By George Psyllides

INTERNATIONAL lenders will release the next tranche of financial assistance only once Cyprus puts in place an effective foreclosures framework in line with the terms of its bailout agreement, a senior EU official said on Monday.

“Putting these legal provisions in place … is of course essential to make progress with the high level of non performing loans (NPLs) in Cyprus, including large corporate loans, and to return Cyprus to financial health,” Eurogroup President Jeroen Dijsselbloem told a news conference.

The European official was referring to four bills passed by opposition parties that limit the scope of a foreclosures bill aimed at tackling rising NPLs – a prerequisite for the disbursement of the next tranche of financial assistance worth close to €500 million.

President Nicos Anastasiades has referred the bills to the Supreme Court, which will rule on their legitimacy later this month.

Rejection of the bills by the Supreme Court would open the way for the assistance and get the island’s bailout obligations back on track.

Cyprus has passed four previous reviews with flying colours but the matter is set to delay completion of the fifth.

Dijsselbloem said an effective framework for private debt restructuring “remains an important pending issue that prevents the conclusion of the review”.

The remainder of the process will be handled by the Eurogroup working group.

State broadcaster CyBC quoted Finance Minister Harris Georgiades as saying that the economy could go on for a few more months without the tranche.

Speaking in Washington DC where he attended the International Monetary Fund summit over the weekend, Georgiades said his interlocutors fully understood that it was inevitable to have some delay and political difficulty in implementing such a demanding reform programme.

“Without this meaning that financing could go on without resolving the problem,” Georgiades said.

“But I emphasised that it did not affect the implementation of the programme in general, or the gradual improvement of the economy,” he added.

The minister reiterated that Cyprus could stop relying on troika financing earlier than expected.

“I consider the objective fully feasible,” he said. “From the moment that Cyprus has succeeded in returning to the international markets and all basic indicators, like public debt, and public deficit, exceed the targets, and credibility is restored.”
However, Georgiades emphasised that the effort for reform and consolidation would not stop prematurely.

“On the contrary, the fact that we have the first concrete results, with the recession ending gradually and unemployment falling for the first time in years, it should give us the confidence to continue,” he said.

By Andreas Vou

CYPRUS slumped to a 2-1 defeat at the hands of Wales on Monday night in Cardiff, their second loss in four days by the same scoreline.

An opening group game win away to Bosnia and Herzegovina had given Cyprus a real hope of achieving something special in this qualifying campaign. A defeat against Israel on Friday in Nicosia, however, meant that a win was of the upmost importance on their trip to the Wales.

Pambos Christodoulou’s side got off to a poor start as Wales took an early through David Cotterill. The winger’s cross caused confusion in the Cypriot back line and ended up in the corner of the net after 13 minutes.

Wales soon went 2-0 ahead with a rapid breakaway; Gareth Bale’s brilliant first-time flick played Hal Robson-Kanu through on goal, who finished neatly beyond Tasos Kissas.

The game looked beyond Cyprus’ reach but, on 36 minutes, they were back in it. In a very similar fashion to which Wales went 1-0 up, Vincent Laban’s inswinging cross from a free-kick caused a mix-up in the Welsh defence and went past the despairing Wayne Hennessey.

Cyprus’ chances increased just after the break as Andy King received a red card for a tackle from behind on Constantinos Makrides.

Wales sat back for the majority of the second period as Cyprus tried valiantly to grab an equaliser – APOEL winger Giorgos Efrem came closest to levelling the game but his two headed efforts sailed wide and high respectively as the home side held on for a narrow win.

The result leaves both sides as they began the evening, with Wales top of Group B and Cyprus in fourth position. Cyprus’ next international game is on November 16 at home to Andorra in what is a must-win game if the national team is to have any hope of making at least the play-offs.

A gun-slinging Alaska wildlife manager chased off a massive polar bear that broke into an 81-year-old’s house in a remote community to feast on a drum of seal oil, the Alaska Dispatch News reported.
Armed with a 12-gauge shotgun and non-lethal firecracker slugs, officer Ruby Kaleak rushed with a partner to a home where a petrified resident reported a polar bear break-in on Friday, the newspaper said on Monday.
While scanning the property, Kaleak suddenly saw the bear pop up, filling the entryway door-frame of Betty Brower’s home in Kaktovik, a 300-resident community in the North Slope Borough. The 81-year-old was home alone and hiding under a large window from where she managed to radio for help.
“I was shocked. It was humongous… Just the neck and head was half the size of me, and I’m 5 (feet) 2 (inches) (1.57 cm),” Kaleak told the paper after the encounter. “My mind was going in circles at the time.”
She and her fellow wildlife manager were able to chase the bear away from the house and no one was injured, according to the report.
Neither Kaleak nor state wildlife or village officials could immediately be reached for comment.
Bears in the area are drawn to the village for hunters’ leftover whale parts and often smell food in arctic entryway porches used by some residents to store food.
Kaleak told the newspaper she has never had to fire a deadly slug at bears advancing on people. The bears seem unafraid of vehicles but when she jumps out of her truck they scurry off.
“I tell them: Yep, you better run!'” Kaleak said, according to the newspaper.

By Humeyra Pamuk and Daren Butler
AMERICAN-led forces sharply intensified air strikes against Islamic State fighters threatening Kurds on Syria’s Turkish border on Monday and Tuesday after the jihadists’ advance began to destabilise Turkey.
The coalition had conducted 21 attacks on the militants near the Syrian Kurdish town of Kobani over the past two days and appeared to have slowed Islamic State advances there, the US military said, but cautioned that the situation remained fluid.
War on the militants in Syria is threatening to unravel a delicate peace in neighbouring Turkey where Kurds are furious with Ankara over its refusal to help protect their kin in Syria.
The plight of the Syrian Kurds in Kobani provoked riots among Turkey’s 15 million Kurds last week in which at least 35 people were killed.
Turkish warplanes were reported to have attacked Kurdish rebel targets in southeast Turkey after the army said it had been attacked by the banned PKK Kurdish militant group, risking reigniting a three-decade conflict that killed 40,000 people before a cease-fire was declared two years ago.
Kurds inside Kobani said the US-led strikes on Islamic State had helped, but that the militants, who have besieged the town for weeks, were still on the attack.
“Today there were air strikes throughout the day, which is a first. And sometimes we saw one plane carrying out two strikes, dropping two bombs at a time,” said Abdulrahman Gok, a journalist with a local Kurdish paper who is inside the town.
“The strikes are still continuing,” he said by telephone, as an explosion sounded in the background.
“In the afternoon, Islamic State intensified its shelling of the town,” he said. “The fact that they’re not conducting face-to-face, close distance fight but instead shelling the town from afar is evidence that they have been pushed back a bit.”
Asya Abdullah, co-chair of the dominant Kurdish political party in Syria, PYD, said the latest air strikes had been “extremely helpful”. “They are hitting Islamic State targets hard and because of those strikes we were able to push back a little. They are still shelling the city centre.”
It was the largest number of air strikes on Kobani since the US-led campaign in Syria began last month, the Pentagon said. The White House said the impact was constrained by the absence of forces on the ground but that evidence so far showed its strategy was succeeding.
The Turkish Kurds’ anger and resulting unrest is a new source of turmoil in a region consumed by Iraqi and Syrian civil wars and an international campaign against Islamic State fighters.
The PKK accused Ankara of violating the cease-fire with the air strikes, on the eve of a deadline set by its jailed leader to salvage the peace process.
“For the first time in nearly two years, an air operation was carried out against our forces by the occupying Turkish Republic army,” the PKK said. “These attacks against two guerrilla bases at Daglica violated the ceasefire,” the PKK said, referring to an area near the border with Iraq.
US officials have expressed frustration at Turkey’s refusal to help them fight against Islamic State. Washington has said Turkey has agreed to let it strike from Turkish air base; Ankara says this is still under discussion.
NATO-member Turkey has refused to join the coalition unless it also confronts Syrian President Bashar al-Assad, a demand that Washington, which flies its air missions over Syria without objection from Assad, has so far rejected.

By Bejay Browne

MUCH-LOVED Paphos based artist and musician Harry Hawkins has died, just eight months after the death of his author wife Sheila Hawkins.

The 82-year-old’s funeral was held at Neo Chorio village church in Paphos on October 7. Hawkins, who illustrated his wife’s books on local life and characters died at Limassol General Hospital on October 4.

The couple had two children, Karen and Jeremy and first experienced Cyprus in 1971 when Harry — a Flying Officer in the Royal Air Force — was posted to RAF Episkopi.

Following the invasion, the pair moved back to the UK where they remained until 1980. But a deep rooted love for the island remained.

Hawkins was again posted to Cyprus as a senior education and training officer at RAF Akrotiri.

Three years later, the couple bought a piece of land in Neo Chorio near Latchi and close to the unspoiled area of the Akamas. It was here they later built their home and Sheila took up writing about her experiences, Harry provided the drawings.

Sheila Hawkins is best known for her ‘Back of Beyond’ trilogy, (The Back of Beyond, Beyond Our Dreams, and Beyond Compare) in which the author conveys her love of Cyprus, her family’s experience with traditional village life and the unspoiled nature surrounding the village she so loved. Beautiful illustrations are provided by Hawkins, who was a keen artist.

The Hawkins’ Neo Chorio home also served as their office, studio and gallery. Harry’s distinctive style included work in acrylics, pen and ink and line and wash and a series of prints.

The former Royal Air Force pilot immersed himself in the social and cultural activities of the Paphos district and both he and his wife were baptised into the Orthodox Church.

Hawkins was also a keen musician. According to his musical partner Mark Thompson, he played and owned most brass instruments including the tuba, euphonium, tenor horn, flugelhorn and French horn. He was also a talented drummer.

“In his youth, Harry was a drummer with a dance band in Devon and during his time with the RAF he helped to run a number of military bands. Music was a huge part of his life as well as his art,” said Thompson.

The musician, well known for his guitar and vocal performances, first met Sheila and Harry Hawkins close to 20 years ago and performed with Harry in Cyprus for over nine years.

“For many years Harry used to stand alone in the harbour area playing Christmas carols on his euphonium and entertaining people. He got me involved with this as well and we also performed at a number of charity events as well as other concerts.”

Hawkins played at numerous fund-raising events for The Friends’ Hospice.

Chris Jones, President of hospice’s Foundation, said: “Harry was generous of mind and of his time and was passionate in his support for our efforts. He always had a ready smile for everyone and his old world courtesy pervaded. We will all miss him.”

Sheila Hawkins died at the Friends hospice in February.

Thompson said: “They were a great couple. I think losing his wife of 56 years was too much for him.”

By Constantinos Psillides

The House institutions committee yesterday postponed a discussion on the secret service KYP for 15 days, following a mix up.

A proposed bill aims at turning the secret service into an independent body, define its modus operandi and to install checks on whether its surveillance methods are lawful.

According to the MPs, the various government departments didn’t coordinate with each other prior to appearing before the committee, resulting in confusion regarding jurisdiction and authority over the actions of KYP.

One of the chief concerns was that the representatives gave conflicting answers as to whether the chief of police or the justice minister would have the authority to hire personnel for KYP. While KYP is mainly a police branch – with some military personnel- the proposed bill calls for the hiring of qualified civilians.

“The government should coordinate with itself before coming to us with a bill to vote on,” said main opposition party AKEL MP Aristos Damianou.

“It is known that KYP works for and answers to whoever is president. Suddenly the justice ministry wants to have a word as to who should work there. Last minute interventions like that will not be tolerated,” warned Damianou, adding that the government was given a 15 days extension to sort out the proposed bill.

The MPs additionally decided to cut the justice ministry provision from the proposed bill.

Following the House discussion, the presidential palace issued an announcement clarifying that according to the bill all hiring would be decided by the head of KYP and that final approval lay with the chief of police. “President Nicos Anastasiades is therefore in favor of the House amendment on the bill,” read the statement.

Neither the justice ministry nor Justice Minister Ionas Nicolaou responded.

When it comes to rein in KYP’s surveillance and actions, the new bill foresees the establishment of a special committee staffed by three former judges appointed by the president who will examine the legality of KYP’s actions and any allegations of misconduct.

It also includes a provision for a limited number of political appointees: one director and a number of deputy directors.

The service will be divided into a number of sub-departments or directorates depending on the needs of the country.

Some of the issues likely to get their own directorate include: the protection of Cyprus’ exclusive economic zone; hydrocarbons in general in the region; internal security; international relations; the Green Line, and military discipline.

By Constantinos Psillides

A comprehensive bill asking for sweeping electoral reform will be proposed by ruling party DISY within the next two weeks, party spokesman Prodromos Prodromou told the Cyprus Mail.

Prodromou was commenting on a report saying the bill was in its final stages.

The bill calls for raising the electoral bar from 1.8 per cent to 4 per cent, increasing the number of seats in the parliament, introducing the horizontal (cross-party) vote as well as holding municipal elections on the same day as parliamentary elections.

“We are now in the final stages of drafting the bill. Our lawyers are going through the proposed bill and we expect them to be ready in one week, two at the latest,” said Prodromou.

According to Prodromou, increasing the number of MPs was a necessity for introducing cross-party voting as it will only affect those seats. “Districts weren’t keen in relinquishing seats in the parliament for the sake of introducing cross-party voting. So, we thought it was best if we increased the number of parliamentarians and make clear that cross-party voting will only apply to those seats.”

Prodromou admitted that DISY hasn’t settled on the number of seats to be added, saying that it will probably be five, six or seven.

While cross-party voting has the public’s support, DISY is expected to have a hard time convincing main opposition party AKEL. AKEL officials stated multiple times in the past that they oppose cross-party voting on the grounds that it would benefit richer candidates, since they have the financial means to afford a bigger media exposure.

Asked by the Cyprus Mail, AKEL spokesman Giorgos Loucaides declined to comment on the proposed bill. He made clear that he didn’t wish to enter into a public debate on the subject. “There will come a time in the near future when we will be called to discuss the matter with everyone involved. Only then will we lay our cards on the table,” said the AKEL spokesman.

Probably the most controversial proposal is raising the electoral bar from 1.8 per cent to four per cent. Currently 1.8 per cent of the vote is enough for a party to claim a seat in parliament. At present, this would exclude the Green Party, Citizens’ Alliance and EVROKO from a seat in parliament.

Greens MP Giorgos Perdikis in the past called raising the electoral bar “anti-democratic, an action that promotes abstention and enhances the two-party system.”

The initial DISY proposal called for a five per cent electoral bar but the party settled for four, following meetings party leader Averof Neophytou had with parliamentary parties in June.

It should be noted that AKEL looks favourably on raising the electoral bar, since the party tried to introduce a similar bill in 2010. The bill then asked for raising the electoral bar to 3.5 per cent.

Besides gathering support from other parties, Prodromou noted that the bill’s biggest problem was coming up with a way of holding the municipal and parliamentary elections together. Both elections are scheduled to be held in 2016.

“This is easier said than done. We can either have both elections in May or October of 2016. Holding the elections in May means that we will have to extend all municipal officials’ terms for six months. On the other hand, if we hold the elections in October then we will have to extent the parliamentarians’ terms for six months,” said Prodromou.

The DISY spokesman explained that a lame duck local authority would potentially be a serious problem, since mayors and municipal councils have executive powers. “We can’t have people who were ousted making decisions for six months. That could potentially lead to some serious problems.”

When it comes to extending the parliamentarians terms, Prodromou admitted that people would react to it but that it was preferable to the alternative.

By Jean Christou

FROM pilot training to beach safes to publishing, fishing, kitesurfing and even repairing cemetery monuments, ten teams comprising of at least one Greek Cypriot and one Turkish Cypriot yesterday received a cheque for €10,000 from philanthropist Sir Stelios Hadji-Ioannou.

Speaking at the ceremony at the Stelios Philanthropic Foundation in old Nicosia, which was addressed by President Nicos Anastasiades, Sir Stelios said his aim was to bring business people together. “If people can come to get to know each other there is a better chance of a lasting peace,” he said.
Sir Stelios, who has been running the awards for six years and has dished out €1.2 million in grants said this year there had been a record number of applicants at 32.

In his address Anastasiades said the Stelios awards had shown real commitment to the development of bi-communal collaboration in a diverse range of sectors.

“The bi-communal business partnerships awarded today send a clear, two-fold message to the people of Cyprus and its political leadership,” he said. This message was that despite current economic challenges, Cyprus was not only well-equipped to accommodate and advance new business projects, but the spirit of entrepreneurship in Cyprus was well-established and could positively contribute to overcoming the difficulties which lie ahead.

It also exemplified the significant benefits associated with Greek and Turkish Cypriots working together, building mutual trust and enjoying joint collaboration, Anastasiades added.

He said there was a real need to implement measures that would restore confidence, rather than measures that increased mistrust through actions that violated international law.

“Unfortunately, the recent actions by Turkey serve neither the purpose of building confidence and trust, nor of establishing a constructive environment that can facilitate the negotiating process. On the contrary: they foster mistrust and raise serious doubts within the Greek Cypriot community as regards Turkey’s true intentions,” he said.

“Cyprus’ natural resource wealth belongs to the State, and, consequently, it is through the solution of the Cyprus problem that all of the legal citizens of the island will be able to benefit from the generated revenues that will arise from the exploitation of our natural resource wealth”.
Anastasiades said the status quo was unacceptable.

“I assure my Turkish Cypriot compatriots that I remain committed and I will work tirelessly and do my utmost to reach a settlement on the Cyprus problem. And this is the exact reason that throughout my term I have consciously avoided negative public comments related to the negotiating process, with the aim of creating a positive atmosphere to ensure that the talks succeed,” he said.

The ten winners:
• Niyazi Kizilyurek and Michael Theodorou – publishing books in three languages
• Constantine Constantine and Hakki Emir – restoring cemetery monuments
• Ozgu Ozun and John Droussiotis – flight school for pilots
• Kyriakos Savvides and Tolay Celebi – beach safes
• Pieris Hadjipieris and Yakup Engin TEL – restoring Apostolos Andreas
• George Kepola and Neshe Yashin – publishing a book on Nicosia
• Gozde Pehlivan and Melanie Pappas-Lemona – child creativity training
• Nick Pissourios and Erçim Uluğ – kite surfing
• John Papadikos and Tosun Altinel – fishing venture
• Costakis Constantinou and Kufi Tulga – fishing venture

By Elias Hazou

PRESIDENT Nicos Anastasiades will next month attend a three-way summit in Cairo with his Greek and Egyptian counterparts to discuss ways of further boosting cooperation and relations among these three Mediterranean nations, and, from Nicosia’s perspective, as a bulwark against recent Turkish provocations inside Cyprus’ Exclusive Economic Zone (EEZ).

Commenting on the high-level confab to be held on November 8, Anastasiades said yesterday it would take place “within the framework of the creation of a good atmosphere of cooperation with neighbouring countries, none excluded, irrespective of the deepening of relations with countries that may have certain differences among them.”

Ahead of the leaders’ summit, the foreign ministers of the three nations are scheduled to hold preparatory talks in Nicosia on October 29.

Asked whether the government was mulling steps beyond the marine agreement concluded with Athens on Monday, the President said Nicosia would be taking “measures according to developments, which will be announced.”

Sources told the Mail the Cairo summit would focus on “all manners of cooperation,” and did not rule out defence-related arrangements or a search and rescue agreement with Egypt similar to the one signed with Greece on Monday.

Earlier this month, Turkey issued a NAVTEX (marine advisory) reserving areas south of Cyprus for seismic surveys, trespassing into offshore blocks one, two, three, eight and nine of Cyprus’ EEZ. Italian company ENI is currently conducting exploratory drilling for natural gas in block nine.

Speaking on the state broadcaster, Foreign Minister Ioannis Kasoulides said the Cairo summit would deal with energy cooperation, including the prospect of Cypriot natural gas being supplied to liquefaction terminals in Egypt that are currently under-utilised.

On the international community’s response to Turkey – which publicly has been lukewarm – the chief diplomat said the government has the “full picture” and is satisfied with the efforts made behind the scenes to thwart or mitigate Turkish designs on Cyprus’ EEZ.

“Because we here in Cyprus are used to seeing Turkey deliver on what it says, we’re acting on the assumption that Turkey will make good on its NAVTEX threat,” he said.

Kasoulides said also that Cyprus was mulling taking recourse against Turkey at the UN Security Council, adding however that such a move has its pros and cons.

The government meantime is monitoring Turkish actions and preparing for any eventuality.

“We have formulated a specific plan, which will be executed according to developments,” government spokesman Nicos Christodoulides told CyBC.

“We shall escalate or de-escalate our actions according to developments.” he added, noting that no one can safely predict Turkey’s conduct in the coming days and weeks.

Christodoulides said also that ENI was continuing normally its drilling operations in Block 9 of Cyprus’ EEZ.

The company had been fully aware of possible entanglements when it first bid for Cyprus’ offshore blocks, he added.

Turkish actions in the eastern Mediterranean are “frustrating” other regional countries besides Cyprus, the spokesman said. Though not naming these countries, he was confident that they would not remain “idle observers.”

In addition to the Egypt summit, it has been confirmed that Anastasiades will be meeting with Israeli Prime Minister Benjamin Netanyahu before the end of the year, though the precise date and venue has yet to be determined.

Meanwhile Anastasiades will have a one-on-one meeting with Russian leader Vladimir Putin on the sidelines of the Asia-Europe Meeting (ASEM) taking place in Milan from October 15 to 17.

And the President will be attending the meeting of the European Council (October 23 to 24 October). There, he reportedly plans to deliver an address asking the Council to include in its conclusions references to Turkey’s violation of Cyprus’ sovereignty.

The Cyprus News Agency (CNA) cited diplomatic sources as saying that Anastasiades is unlikely to resume peace talks unless and until the Turkish provocations in the EEZ are lifted.

A resumption of negotiations under the current circumstances could be construed as Nicosia agreeing to joint exploitation of hydrocarbons with the Turkish Cypriots prior to a comprehensive settlement, the same sources told CNA.

Turkish Cypriot leader Dervis Eroglu on Tuesday accused the Greek Cypriot side of walking out of the peace talks, adding that Anastasiades cannot dictate conditions for returning to the negotiating table.

“Turkey will not say yes to whatever the Greek Cypriot side wants,” Eroglu was quoted as saying by Turkish Cypriot media.

Nicosia acknowledges that the Turkish threats of seismic surveys carry more of a political than practical significance.

The swathe reserved by the Turkish advisory does not overlap with any of the areas reserved by Cyprus for drilling operations by the Italian-Korean consortium ENI-KOGAS.

Moreover, the Turkish NAVTEX – inside international waters – does not prohibit transit through the reserved area, meaning that ENI’s operations are not expected to be hampered or inconvenienced.

A look at the map shows that, even if one were inclined to afford legitimacy to the breakaway regime in the north, which Turkey does, there is no feasible way to argue the area reserved by Turkey is part of a hypothetical EEZ of the occupied areas.

By Angelos Anastasiou

OUTRAGEOUSLY high wages and overstaffing at the semi-state Cyprus Grain Commission will translate to a forced shut-down within two years if it is not radically reorganised and allowed to operate as a private-law entity, its board chairman Demetris Theocharous has said.

Theocharous told the House finance committee that 70 per cent of the Commission’s €5 million annual budget – €3.5 million – goes towards covering its unsustainable payroll. The Commission employs 64 staff, 30 permanent and 30 term-contractors.

According to Theocharous, the average annual salary for a permanent staff member is €80,000, and for a term-contractor €34,000.

“In previous years a party had been going on in the Commission,” he told deputies. “In order for it to be viable, its budget needs to be drastically slashed, to €1.5 million.”

The Cyprus Grain Commission was established in 1960 as a state-controlled monopoly, in order to ensure the lowest possible prices for grain imports which it delivered to Cypriot businesses and maintain the country’s strategic reserves.

But with the country’s accession to the European Union in 2004, the grain market was liberalised and the semi-state importer was forced to operate under free-market rules.

According to Theocharous, the Commission’s failure to adapt to the new conditions saw many businesses resort to independent grain imports, resulting in a bloated, non-viable organisation.

“If it is left to operate under current conditions, the Commission will be forced to shut down within two years,” he said.

Deputies on the Finance committee were told that Cyprus consumes 600,000 tonnes of grain annually, 80 per cent of which is used as cattle feed.

The Commission recorded losses to the tune of €2 million this year alone.

Theocharous claimed that despite having to operate in a free market, the Commission’s closing will translate to price hikes in at least three end-products – milk, halloumi cheese, and kebab.

Asked to confirm talk of selling the Commission to foreign investors, Theocharous said that although no formal contact has taken place, investors from the United States and the Netherlands visited the Commission’s sites through the agriculture ministry.

Head of cattle-farmers organisation Nikos Papakyriacou told the Cyprus Mail that the Commission has not been fulfilling its function as a best-price ensuring mechanism for Cypriot businesses for a long time.

“It used to do just that,” he said. “But since 2004, it has no purpose – producers and cattle-farmers are free to import grain themselves, and the Commission is content with raising obstacles for them in order to stay relevant.”

Papakyriacou echoed Theocharous’ claim of a “party” going on in the Commission, arguing that entrenched interests will not allow for its modernisation.

“Just look at the Auditor-general’s annual reports – every one of them – since 2004,” he said. “Everyone has known about this, but nothing ever gets done about it because of either complacency or complicity.”

According to the cattle-farmers’ rep, permanent undersecretary at the finance ministry Christos Patsalides, who headed the Commission from 1997 to 2013, tolerated irregularities for years.

“The Auditor-general constantly kept pointing out that the Commission did not keep accounts,” he said. “And they kept replying the accounts are ready – but we have yet to see them.”

IN A COUPLE of weeks the Supreme Court should have its ruling ready on the constitutionality of the four foreclosures-related laws that were referred to it by the president. If just one of them is deemed constitutional the country will slip into a new period of instability and uncertainty as the next tranche of financial assistance would not be released and the state would be faced with another crisis.

Eurogroup President Jeroen Dijsselbloem did not mince his words at the news conference he gave after Monday’s meeting of the group. He said an effective framework for debt restructuring “remains an important pending issue that prevents the conclusion of the review.” Cyprus passed the four previous reviews comfortably but the fifth, which would lead to the release of close to €500 million, now depends on the Supreme Court decision.

Finance minister Haris Georgiades said at the weekend that the state could carry on meeting its financial obligations without the assistance for a few more months but he avoided saying what would happen afterwards. This is no consolation because before the state runs out of money there would be a new crisis of confidence with people withdrawing their money from the banks and consumer spending being restricted to the minimum in anticipation of a another economic collapse.

Everyone is hoping it would not come to this and the Supreme Court would declare all four laws unconstitutional, thus offering the political parties, which created the problem with their misguided populist thinking, a face-saving solution. But nobody could safely predict what the judges will decide at the end of this month, which means the worst-case scenario cannot be ruled out. This potentially disastrous development does not appear to have been given any thought, politicians presumably hoping the court will make it go away.

The government will need to consider all its options and be prepared. Perhaps the finance minister should consider engaging in some form of consultations with the parties to explore a face-saving solution. It is absurd to even suggest that a compromise needs to be found to spare the economy the prospect of a certain collapse, but when you have parties that never consider the consequences of their reckless public posturing there is no other choice.

Doing nothing until the announcement of the Supreme Court ruling would be a mistake as it might be difficult to control negative developments then. This is why the government needs to engage in some form of exchange with party leaders if only to establish what their intentions so that it could work out its damage limitation plan.

By Elias Hazou

PARTY-political influence and red tape must be tamed if reform of public administration is to be successful, the under-secretary to the President Constantinos Petrides told MPs on Tuesday.

Petrides, recently given the portfolio of managing reform in the public administration, was outlining to the House institutions committee the main thrusts of the government proposals.

Bureaucracy, favouritism and political meddling in appointments and promotions are the chief problems plaguing the running of the broader public sector, he told deputies.

“The current system is ailing, it does not promote those who are capable and invites political intervention,” he said, adding that scientific and technical solutions were needed.

The House meeting came a day after another committee heard that 70 per cent of the Grain Commission’s €5 million annual budget – €3.5 million – goes towards covering its unsustainable payroll. The Commission employs 64 staff, 30 permanent and 30 term-contractors. The average annual salary for a permanent staff member is €80,000, and for a term-contractor €34,000 while reports said the top jobs paid over €120,000, said to be more than the President earns.

And yesterday, at another House Committee deputies were told that a staffer at the Cyprus Sports Organisation, which has said it does not have the money to implement the football fan card, went on 55 trips abroad in two years, missing 155 days at work. It also had ‘personal pay scales’ for some employees.

Speaking on TV channel Mega last night, Agriculture Minister Nikos Kouyialis acknowledged the problems at the grain commission. “A lot of mistakes have been made and it is time to fix them. These issues have been on the government’s agenda from the very beginning,” he said. “Right now the project of public service reform is underway, and that will also include these organisations.”

The reform of public administration – designed to maximise efficiency and generate savings – is an obligation stemming from Cyprus’ bailout agreement.

Under the MoU with international lenders, authorities here must devise a “new performance based appraisal system in the public sector, for development and promotion purposes, linking performance with the remuneration system/ increments.”

Petrides said solutions regarding the appraisal of public sector workers and workers’ mobility must be ready by January 2015.

The new system must be far more efficient and productive, he said, noting that when an employee stays in the same position for 20 years this invites corruption.

The official has meantime been holding separate meetings with the parties to discuss the government’s proposals. This will be followed by talks with the civil servants’ blanket union PASYDY and with other trade unions, as part of the ‘social dialogue’ the government has promised.

As part of the review process, the government commissioned reports by World Bank and British experts, which found that public employees had no incentive to improve their productivity because promotions were based on seniority, and combined pay-scales ensured big annual pay rises irrespective of performance.

That review formed part of the ‘horizontal element’ of public administration reform, as described in the MoU. The ‘sectoral element’ deals with the role, competences, organisational structure, size and staffing of ministries, services and independent authorities; the possibility of abolishing, merging or consolidating non-profit organisations or companies and state-owned enterprises; and the possibilities for the re-organisation and re-structuring of local government.

Petrides said that so far reports have been produced relating to the ministries of agriculture, education and health, and reviews would commence soon for the ministries of the interior, communications and commerce.

Some public-sector organisations have reached the “end of their cycle” and must either be scrapped or restructured, he noted, but was quick to add that this would be a gradual process.

The payroll is a huge drain on public finances. The head of the Public Administration and Personnel Department has already hinted at the lowering of wages, telling deputies that a new payroll system would be created that can be sustained by the government budget.

At the House committee session, almost all political parties paid lip service to the need to reform public administration.

Bucking the trend, Greens MP George Perdikis expressed doubt as to whether the mulled reforms can stamp out politicisation in the civil service.

Likewise PASYDY senior officer Andreas Louka said changing the system from within would not solve the problem, stressing that “outside party interventions must stop.”

By Evie Andreou

NEARLY a thousand people in Nicosia have enrolled for a free daily sandwich at lunchtime provided by the Stelios Philanthropic Foundation’s ‘Food from the heart’ programme.

Serial entrepreneur Sir Stelios Haji-Ioannou introduced the project to the capital’s mayor, Constantinos Yiorkadjis at the foundation’s offices in the old part of town.

“To be able to help on a daily basis is a gesture that others can depend on. There are many ways to help; this is an easy and efficient way”, Sir Stelios said.

He said that he felt compelled to help Cypriots after witnessing last year’s banking and its impact on the nation.

“Sometimes it’s guilt, you know, because I was lucky, my businesses are going relatively well and I was not impacted from the crisis. I thought that I had to help the people, regardless of nationality and the best way to help is food,” he said.

The programme, launched in May last year from a single base in Limassol, provides daily sandwiches to anyone in need, with simple difficult procedures and without having to present a pile of paperwork.

At the presentation ceremony in Nicosia, students from the nearby Phaneromeni elementary school dropped by to chat with Haji-Ioannou and present him with a bouquet of flowers to thank him for the sandwiches and chocolate bars they receive daily.

“The children are very happy with the snack they receive daily, especially the chocolate. It is a great help for their families, especially now that many parents are unemployed and it is very useful, for the children that stay at school in the afternoon too for sports or music activities,” a teacher said.

“We thank Mr Haji-Ioannou because his initiative is incredibly helpful. In the middle of the worst economic crisis, to help people that need our help is the essence of solidarity and humanity,” said mayor Yiorkadjis.

“Success will be the day we close down this programme, the day that the doors will open and no one shows up, then you will know that we are out of the crisis,” Haji-Ioannou responded.

The founder of easyJet and the easyGroup said that the programme will expand to include the Kaimakli state pre-school and urged other schools that are interested in to benefit from the programme, to contact the Stelios Philanthropic Foundation.

In addition to the outlet in Nicosia, two distribution points already operate in Limassol and Haji-Ioannou said that his foundation is looking for other franchisees in all towns. Those interested to participate in the programme should visit stelios.com for details.

Toula Georgiou is currently the sole franchisee in Nicosia, and together with her husband and mother, they prepare and distribute sandwiches from 10am to 12 noon, Monday to Friday.

She said that 990 people registered within a month and a half and that 750 people receive sandwiches daily.

The distribution point in Nicosia is next to the Stelios Philanthropic Foundation at the corner of Palias Ilektrikis and Eptanisou 57
near the Archbishopric and behind the old town hall.

By Angelos Anastasiou

THE rapid annual rise in Russian tourist arrivals is expected to become a thing of the past, if political developments in the country do not change, according to Cyprus Tourism Organisation data reported in the local press yesterday.

This year alone, the number of tourists coming out of Russia has declined by 30 per cent, even though the number of Russians visiting Cyprus has increased with a modest – relative to previous years – 17 per cent.

According to CTO official Andros Papageorgiou, the seven-year rising trend in Russian tourists visiting Cyprus is expected to be reversed this year, the daily Phileleftheros reported.

The number of Russian visitors to Cyprus has increased almost tenfold over the last decade, to over 700,000 this year.

In 2010, the rate of increase had been 50.5 per cent relative to 2009, while 2011 saw an increase of 49 per cent over the previous year.
The rate had increased by 42 per cent in 2012, and a further 28 per cent last year.

Papageorgiou said that the factors causing the decline are external and include the conflict between Russia and Ukraine, the rouble’s exchange rate, EU sanctions against Russia and the Moscow government’s policy of encouraging internal tourism, as well as several instances of Russian tour operators going bankrupt, of which there were 14 such instances this year alone.

AKEL spokesman Yiorgos Loukaides said that in light of the alarming statistics provided by the CTO, the government needs to act proactively to ameliorate the effects of the downturn.

“On the one hand, measures are required to support and promote our tourist product in the Russian market, while we pre-emptively take measures to support mature markets, such as the German and Scandinavian ones,” he said.

“On the other, considering the fact that much of the problems occurring in the Russian tourist market is owed to EU sanctions, the Cypriot government should differentiate its position on the issue, and claim measures and compensation for the damage it is forced to suffer.”

Paradoxically, DIKO appeared more critical of the government’s stance, going as far as blaming the Cyprus government for its deteriorating relations with the Russian government.

“We appreciate, of course, the relevant factors that possibly affect the influx of Russian tourists, however we cannot ignore the negative reports in the Russian press on Cyprus’ stance against Russia, which could adversely affect attitudes,” DIKO tourism official Yiorgos Solomou said.

“We call on the government to take measures that would restore our relations with Russia, in order to reverse the declining tourist trend.”

By Angelos Anastasiou

TWO probes into money missing from Cyprus Airways’ coffers have been suppressed, with government ministers and the company’s board dragging their feet in rendering the carrier viable, pilots union PASYPI’s head Petros Souppouris said yesterday.

In a news conference following the union’s general assembly, Souppouris accused ministers and board members of “failing to take the appropriate measures” required to restore the company’s viability and fulfil the five criteria set by the European Union to allow the carrier to continue operations.

“Serious mistakes have been made, the most serious among them being that they failed to replace the management that led the airline into this mess,” he said.

Souppouris singled out a statement by former Cyprus Airways chairman Tony Antoniou in October 2013, in which he spoke of “irregularities and misappropriation of public funds,” as well as talk of €100m lost by the Communications minister.

“This money was not spent by the employees,” he said.

He added that it was not just €100m that was lost over the last two to three years, but an additional €150m raised through the sale of company assets.

Acknowledging that the former management under Antoniou was able to bring down the company’s operating costs and limit the losses for 2013 to €16m – down from a projected €50m – Souppouris argued that the company was in dire need of aviation experts who could have completed the transition into profitability.

“Instead, the only effort that was made was aimed at protecting five or six directors,” he said. “We are extremely angry with this.”

“There has been misappropriation of public funds,” he added. “There have been probes, and instead of the company’s chairman punishing the directors, he forwarded them to ministries.”

During the news conference, PASYPI handed reporters copies of correspondence between the union and ministries, the Attorney General’s office, the Auditor General, the House President, and the House Watchdog, Ethics and Finance committees.

“Everyone washes their hands and no one checks the Cyprus Airways irregularities,” he said.

PASYPI secretary Chrysanthos Hadjichrysanthou said the Auditor General replied to the union yesterday, saying the company fell outside his mandate.

But last month, the Attorney General’s office told PASYPI that it should forward any evidence it had concerning the issue to the police.

“How would we have evidence, since the probe reports are locked in ministry drawers?” Hadjichrysanthou wondered.

Asked about the effort to privatise the airline, Souppouris said the union is fully supportive as the company hasn’t been competitive for the last ten years.

“Therefore, we need a strategic investor who can grow Cyprus Airways properly, in collaboration with the government,” he said.

He argued that, once revitalised, the company can contribute up to €500m a year to the country’s GDP.

By George Psyllides

LAWYERS and judges believe there are big delays in the dispensation of justice in Cyprus, a survey has found, with lawyers contributing to the current state of affairs.

The survey found that 90 per cent of those asked believe that the duration of civil cases was unjustifiably long – 70 per cent said the same for criminal cases.

Two-thirds of the sample said lawyers contributed to the huge delays in criminal and civil cases, but the overwhelming majority – 94 per cent — said the system could improve if technology was used to exchange court documents.

The survey also found that a third of those questioned were satisfied with the lawyers’ honesty and ethics.

It was carried out by the bar association in co-operation with University of Cyprus professor Andros Kapardis and polled 370 lawyers and judges.

Bar association chairman Doros Ioannides conceded that the problem “is huge.”

“The delays do not advance the justice institution,” he said.

“We are living in an era of decline in the institutions, when everything is being questioned and we want to maintain the high standards justice enjoyed until today,” Ioannides said.

Recent reports claiming certain defendants had received favourable treatment by the Limassol district court have not helped the credibility of the justice system.

They were very serious cases, which, despite raising concern, they should not be considered as being the norm, Kapardis said.

The majority of those polled – 74 per cent – also believe that rules for civil procedure should be radically changed; 76 per cent believe criminal procedures must also be modernised.

Almost half, or 46 per cent, think that court decisions contained contradictions even though the facts were essentially the same.
Nearly 45 per cent said court decisions were fully substantiated and Supreme Court rulings were not biased.

By Constantinos Psillides

FUEL companies will be lowering fuel prices to reflect the global drop in oil prices, Star Oil manager Giorgos Petrou said yesterday, explaining that the price reduction was due to fuel shipments arriving two days ago that were bought at a lower price.

Speaking on both Sigma TV and CyBC radio, Petrou said that his company will cut prices by 2.3 cents a litre for petrol and 2.7 cents for diesel. Asked whether other fuel companies will follow suit, Petrou said, “I’m not sure, but I think so.”

Fuel companies have been under fire for their high prices since last Friday, after the consumers’ protection group Consumers and Quality of Life Union (CQLU) threatened to sue the government for allowing fuel companies to charge high prices. The group argued that fuel companies maintained high prices despite a drop in world oil prices, tolerated by the government in order to collect more taxes.

The CQLU said that prices should be 12 to 15 cents lower.

The fuel companies claimed that high prices were due to losses on the euro-dolar exchange rate, offsetting any gains from buying oil at a lower price.

Energy minister Giorgos Lakkotripis rejecting the claim that the government turned a blind eye while fuel companies profited.

Star Oil’s manager argued that fuel companies buy refined fuel and don’t deal in crude oil. “Adding to that are operational costs and other expenses. So, you see, fuel companies in Cyprus don’t necessarily charge according to the global oil prices,” argued Petrou, adding that one shouldn’t confuse fuel companies’ prices with fuel station prices. “Fuel station prices can vary. We urge the public to seek out cheaper pumps,” he said.

Petrou dismissed the claim that fuel companies responded to overwhelming public pressure to lower prices.

Loukas Aristodemou, the head of the consumers association, was not convinced, telling CyBC radio that the fuel companies are trying to placate the public with a minimal reduction and that the proposed cut still doesn’t reflect world oil prices.

Meanwhile, the former head of the Competition Committee (EPA) Costakis Christoforou scolded the current EPA head Loukia Christodoulou for not intervening, saying that “it takes guts for a public sector employee to do his job and stand up to injustice.”

Christoforou made headlines in September 2009 when he fined four major fuel companies €43m, accusing them of price collusion and unfair trade practices. The fuel companies took the case to the Supreme Court and in May 2011 their lawyers successfully argued that

Christoforou didn’t meet the necessary qualifications to head the Competition Committee and thus any decisions he made were void. Christoforou resigned shortly after.

“We received threats then. People wanted to stop us from doing our work, but we saw the probe through. What happened to that probe?” wondered Christoforou.

The current EPA head rejected Christoforou’s claims, saying that the Committee is understaffed and does everything it can to cope with the increasing workload. “As far as the probe on fuel companies, we are currently investigating the matter, but I cannot tell you exactly where the investigation has reached,” she said.

Christodoulou explained that the Competition Committee is not a pricing body and that it can only intervene in matters regarding competition.

By Marie Kambas

THE decision to cut carbon dioxide emissions in shipping should be taken at an international level and not just by the European Union as any unilateral step by Brussels would affect the competitiveness of the European and Cypriot shipping industries, a Cyprus Shipping Chamber (CSC) official said.

The regulation proposed by the EU aims at reducing ship CO2 emissions, which is considered responsible for global warming, by 2 per cent by 2020.

Alexandros Josephides

“EU regulation would require that ships trading to Europe will have to introduce additional measures both in terms of procedures, monitoring and reporting, as well as in terms of equipment for the better monitoring of the ship’s fuel consumption,” Alexandros Josephides, deputy director general of the CSC told the Cyprus Mail.

“This will mean additional costs for the ship operators,” he added. “If these measures are agreed at the IMO (International Maritime Organisation), which is our strongly preferred option, then of course these additional costs will be incurred, but they will apply equally to all vessels trading globally”.

Josephides, who is also a marine manager at the business group which represents around 160 shipping companies, added that any mandatory monitoring, reporting and verification system of a ship’s fuel consumption “must be agreed at IMO level, as it is the only way of securing a globally harmonised system”.

According to a document on the European Commission website, ships may save up to 55 per cent in fuel consumption by adopting fuel saving techniques such as speed reduction, propeller and rudder upgrade, hull coating, waste heat recovery and others.

While the introduction of EU regulations on CO2 cuts could impact the competitiveness of the European and Cypriot shipping industries compared to non-European countries, a reduction in fuel consumption could also help companies curb operational expenses, Josephides added.

“Shipping companies have a very strong incentive to reduce their fuel consumption and thus reduce their CO2 emissions: bunker costs represent an increasingly significant proportion of ships’ operational expenses, having increased by about 300 per cent in the last five years, while marine fuel prices are also expected to remain high,” he said.

According to the CSC, the shipping sector accounts for around 7 per cent of the Cyprus economy. The size of the island’s commercial fleet was 20.8 million gross tonnes in June last year, according to the European Union Shipowners’ Association.

Police on Wednesday arrested Paphos Mayor Savvas Vergas in connection with threatening text messages sent to witnesses in a suspicious land zoning case involving prominent developer Theodoros Aristodemou.

The mayor had been questioned for almost seven hours last week in connection with threatening text messages sent to four people including himself and two witnesses in a suspicious land zoning case involving Aristodemou, the owner of Aristo Developers.

Threatening messages were also sent to a journalist covering the case.

Police had detained his close associate, 33-year-old Maria Solomonidou, and her father, 64, in connection with the messages.

It later transpired that Vergas had bought the mobile phone used to send the messages, a fact he did not deny.

The mayor claimed he bought the phone for Solomonidou who was responsible, among other things, for handling the municipality’s social media accounts.

The decision to arrest Vergas was taken during an afternoon meeting headed by Attorney-general Costas Clerides.

During questioning last week, Vergas told police that he was at the town hall when he received the threatening message and that he could not remember when he had talked to her.

But reports said that authorities determined that Solomonidou and Vergas were at the same location when the messages were sent.

Vergas was escorted by police officers to his office, which was searched before returning to the CID.

“I have nothing to say,” the mayor said when prompted by waiting reporters.

Earlier, following a scheduled meeting in Nicosia on an unrelated matter, Vergas said his town was going through a rough patch but he would continue to “work selflessly from morning until midnight.”

Solomonidou is the sister of Aristo Developers designer Christos Solomonides, arrested along with his boss, the latter’s wife Roulla Aristodemou, and former municipal engineer Savvas Savva, in connection with forgery and fraud in the demarcation of 177 plots of land on behalf of the company.

It emerged that the plans for which the demarcation permits were issued were switched with new plans, which seemed to cede approximately 3,000 square metres, worth hundreds of thousands of euros, previously designated as green space, back to Aristo Developers.

Police are also looking into claims by a municipal councillor regarding a concert held in Paphos in the summer.

Vasos Demetriou claimed that an events company linked with Solomonidou got a tax break from the local authority on condition of making a donation to charity but had failed to do so.

Demetriou said the local authority had waived the entertainment for a concert given by Greek singer Sakis Rouvas on August 8.

The condition was that the company, whose director, on paper at least, is Solomonidou’s husband, would donate part of the net proceeds to the municipal food bank. The decision was taken by the council.

Demetriou said “not one cent” had been donated and no explanation had been given.

By Stelios Orphanides

BANK of Cyprus refuted claims by tourist group Aqua Sol published in a report in Phileleftheros yesterday that the hotel chain and nine other affiliate companies had blocked the appointment of Eleftherios Philippou as receiver, a bank official said.

“The appointment of a receiver has not been blocked; it is incorrect to state that,” Euan Hamilton, the bank’s head of restructuring and recoveries told the Cyprus Mail. “Philippou is still legally appointed and in office as the receiver-manager”.

The newspaper reported on its website yesterday, citing the Aqua Sol Group owner Yiannis Panayi, that the court did not confirm the receivership order while the company successfully disputed the legality of the appointment of a receiver. Philippou was unavailable for comment.

BoC appointed a receiver without warning and in defiance of the central bank’s code of conduct, while the two sides were engaged in restructuring talks, Phileleftheros quoted Panayi as saying.

Hamilton, said that BoC “remains committed to reaching consensual restructurings with all clients facing financial difficulties and the appointment of a receiver-manager is and always will be the last resort”.

The former Royal Bank of Scotland executive, who joined the largest Cypriot lender less than a year ago, did not rule out concurrent restructuring talks while Aqua Sol is in receivership.

A bank official said, on condition of anonymity, that the hotel group’s overall outstanding debt to the bank is almost €200m.

According to a June 2013 BoC internal report leaked to the press, Aqua Sol had been extended total credit worth €99m, of which €23m were in arrears, while approximately €9m was over 90 days due. The company, which is the bank’s second major client to be placed in receivership following last year’s banking crisis, was deemed a ‘high-risk’ borrower as its loans were restructured on an annual basis.

In addition to property collateral, in 2009 Aqua Sol had issued €70m worth of company securities as collateral to the bank, which allowed it to place the company under administration in case of non-payment.

An Aqua Sol official, who declined to be identified, told the Cyprus Mail that the company continues to operate as usual and that the receiver had not taken over in charge. He added that Aqua Sol continues to be profitable.

“We can find solutions which will allow us to service our loans,” the Aqua Sol official said.

Bank of Cyprus’s Hamilton declined to comment on Aqua Sol’s ability to generate profit, citing reasons relating to confidentiality.