2 per cent decrease – of which VAT was €335.4m (a 18.5 per cent decrease), taxes on income and wealth €302.9m – a 17.4 per cent decrease.

Revenue from sales of goods and services increased by 7.0 per cent compared to the corresponding period of the previous year reaching €99.6m.

During the period April-June 2014, revenue from dividends amounted to €181.4m compared to €89.4m received during 2013 and recorded in the period January-March 2013.
The main categories of expenditure for the period April-June 2014 were: compensation of employees – including imputed social contributions and pensions of civil servants – €527.3m – a 9.4 per cent decrease – and social transfers €669.3m – an 11.5 per cent decrease. Current transfers reached €78.1m, a 17.3 per cent decrease.
 

THERE cannot be a solution to the Cyprus problem without the return of occupied Morphou, and the President will not go along with such a solution, Deputy Government Spokesman Victoras Papadopoulos has said.

Papadopoulos on Wednesday received a delegation from Morphou municipality headed by the Mayor Charalambos Pittas, who handed over a petition on the occasion of 40 years since the town was occupied during the second wave of the Turkish invasion, marked today.

The Acting Government Spokesman said that President Nicos Anastasiades` two main priorities since he assumed office were the solution of the Cyprus problem and exiting the economic crisis.

The petition was handed to the embassies of the five permanent members of the UN Security Council, which are asked to work towards a solution and exert pressure on Turkey.

Pittas also said that the Cyprus problem was at a very critical point and near an impasse. If the Turkish side did not change its stance at the talks, there could be no settlement, he said.

He said the Turkish side had made a mockery out of the negotiations process, “by ignoring all of the President’s suggestions and insisting on not showing any sign of goodwill or compromise, even on the minor issues.”

Earlier Papadopoulos received a delegation from occupied Pyroi headed by the president of the community council Constantinos Adamou. The delegation handed a petition with their demands, mainly the opening of a crossing point near their village.

Papadopoulos said that Anastasiades had put forward at the negotiating table the opening of a crossing point near Pyroi as a confidence building measure and he was fighting hard for the just demand to be met. “However the Turkish side is intransigent,” he said.

By George Psyllides

CLOSE to 300 old Bank of Cyprus shareholders have filed a request seeking a court order preventing a share capital increase before the “real” value of their shares was restored.

Numbering approximately 88,000, the bank’s old shareholders saw their shares’ value diminished to 1.0 per cent in March 2013 when the bank was restructured following a conversion of 47.5 per cent of uninsured deposits into equity, the absorption of failed Laiki bank and the selling off of the bank’s Greek operations to Piraeus bank.

The 285 shareholders want an injunction banning the increase in share capital before the value of their stock was restored to the level of March 15, 2013 or else suspend an extraordinary general meeting scheduled for the end of the month.

The shareholders also filed a lawsuit against the lender, the state, the Central Bank, and Laiki’s administrator

They want a court statement saying the composition of the shareholding is wrong due to the wrong calculations.

The court ordered the Bank of Cyprus, Laiki, and the administrator, to submit their objections by August 20 and scheduled a hearing two days later.

The move was expected after it had been announced at the end of July.

The EGM at the end of the month was called to approve a capital increase of about €1 billion pledged by foreign investors and the European Bank of Reconstruction and Development.

In an issuer comment, Moody’s ratings agency had said the bank’s successful completion of the first phase of its €1bn capital increase “is credit positive because it will improve the bank’s liquidity and funding position, strengthen depositor confidence and potentially open other funding options.”

Moody’s said the additional capital would help BoC pass the EBA stress tests and withstand losses stemming from the high level of NPLs, which hovered around 55 per cent

Meanwhile the bank’s dependence on Emergency Liquidity Assistance (ELA) recorded a further decrease to €8.68 billion in July from €8.78 billion the previous month, according to figures released by the Central Bank. In May, ELA amounted to €9.23 billion whereas in April it was €9.4 billion.

By Constantinos Psillides

CYPRUS has put in a request to the EU for the Agriculture and Fisheries ministerial council to convene and assess the situation in Europe following the Russian food embargo, according to government spokesman Nicos Christodoulides.

Christodoulides issued a statement yesterday explaining that Cyprus was requesting of the ministerial council to examine the negative effects the embargo has on EU member-states.

“The EU is called upon to assess the effects the embargo had on each country individually, while at the same time taking into consideration any special circumstances,” read Christodoulides statement.

An extraordinary meeting of the Agriculture and Fisheries council has already been called at the request of Austria, to study the effects of drought on an EU level.

Other countries have also publicly expressed interested in seeing the EU deal with the Russian embargo, including Greece and France.

While citrus farmers in Cyprus – who were the ones most affected by the embargo, to the tune of  €10.7 million – requested on Tuesday that Cyprus separate its position from that of the rest of the EU and seek exemption from the embargo, the government is more likely to try and secure compensation.

Russia announced the import ban on EU food products last week in response to the tightened EU sanctions implemented at the end of July against Russia for their involvement in the Ukraine crisis.

A meeting called on Tuesday at the request of Agriculture minister Nicos Kouyialis concluded that besides seeking compensation from the EU, Cyprus would also look into alternative markets.

Farmers unions stand behind the government’s attempt at securing compensation for both the drought and the embargo but dismiss the idea of looking into alternative markets. Union representatives from PEK, EKA, and the producers union argued that they would have to sell at very low prices, warning that more than 2,500 families would be affected if the situation drags on.

By Constantinos Psillides

MEMORIALS will be held in both Cyprus and Greece today to mark nine years since the Helios plane crash just north of Athens killed 121 passengers and crew en route to Prague.

Around 100 relatives of those who died are already heading for Greece to attend the memorial service at Grammatiko, the hillside where the plane went down and where a small chapel has been built. In Cyprus, the memorial will be held at the church of Ayia Paraskevi in Mosfiloti in the Larnaca district

The Helios crash on August 14, 2005 was the worst air disaster in Cyprus’ history in which 107 of the victims including four crew members were Cypriots while 12 plus one crew member were Greek, and the captain, Hans-Jürgen Merten, 58,  a German national. His first officer was Cypriot Pambos Charalambous, 51.

Helios Airways flight ZU522 took off from Larnaca Airport at 9.07am for a weekly scheduled flight to Prague, via Athens.

Also on board was stewardess Charis Charalambous, a 25-year old speech-therapist who had studied in the Czech Republic and found employment with Helios, and steward Andreas Prodromou, Charalambous’ boyfriend who had changed his schedule to spend some time with her. Prodromou was also training to be a pilot.

Unknown to the flight crew, the aircraft had undergone an inspection the night before because the previous flight crew reported a frozen door seal. The ground engineer who carried out the inspection had to perform a pressurisation leak check as per standard procedure; to complete the check he had to turn the pressurisation system from “AUTO” to “MANUAL” but neglected to reset it.

The mistake should have come up during the three flight checks, but according to the accident’s report findings “pilots failed to recognise that the cabin pressurisation mode selector was in the MAN (manual) position during the performance of the pre-flight procedure, the before-start and the after take-off checklists.”

As the plane climbed to cruising altitude, the cabin altitude warning siren sounded but the pilots mistook the warning sign as the one that signals that the plane was not ready for take off.

As per standard procedure, whenever a warning sign goes off in the cabin pilots are required to immediately stop the climb and bring the plane to a breathing altitude and then identify the problem. Having mistaken the pressure horn for a minor problem, the pilots continue ascending to cruising altitude while at the same time trying to figure out what the problem was. With the cabin not properly pressurising, it wasn’t long until hypoxia set in and the crew effectively lost control of the plane.

When oxygen masks in the cabin deployed and other warning signs begun flashing, the flight crew contacted Larnaca Air Traffic Control (ATC) to report the problem. Their speech was erratic, as they were experiencing the early onset of oxygen deprivation.

After a short talk the flight crew stopped responding despite repeated attempts by the Larnaca ATC.

The plane continued to climb to its cruising altitude and finally levelled at 34,000 feet. Larnaca ATC kept on trying to get in contact with the pilots but to no avail. When the plane entered Greek FIR Athens ATC also tried to established contact but likewise failed.

Faced with the very visible danger of a renegade plane heading towards a heavily populated area, the Greek Armed Forces scrambled two F-16 fighter jets from the Nea Anchialos Air Base to establish visual contact. The jets intercepted the plane at 1124am and reported the captain’s seat was empty, the first officer motionless over the controls and the oxygen masks deployed in the cabin.

While flying alongside the plane, the pilots saw a man entering the cockpit at 11.49am and sitting on the captain’s chair. The man, later identified as the steward Prodromou, reportedly tried to take over the plane but was lacking the necessary qualifications. The trainee pilot sent out two mayday signals at 11.54am which were received by the Larnaca ATC since the frequency wasn’t changed.

Jet pilots reported that Prodromou was using one of the portable oxygen cylinders found in the front of the plane to remain conscious. Since he was stationed in the back galley, investigators assumed that he used passenger oxygen masks to get there.

At 11.50am the left engine stopped working – investigators presumed fuel starvation- and was followed by the right engine at 12 noon. At 12.04pm the plane crashed. There were no survivors.

News of the crash stunned Cyprus. Relatives of the victims demanded that the airline owners were brought to justice, as they felt they were responsible for the accident since reports emerged claiming that Helios employees were overworked and fault reports were overlooked.

Subsequent investigations concluded that human error was the main cause of the accident as both pilots reportedly failed to carry out routine checks that would have identified the problem beforehand.

Not being satisfied with the investigations and acting under the weight of public outcry, the Attorney- general asked that four Helios officials – former chief pilot Ianko Stoimenov, chairman of the board Andreas Drakos, chief executive officer Demetris Pantazis, and operations manager Giorgos Kikidis- were brought up on 119 charges of manslaughter and death by negligence. The four were acquitted of all charges in December 2011, after the court concluded that there was no causal association between the four of them and the causes of the accident.

Shortly after the trial in Cyprus, a trial in Greece started since the plane crashed on Greek soil. Demetris Pantazis, Giorgos Kikkides, Ianko Stoimenov and chief engineer Alan Irwin were charged with manslaughter and were finally found guilty in April 2012, and sentenced to 10 years of imprisonment. They appealed the verdict but lost the case before the Greek Supreme Court. Under Greek law, the defendants were given the option of buying out their sentences, which lead to each one of them paying €75,000 in August 2013 to be set free.

By George Psyllides

THE finance ministry is trying to prepare legislation to complement a controversial bill on foreclosures in a bid to succeed in getting it approved by parliament where it is opposed by the majority of parties.

Opposition parties, including former government partner DIKO, said they would reject the bill in its current form but a glimmer of hope appeared on Tuesday, the second day of discussions in parliament.

“It transpired that there can be common ground and it remains for the government to bring this additional legislation to allay certain concerns,” the Cyprus News Agency said, quoting an unspecified source.

The government will now try to prepare bills on the operation of the insolvency councillor together with provisions to protect homes up to €350,000 pending the financial ombudsman’s mediation.

The ministry is also expected to legislate on the Central Bank code concerning delays.

Some sort of agreement appears to exist over the bills, especially between ruling DISY and DIKO, the source said.

The Central Bank is also in the final stages of preparing a bill regarding the terms contained in loan contracts. DISY was also preparing a proposal, which will limit interest on arrears imposed by banks, and unilateral rate increases on loans.

On Tuesday, both the Central Bank governor and the finance minister warned MPs of the dire effects the rejection of the bill would have, on banks and the economy.
The governor said the value of the mortgaged loans in the upcoming stress tests would be zero if the bill was not passed, meaning Cypriot banks would need more capital.

Approval of the bill is necessary for the release of the next tranche of bailout funds.

The bills would have to be approved by international lenders who are not expected to raise any objections if the philosophy of the foreclosures bill remained unchanged.

The bill basically expedites repossession of a mortgaged property, which under the current system could take a decade or more.

It provides for private auctions conducted by creditors instead of the land registry, the main reason for the delays.

Opposition parties warned of mass foreclosures and initially rejected the bill but DIKO at least appears to have been persuaded on condition that the government includes more safeguards for primary residences.

PUBLIC sector doctors are threatening to take dynamic measures in protest against plans to extend retirement age to 68. In an announcement issued yesterday by their union PASYKI they complained that the decision “violated labour practices as there had been no social dialogue or exchange of views.” If the extension was implemented without any dialogue and without solving the problems faced by the profession, there would be “an immediate response, including dynamic measures,” the union warned.

What is peculiar is that not all the state hospital doctors are opposed to this move. According to a statement issued yesterday by AKEL – party of conservatism and reaction, when it comes to public sector privileges – the measure was aimed at satisfying a group of highly-paid doctors, whom, presumably wanted to stay in their jobs for longer. Such decisions could not be taken without dialogue between the social partners, argued the party, repeating its mantra about consensus.

However, the party made one valid point – this was an ‘isolated’ measure. But this is how government policy is forged in Cyprus. When there is an interest group that has close ties with the government and the parties, it arranges for the law to be changed to suit its members’ needs – in this case the doctors at the top of the wage scales who are approaching retirement age. They want to keep on working so the government extends the retirement age for all government doctors. It is unbelievable, but this is how government policy is forged.

The extension of retirement age must be considered by the government but it should apply to everyone. There are strong grounds for extending the retirement age for everyone. Life expectancy has increased significantly in the last 50 years, as people have much more comfortable lives – they are fit and healthy well into their sixties. The fact that people live for longer means that state pension funds are coming under significant strain – this is an EU-wide problem – and reforms are necessary. In order to deal with the problem, the UK government decided workers would contribute more towards their pension and receive less when they retired. Germany was considering extending the retirement age.

Cyprus also needs to see the state pension issue as a whole rather than deal with a small section of the public sector that was demanding the extension of the retirement age. This is an opportunity to reform the pension system in a way that would make it sustainable for a few more decades. It should also be made fairer. Public employees should contribute as much as the rest of the workers to the social insurance fund every month and pensions should be based on contributions; teachers must stop receiving double pensions; retirement bonuses must also be based on workers’ contributions.

This is what the government must tackle, instead of extending the retirement age of state doctors, because a group of them had demanded it.

By Constantinos Psillides

PRIME Minister David Cameron cut short his holiday and returned home yesterday to chair a meeting to decide on Britain’s more active response to the Iraq crisis, sending four Chinook helicopters to the base in Akrotiri following Tuesday’s arrival of three Tornado jets.

The fighter aircraft have been tasked with providing intelligence by flying over the crisis area to facilitate the delivery of UK aid to the Yazidi people, driven into the Sinjar mountain range in their attempt to flee Islamic State (IS) fighters who have told them to “convert or die”.

Two Royal Air Force C-130 Hercules military transport aircraft were being used to carry out the humanitarian drops. But the arrival in Cyprus of the four Chinooks, which can hold up to 70 people, has given rise to speculation that an evacuation was imminent.

According to UK press reports, Cameron said that “detailed plans were being put in place” for an international mission to rescue the stranded Yazidis and that Britain “will play a role in delivering it”.

The Prime Minister spoke after returning from his family holiday to chair a meeting of the government’s Cobra emergency committee to discuss the crisis.

But he insisted the UK involvement remained a humanitarian mission as he faced calls to directly arm Kurdish forces or join the US in air strikes against IS fighters.

Several MPs in London have called on Cameron to recall parliament from its summer recess to discuss Iraq, while at least two former senior military figures have said Britain should follow the US lead and intervene militarily against Islamist fighters there on humanitarian grounds.

Cameron dismissed demands for parliament to be recalled, saying it was unnecessary at this stage but would be kept under review.

“We need a plan to get these people off that mountain and get them to a place of safety. I can confirm that detailed plans are now being put in place and are underway and that Britain will play a role in delivering them.”

The PM declined to give any details of the mission – such as whether Chinook helicopters being sent to the region could play a role in any evacuation.

Until now the UK has been focusing on providing aid to the thousands of people belonging to the Yazidi religious sect who are fleeing their homes in their thousands.

International Development Secretary Justine Greening issued a statement yesterday confirming a third round of UK aid drops, including shelter.

“As thousands of Iraqi people remain cut off away from their homes, we are focused on getting help to those in need, particularly those trapped on Mount Sinjar. After last night, the RAF have successfully made five drops, including thousands of containers filled with clean water that can also be used to purify dirty water and hundreds of shelter kits,” said Greening.

The UN Refugee Agency said about 35,000 people had escaped from the mountains into Syria and then into the Kurdistan region of Iraq in the past three days.

An estimated 20,000 to 30,000 Yazidis remained trapped without food, water or shelter, according to the UN that estimated that 700,000 Yazidis had been displaced.

In a statement, Downing Street said “urgent planning to get those trapped on the mountainside to safety would continue in the coming days between ourselves and the US, the Kurdish authorities and other partners.”

The British press reported, however, that it was likely the Tornado jets would be armed and that Downing Street also confirmed the Chinooks would also carry military equipment donated by other countries to the Kurds.

European Union foreign ministers are to meet tomorrow to discuss the crisis in Iraq as well as the latest developments in Ukraine, the EU’s foreign affairs chief Catherine Ashton’s office announced yesterday.

POLICE are asking the public for assistance in locating a Filipino national who has been reported missing since late July. Nida Ongotan Trinidad, working as a housemaid in Limassol, was reported missing by her employer.

She had gone on leave on July 31 and was supposed to return on August 11, but never returned.

She is described as 1.60m tall, thinly built and with black hair. Anyone with information on her possible whereabouts is asked to contact Limassol CID, their nearest police station or the hotline by dialing 1460.

By Constantinos Psillides

POLICE chief Zacharias Chrystomou is determined to clamp down on crooked cops by having them kicked off the force or transferred to non-essential posts, reports said yesterday.

A senior police officer confirmed to the Cyprus Mail, on condition of anonymity, that a meeting had indeed taken place, as reported by the daily Politis which said that Chrysostomou demanded of his higher ranking officers that they deal with the bad fruits within their ranks.

The chief was reportedly furious at the extent of corruption within the police force, giving his subordinates 15 days to compile a list of officers who exhibit a “problematic work ethic” so they could be demoted to non crucial posts.

Chrysostomou pointed out that officers working together with organised crime units often tip-off the owners of establishments the police plan to raid, so the search yields nothing in the end. Worst of all, he reportedly remarked, patrons of those establishments mock the raiding police officers.

The police chief considers corrupt members as undermining the work of the other members of the force and told those present at the meeting that he is determined to root them out. Chrysostomou asked that if any evidence shows up against a police officer that he or she will be dismissed immediately.

Ever since Chrysostomou took charge on March 29, he placed combating corruption at the top of his priorities.

“Zero tolerance to corruption and abuse of power,” the police chief had said, as he took the oath of office during an official ceremony at the presidential palace.

Chrysostomou reiterated his resolve at dealing with corruption within the police at a June press conference on the force’s goals for the coming year. He once again made public statements that he will be implementing a zero tolerance policy, making it his first priority and promising that wherever any evidence arises against a police officer, that he or she will be dealt with accordingly.

By Staff Reporter

AGRICULTURAL officials from all 28 European Union countries held emergency talks on Thursday and agreed to introduce measures early next week to help farmers whose perishable fruit and vegetable produce have been hurt most by Russia’s counter-measures to western sanctions against Moscow.

All experts at the meeting called for the €420m EU emergency fund to be released in order to balance the impact of Russia’s ban on Western food imports and to compensate EU farmers.

Commissioner Dacian Cioloș, who chaired the meeting in Brussels, said that “as of early next week, I will come forward with the next market stabilisation measure, targeting a number of perishable fruit and vegetable products which are now clearly in difficulty. This action will be proportionate and cost effective.”

He added that this “exceptional situation” as a result of Russia’s ban requires faster and better access to market data, sector by sector.

“That is why we are putting in place as of today a reinforced market monitoring mechanism to which all member states will contribute. Meetings with member states will take place on a weekly basis, for a period as long as necessary,” he said.

The Commissioner added that he was prepared to propose EU wide measures as and when needed.

“Producers from across the EU can be reassured. We are following every sector and every market and as material risks emerge, I will act. Through the reformed Common Agriculture Policy we have the budgetary and legal instruments for European action together with the member states; market confidence through European solidarity is the overriding objective.”

The meeting also looked into potential alternative sales outlets, as well as a preliminary analysis of the main sectors worst affected by the Russian measures – fruit, vegetables, dairy and meat products.

The experts admitted that the situation is the most urgent for certain perishable vegetables hit by the ban, where the season has already begun and a key export market has suddenly disappeared with no immediate prospect of an obvious alternative.

Further measures targeting animal products are being considered, in the same way that it announced support measures for the peaches and nectarines sector on Monday. Support for that sector, primarily affecting Italy, Spain, France and Greece, consists of increasing the amount of fruit that can be withdrawn from the market to 10 per cent from 5 per cent. The producers will be compensated – by some €20-30m in total – for the withdrawn fruit, which is given away to institutions such as hospitals, schools and prisons.

Russia announced last week a one-year embargo on meat, fish, dairy, fruit and vegetables from the United States, the EU, Canada, Australia and Norway in retaliation for Western economic sanctions over Moscow’s actions in Ukraine.

In all, EU farm exports to Russia are worth €11bn a year, roughly 10 per cent of all EU agricultural sales.

The biggest impact for Cyprus is the citrus fruit, with this sector accounting for about €10.7m in exports to Russia alone, with a further €2.3m in other fruit and vegetables, and meat products.

Poland is suffering from the loss of its biggest apple buyer, and France, the bloc’s leading agricultural economy, is nervous the hundreds of thousands of Polish apples Russia does not import will drive down the value of French produce.

EU agriculture ministers are also expected to review the situation further at an extraordinary meeting in early September as a follow up to Thursday’s meeting of agriculture experts.

Meanwhile, Finland’s president is to meet his Russian counterpart Vladimir Putin in the Black Sea resort of Sochi on Friday, but both governments played down prospects for any breakthrough in the crisis over Ukraine.

Finland is one of the EU states hardest hit by trade embargoes that Moscow has imposed in retaliation for EU sanctions, yet it does not want to be seen as a weak link in the European front to pressure Putin over Ukraine.

Russia is Finland’s third-biggest export market. Finnish companies are major suppliers of milk and other dairy products to Russian supermarkets.

A survey showed almost half of Finland’s companies have been hurt by the sanctions Russia and the EU have imposed on each other.

By Elias Hazou

THE Department of Antiquities has announced the completion of the 2014 excavation season of the Kourion Urban Space project (KUSP) under the direction of Dr. Thomas W. Davis of the Tandy Institute for Archaeology at Southwestern Baptist Theological Seminary in Fort Worth, Texas.
This year’s excavations uncovered the remains of more victims of the massive earthquake that destroyed Kourion in the fourth century AD. According to an official announcement, initial analysis indicates the remains consist of two adults, a juvenile, and an infant.

The family was found huddled together; the infant was found under the right arm of one of the adults.The bones were badly crushed and, in some instances, located directly under collapsed architectural stones.
The house was rich in material cultural remains. Fragments of a large imported glass plate were found around and under portions of the earthquake tumble.
The plate was manufactured from bundles of hollow yellow glass canes which were fused together in a dark green matrix. These plates are made in Egypt, and are usually found in Coptic cemeteries. The Kourion plate provides what may be the best dated example in the world, the Antiquities Department said.

KUSP has completed the third season of a long-term archaeological investigation at the site of Kourion in the Limassol district.

KUSP partners include the Australian Institute of Archaeology, the University of Cyprus, the Cyprus Technical University and the Western Sovereign Base Area Archaeology Society.

Kourion was recorded by numerous ancient authors including Ptolemy, Stephanus of Byzantium, Hierocles and Pliny the Elder. The city has passed through different phases spanning the Hellenistic, Roman and Christian periods.