By Marie Kambas

The agriculture ministry plans to disburse up to €4.2 million in European Union funds towards development and promotion of the domestic wine industry over the next two years, with zivania playing a leading role, Minister Nicos Kouyialis said on Tuesday.

Kouyialis said a national programme to support the wine industry focused on developing investment incentives for the modernisation of the sector, including the creation of visitor facilities at vineyards and wineries.

He was speaking at a news conference ahead of a ‘zivania festival’ in the villages of Alona and Pelendri on November 9 and 16.

Zivania, a potent spirit distilled from grapes, has re-emerged in popularity in recent years. Its production was strictly regulated under British colonial rule.

“I think Cypriot wines and zivania are showing a recovery, they are gaining in prestige. Consumers and foreign visitors rank them as products of character,” Kouyialis told a news conference.

He said that Cypriot consumers should show a preference for home products. “Cypriot wines have the quality and the reputation to penetrate European markets but we ourselves have to believe that first,” he said.

Of €4.2 million which will be allocated in 2014 and 2015, he said, €2.5 million would go towards modernising mountain wineries with more commercial varieties of grapes. The remaining €1.7 million would be spent on promoting wines domestically and in other markets.

By Amy Sawitta Lefevre

A co-founder of the Swedish file-sharing website, The Pirate Bay, has been arrested in Thailand, police said on Tuesday, after he tried to cross into the country from neighbouring Laos.

Hans Fredrik Lennart Neij, who is known in hacking communities as “TiAmo”, was detained at a checkpoint in the northeastern town of Nong Khai, immigration police said.

“Mr. Neij was detained … while trying to cross into Thailand from Laos where he had been living since 2012,” Police Major General Chartchai Eimsaeng told reporters.

The Swede has traveled to Thailand nearly thirty times since 2012 and has a home on the resort island of Phuket, he added. Neij was the subject of an international arrest warrant.

Neij and Gottfrid Warg founded The Pirate Bay in 2003. It has now grown into one of the world’s largest file sharing websites, allowing users to share files through peer-to-peer technology.

Along with other co-founders, Neij was sentenced to prison and multi-million-dollar fines in 2009 for copyright infringement related to The Pirate Bay’s activities.

Last week Warg, also known by his hacker alias “Anakata”, was sentenced to 3-1/2 years in prison after being found guilty of hacking into the mainframe of IT provider CSC in Denmark and accessing the Danish Civil Registration System and a police criminal register in 2012.

By Xola Potelwa

The South African prosecution authority confirmed on Tuesday it would file an appeal against the culpable homicide verdict and five-year jail sentence handed down to paralympian Oscar Pistorius last month.

Pistorius was absolved of the murder of his girlfriend Reeva Steenkamp at the end of a seven-month trial after the state failed to convince judge Thokozile Masipa of Pistorius’ intent to kill when he fired through a locked toilet door at his luxury Pretoria home, leading to a conviction for negligent killing and a five-year jail term.

“Today, we announce that the NPA will file the application for leave to appeal both the conviction and sentence,” the National Prosecuting Authority said in a statement on Tuesday.

“The merits of the NPA’s argument in this regard are contained in the papers that were filed with the registrar of the North Gauteng High Court today.”

The Olympic and Paralympic athlete, whose lower legs were amputated as a baby, killed Steenkamp on Valentine’s Day last year by firing four 9mm rounds into the door of a toilet cubicle, in what he said was the mistaken belief an intruder was hiding behind it.

Judge Masipa’s decision to rule out murder was criticised by legal professionals and the Women’s League of the African National Congress (ANC) as an erroneous interpretation of the law.

“We further announce, as we have indicated before, the appeal on conviction is based on a question of law,” NPA spokesman Nathi Ncube told PowerFM radio.

The value of bad cheques reached €2.8 million in the period between January and October, the Central Bank (CBC) said on Tuesday.
Around €146,000 worth of bad cheques were issued in October.
The CBC said 1,921 cheques bounced between January and October with 575 individuals and 417 companies placed on a preliminary blacklist.
October saw €146,457 worth of bad cheques issued compared with €440,456 during the same month last year.

By Dave Graham

Mexican police on Tuesday captured a fugitive former mayor and his wife suspected of being the probable masterminds behind the abduction of 43 student teachers feared massacred in September, officials said.

Police working with a local drug gang in the southwestern city of Iguala abducted the students after clashes there on the night of Sept. 26, sparking a huge manhunt and causing serious embarrassment for President Enrique Pena Nieto.

Jose Luis Abarca, who at the time was mayor of Iguala, and his wife, Maria de los Angeles Pineda, were captured by federal police in a house in Mexico City early Tuesday and were being questioned by prosecutors, a government official said.

The house was in the eastern district of Iztapalapa, one of the most violent parts of the capital, the official added, speaking on condition of anonymity. Mexican media said the couple had been hiding out there for several weeks.

A spokesman for Attorney General Jesus Murillo said more details would be released later on Tuesday.

The Mexican government is still searching for the students, whose disappearance shocked the country and undermined Pena Nieto’s claims that Mexico has become safer on his watch.

The government said last month that Abarca and his wife had ordered local police to stop a group of about 80 students from disrupting a political event on the night of Sept. 26.

Six people, including three students, died in the ensuing clashes in the violent state of Guerrero. Three days later, the mayor and his wife Pineda went underground. The government says Pineda comes from a family of high-profile drug traffickers.

Pineda was the boss of Guerreros Unidos, a local drug gang, within the Iguala government, according to evidence from a suspect arrested in the case that was made public by the attorney general’s office.

Investigators in Iguala said the police handed over the students to Guerreros Unidos. According to testimony from captured gang members, the gang killed the youths, then buried them in mass graves.

But despite the discovery of the remains of at least 38 bodies buried in the hills around Iguala and dozens of arrests, it remained unclear what happened to the students, who belonged to a leftist all-male college in Guerrero.

The case has sparked mass street protests, civil unrest in Guerrero and anger over the government’s failure to crack down on links between politicians and organized crime.

It has also derailed Pena Nieto’s efforts to turn public attention to his efforts to revive Mexico’s misfiring economy and attract investment after years of gang violence that has claimed about 100,000 lives since the start of 2007.

Parents of the missing students have attacked the government for failing to find them. One of them, Epifanio Alvarez, said their patience was running out.

“We’ve reached the limit,” Alvarez told Mexican television following news of the capture of the mayor and his wife. “We want answers, otherwise we will take action ourselves.”

A 36-year-old man was remanded in custody for two days on Tuesday on suspicion of sexually assaulting his stepdaughter, 14.
The girl claimed he had assaulted her on Monday morning while she was in bed.
She reported the alleged incident to her school councillor who informed the welfare office.
The girl’s mother and the police were also informed.
The suspect denies any involvement.

A 49-year-old man was on Tuesday remanded in custody for three days on suspicion of obtaining €16,500 from a Larnaca man under false pretences.
The suspect had introduced himself as a geriatrician who owned a luxurious elderly home in London, UK.
The 54-year-old who reported the case to police said he met the man in April this year.
In June, the suspect offered to help the 54-year-old purchase a car from the UK.
He was given some €6,500 to be used as the down-payment.
Following that deal, the suspect proposed importing various other commodities, including a wind turbine for home use, photovoltaics and a television set.
The suspect received a total of €16,500 in cash, a court heard.
He assured the victim that the merchandise would arrive on the island at the end of September. He then changed the date to October.
When he realised he was being conned, the 54-year-old demanded his money back and the two set an appointment outside a bank on Monday.
The suspect went inside the branch with the victim’s wife and asked to withdraw €16,500 from his account.
The teller informed them there was no such account. Using the suspect’s identity, the teller found an account belonging to him which only had a few cents.
Police told the court that the suspect has a record and had nothing to do with medicine.
The suspect claimed he only borrowed €350 from the victim and denied stealing €16,500.
However, police have statements from third parties who were present when the victim gave the suspect money.

By Angelos Anastasiou
It is up to Central Bank Governor Chrystalla Georghadji to justify her actions and to resolve the very public row over her reworked employment contract, President Nicos Anastasiades said on Tuesday.
Anastasiades said on Tuesday that t is up to Central Bank Governor Chrystalla Georghadji to justify her actions and to resolve the very public row over her reworked employment contract.
“It falls to Mrs Georghadji to take the necessary actions in order to dispel the perceptions that have been created,” Anastasiades told reporters on the sidelines of Tuesday’s Economist Conference in Nicosia.
Georghadji, who had remained stoically silent since the furore erupted finally went on the record on Tuesday. Also attending the same conference, she declined to comment on Anastasiades’ charges and said she would announce decisions once she has made them.
But she left no room for doubt when asked whether she was considering resignation. “I continue my work and the mission I was assigned,” she said.
Georghadji found herself cornered last Friday, after Anastasiades accused her of lying while questioned by the House Ethics committee over her daughter’s ongoing legal representation of entrepreneur Andreas Vgenopoulos – former boss of now-defunct Laiki Bank, the liquidation of which is being overseen by the Bank Resolution Authority, headed by the Central Bank governor. Legacy Laiki has sued Vgenopoulos, seeking damages for his role in the lender’s collapse.
The governor had claimed that she had discussed the matter with Anastasiades after initial press reports two months ago, which the President denied in his statement.
In fact, he said, Georghadji had failed to inform him of the potential conflict posed by her daughter’s job when accepting the post of Central Banker.
Matters were made worse for the governor when it was revealed that she had at least two provisions altered on the five-year contract template she was given to sign – one barring first-degree relatives of the governor from any job that may induce a conflict with the governorship’s duties, and another bringing her compensation on par with “pay rises afforded to the Central Bank’s permanent staff from 2007 to 2013” adding another €10,000 a year to her salary for her five-year term.
The revelations and Anastasiades’ statement on Friday prompted most political parties to call for her resignation on the same day.
Defending herself, Georghadji told deputies during the committee session that she had been offered two contract templates and simply chose one, which she aligned with legislation governing the Central Bank and its head on advice of her legal advisors. The law governing the Central Bank, she said, does not disallow the governor’s first-degree relatives to be employed by any business.
She also said that, acknowledging the potential conflict, she excused herself from Resolution Authority sessions – which she was meant to chair – that discussed the Vgenopoulos case.
But legal cover is of little use in political warfare, and Georghadji has been taking flak for her omission to disclose the conflict of interest and the contract changes timely.
On Monday, government spokesman Nicos Christodoulides tried to reduce the issue to a disagreement on ethics and civic duty which Georghadji needs to set right, while Finance Minister Harris Georgiades came out in her defence as a valued policy partner. Even occasionally vocal critic Averof Neophytou, ruling DISY’s leader, appeared to have dialled down Friday’s resignation imperative, calling instead for a “reorganisation” of the Central Bank’s structures and decision-making processes.
The saga continued on Tuesday, when Anastasiades adopted Georgiades’ “valued policy partner” spin but insisted that the issues he raised in his statement – the conflict of interest and the contract alterations – remained on the table.
“It was stated [on Monday] that there are no policy disagreements,” he said. “My statement related, and continues to relate, solely to the conflict of interest and ethical concerns, on which there has been significant dissonance with regard to the contract’s terms.”
Attorney-general Costas Clerides has played a rather murky role in the story. When the story was first run by daily Kathimerini, his position was that in a country as small as Cyprus this kind of relationship “could be expected to occur” but, that being said, state officials carried the burden of ensuring they carried out their duties honestly and with integrity.
But when invited by the Ethics committee to advise on Georghadji’s alleged conflict of interest two weeks ago, Clerides declined to appear because, he told deputies, the matter did not concern the legal services.
That was not his position during Friday’s session, however. When asked, he told deputies that while there is no legal issue, the governor could conceivably be in conflict under these circumstances, drawing Georghadji’s wrath.
And on Tuesday, the Attorney-general issued a statement saying he was “monitoring closely the developments around the issue of the Central Bank governor’s potential conflict of interest and the circumstances under which her contract of appointment was drafted and signed.”
“Although no complaint has been filed by any of the parties involved, the Attorney General is nevertheless monitoring developments around the conflict between top state officials and will intervene where he identifies grounds for intervention,” the statement said.
Meanwhile, the Ethics committee decided to resume discussion after last Friday’s session was cut short due to Georghadji’s departure.
In light of developments since Friday, deputies have decided to convene again on Tuesday, in order to investigate the issue of the altered contract.
To this end, they have decided to invite Auditor-general Odysseas Michaelides, Accountant-general Rea Georgiou and head of the President’s office Panayiotis Antoniou in order to obtain the facts around the drafting and signing of Georghadji’s contract.

By Angelos Anastasiou
Rules on the hotly contested issue of restricting the use of luxury cars for state officials will be discussed and voted during Thursday’s House plenum, the Finance committee decided on Tuesday.
Speaking after the session, deputy chairman Angelos Votsis said committee-level discussion had been concluded on the issue.
“These rules will significantly reduce those entitled to state cars as of January 1, 2016, and we feel they will allow for better management of an issue that provoked public sentiment,” he said.
Asked who would be entitled to exclusive use of a state limo under the new regime, Votsis responded that the list is quite limited, including only the posts of incumbent and former Presidents of the Republic and the House, government ministers, undersecretary to the President, government spokesman, police chief, National Guard chief and deputy, director of the National Intelligence Service, Attorney General, Supreme Court President, and the Auditor General.
“As of January 1, 2016, the vehicles used by other state officials will remain with the respective services for use as needed to cover each department’s needs and not for the exclusive use of the official,” Votsis said.
DISY deputy Prodromos Prodromou said the new rules include an amendment that would allow the House to monitor scheduling for the purchase or withdrawal of state cars, on the basis of a three-year plan to be submitted by the government that would indicate which cars are slated for withdrawal.
“The point of this effort is, first to reduce the privilege of using a state car under one’s personal capacity to the true top-tier state officials, and second, to sever the link between use of all other vehicles with one’s title and replace it with service needs that will be recorded and monitored,” he said.
Prodromou added that after the voting and implementation of the law, the next step would be for the government to submit its first three-year plan in mid-2015.

A British tourist died on Tuesday after trying to help a woman, 66, also British, who fell unconscious while swimming in Paphos and also lost her life.
The incident happened at around 4pm in the Yeroskipou area. The male tourist, 61, had tried to help the woman, also a tourist.
Shortly beforehand, she had helped her husband who had been caught in rough seas.
She was rushed to a private clinic where doctors pronounced her dead on arrival.
Reports said the man lost consciousness soon afterwards and was also rushed to a clinic where he was pronounced dead.
Their exact cause of death is expected to be determined by a post mortem.
Reports said there were no lifeguards in the area because they only work until the end of October.

By Andrew Downie

Former Brazil striker Adriano has been charged in connection with drug trafficking by a public prosecutor in Rio de Janeiro, court officials said.

Prosecutors allege that the 32-year-old former Inter Milan, Flamengo and Corinthians player bought a motorbike for a Rio drug trafficker to use in criminal activities in 2008.

He is accused of aiding and abetting the trafficker whom prosecutors say was a childhood friend of his in Vila Cruzeiro, one of Rio’s most violent favelas.

“The accused, freely and consciously, in collaborating in the trafficking of drugs, associated with active traffickers in the Vila Cruzeiro (favela) with the intention of facilitating the illicit trafficking of drugs and related activities,” the statement read.

Adriano’s spokesperson told Reuters judicial officials have not formally presented the player – whose full name isAdriano Leite Ribeiro – with the charges and he has no knowledge of them.

Adriano is in Le Havre negotiating a return to football with the French second division club and will only face trial if a judge decides there is merit to the accusations.

The troubled striker won the Copa America and the Confederations Cup with Brazil and two Serie A scudettos with Inter Milan but has spent years battling drink and weight problems.

He has been out the game since attempting a brief comeback with Atletico Paranaense earlier this year.

A real estate developing company whose boss is awaiting trial in connection with a suspicious land zoning case in Paphos said on Wednesday the company did nothing wrong.

“There is no offence, we trust justice and our values remain unwavering,” Aristo Developers said.

Prominent developer Theodoros Aristodemou -founder of Aristo Developers- his wife Roulla, company designer Christos Solomonides, and former Paphos municipality engineer Savvakis Savva were arrested in September in connection with forgery and fraud in the demarcation of 177 plots of land in the area of Skali.

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 euro, previously designated as green space, back to Aristo Developers.

“Our position was clear from the onset and remains the same: there is no illegality,” Aristo said.

The procedure was ongoing and continuously changed and final approval had not been issued, the company said.

The alleged crimes are believed to have been committed between February 3, 2010, and December 28, 2011.

The trial starts on November 14.

By Jeffrey Heller and Suleiman Al-Khalidi

Increasing strife over Jerusalem’s most volatile holy site plunged relations between Israel and Jordan into crisis on Wednesday with Amman recalling its ambassador for the first time since the countries’ 1994 peace treaty.

In a sign of festering tensions, a Palestinian rammed his car into pedestrians in Jerusalem’s city centre on Wednesday, killing an Israeli paramilitary border policeman before he was shot dead by police. More than a dozen people were injured.

The incident occurred after fierce clashes between Israeli police and Palestinians at the entranceway to the 8th-century al-Aqsa mosque, Islam’s third most sacred place.

Palestinian officials said Israeli forces had crossed the threshold of the mosque for the first time since 1967. Israeli police denied going into the house of worship.

Just as Israel was grappling with the second deadly Palestinian attack in Jerusalem in two weeks – and the risk of a third Palestinian uprising – Jordan added a new dimension to the conflict by recalling its envoy.

The decision was taken “in protest at the increasing and unprecedented Israeli escalation in the Noble Sanctuary, and the repeated Israeli violations of Jerusalem”, the Arab kingdom’s official Petra news agency said.

It also said Jordan would lodge a complaint with the UN Security Council over Israeli actions in the city and at the compound known to Muslims as the Noble Sanctuary, housing the al-Aqsa mosque and golden Dome of the Rock shrine. Muslims believe the Prophet Mohammed rose to heaven from the 7th-century Dome of the Rock.

Jews revere the hilltop in Jerusalem’s walled Old City as Temple Mount, Judaism’s holiest place, where two Biblical temples once stood.

There was no immediate reaction from Israeli leaders to Jordan’s dramatic step, a little over a week after Israel and Jordan marked the 20th anniversary of their peace treaty.

At a ceremony on Oct. 26 recognising the milestone, Jordanian Ambassador Walid Obeidat sounded a cautionary note over a campaign by Israeli ultranationalists to lift a de facto ban by Israel on Jewish prayer at the sacred compound.

Obeidat said that any change to the status quo there would ultimately imperil Israel’s second peace accord with an Arab state, after a treaty with Egypt in 1979.

Israeli Prime Minister Benjamin Netanyahu has issued public assurances that he would keep existing arrangements for Muslim prayer in place at the compound. The site has been run by Jordanian religious authorities before and after Israel’s capture of East Jerusalem from Jordan in a 1967 war.

But the push for change by several far-right Israeli lawmakers and settler activists has enraged Palestinians and drawn denunciation from their leaders.

The militant Islamist group Hamas claimed responsibility for the car ramming attack, saying it responded to “continued Zionist crimes” against al-Aqsa. Two weeks ago, a baby and a woman were killed in a similar road rampage in Jerusalem.

Last week, Israel closed the compound in Jerusalem’s walled Old City amid increasing Israeli-Palestinian violence around it. The move infuriated Jordan’s King Abdullah, who is the official custodian of the sacred compound.

The last full closure was in 2000, when the second Palestinian uprising, or Intifada, began shortly after the then Israeli opposition leader, Ariel Sharon, visited al-Aqsa.

COMMON INTERESTS

Daniel Nevo, Israel’s ambassador to Jordan, said the Israeli government was very sensitive to Amman’s position on al-Aqsa and to the pro-Western kingdom’s wider role in a Middle East increasingly torn by sectarian conflict.

“Our greatest fear nowadays is that someone is trying to create disturbances on the Temple Mount in order to ignite the region, in order to harm both Jordan and Israel,” Nevo told Israel Radio.

“Jordan’s prosperity and stability are a salient Israeli interest – and the other way around – because we are surrounded by many centres of insanity, both in Syria and in Iraq,” he said. “I believe that the common interest of Israel and Jordan is to survive ISIS (Islamic State insurgents) and the extremists to the north and the east.”

The right-wing Netanyahu, commenting on the latest attack in Jerusalem, said it was a direct result of what he termed incitement by Hamas and Western-backed Palestinian President Mahmoud Abbas over the situation at the holy compound.

A week ago, an Israeli advocate for Jewish prayer at the site was wounded by a Palestinian gunman, who was shot dead a day later by police searching for him. There have also been frequent clashes at the complex and elsewhere in East Jerusalem between Palestinian stone-throwers and Israeli riot police.

Peace talks between Israel and the Palestinians collapsed in April and since then Israel has announced plans to expand settlements in occupied territory where Palestinians seek statehood, with East Jerusalem as their capital.

A war in Hamas-run Gaza between the Israeli armed forces and Palestinian militants in July and August has also contributed to a polarisation of the atmosphere.

By Richard Balmforth and Thomas Grove

Kiev said on Wednesday it would halt payment of state funds in areas controlled by pro-Moscow rebels, as both sides hardened positions in what is rapidly becoming a “frozen conflict”: a long-term stalemate that the West believes is Russia’s aim.

A day after the rebels held inauguration ceremonies for their leaders, the separatists and the central government each accused each other of violating a September peace deal and signalled they would withdraw support for some of its terms.

The past four days have seen the rebels stage elections for leadership which the government called illegal, and the government respond by saying it would revoke a law that would have granted eastern regions autonomy and sent them cash.

Despite a ceasefire declared two months ago, two teenagers were killed by shelling in Donetsk, one of the two separatist strongholds, on Wednesday as they played football on a school sports field, the city’s administration said.

The rebels say their newly elected leaders must be allowed to negotiate with Kiev directly; Kiev says this is impossible. Both sides’ positions reverse parts of the 12-point peace plan, the Minsk protocol, agreed in Belarus in September.

With Kiev lacking the military might to break the rebels by force, Western allies now fear that a large chunk of Ukrainian territory will become a Russian protectorate with a parlous economic future, beyond the writ of the central government.

“We have now realistically entered the phase of a ‘frozen conflict’,” said Yury Yakimenko, a political analyst at Ukraine’s Razumkov political research centre, using a term often applied to other ex-Soviet republics where separatist enclaves have been protected by Russian troops since the early 1990s.

The American general who serves as the highest ranking NATO officer also said this week that the conditions for a frozen conflict were being created in Ukraine.

KREMLIN PLAYBOOK

Russia seized and annexed Ukraine’s Crimea region in March, but has been more ambiguous about its intentions in eastern Ukraine, where it has supported separatist rebels but has not recognised their declarations of independence.

So far this week Moscow has stopped short of recognising the rogue elections held in Ukraine’s east on Sunday which elected leaders of two rebel “people’s republics” that jointly call themselves “New Russia”.

Western governments see the votes as part of a scenario, worked out in the Kremlin, to perpetuate instability in Ukraine after the ex-Soviet republic of 46 million shifted policy westwards following the overthrow of a Moscow-backed president.

Kiev and the West fear Russian President Vladimir Putin’s grand design, following the annexation of Crimea in March, is to render Ukraine ineligible to become part of mainstream Europe, with a conflict left unresolved within its borders.

“Russia will direct its efforts at supporting instability, at hindering the creation of Ukrainian law-based institutions and at increasing permanent instability,” Yakimenko said.

Russia has dismissed such suggestions and accuses the West of stoking the crisis by staging an “anti-constitutional coup” in Kiev in February after months of street protests against a president who spurned a trade pact with the European Union.

Moscow denies sending in troops and weapons to support the rebels, although many of its soldiers died there, especially in August when Western governments say Russia despatched armoured columns to protect the rebels from the defeat.

Ukrainian President Petro Poroshenko said on Tuesday the rebels had violated the Minsk agreement by holding elections outside Ukrainian rules, and that he would ask parliament to suspend a law that would give their regions a “special status”.

The rebels said this “seriously damaged” the Minsk protocol and signalled they would no longer abide by it.

The “special status” law would have given the two rebel regions Donetsk and Luhansk rights to elect local officials under Ukrainian law, offered separatist fighters freedom from prosecution for acts on the battlefield and guaranteed the flow of state funds to rebel-held areas until peace was restored.

Poroshenko said he wanted the law scrapped because he did not want to keep funding terrorists. The rebels had violated the Minsk agreement by breaking the ceasefire and failing to carry out prisoner exchanges, he said on Tuesday.

Prime Minister Arseny Yatseniuk told a government meeting that Kiev would continue to supply gas and electricity to the separatist regions but “so long as the territories of Donetsk and Luhansk regions are controlled by imposters, the central budget will not send funding there.”

The cut-off of funding would deprive the war-shattered rebel-held regions of money for schools, hospitals and infrastructure.

Pensions are still being paid into accounts of retired workers in rebel held areas, but banks there have been cut off so recipients must move to other parts of Ukraine to collect.

Both sides say they are still committed to continuing the Minsk peace process. Poroshenko has said he will propose a new law to provide a “special economic zone” for the east and set a new date for hoped-for Ukrainian-run local elections, originally planned for early December.

But Kiev looks unlikely to agree to talks with separatist leaders as this would imply Kiev’s formal recognition of them, and staging Ukrainian-approved elections in their territory seems impossible.

ISOLATING THE SEPARATISTS

Kiev appears to be aiming now to isolate the separatist leadership rather than break it. The message on Wednesday was that the rebel leaders may have to turn to Moscow now for cash handouts and subsidies to finance their breakaway aspirations.

This is a risky strategy as it could be seen as Kiev abandoning Ukrainians living in rebel-held areas. But Poroshenko is not expected to order a new military offensive, despite issuing a decree on Wednesday that would raise defence spending to 3 percent of gross domestic product from 1 percent.

Ukrainian troops suffered big losses in August when they were cut off by separatists Kiev said were backed by Russian troops. Despite the ceasefire, more than 100 Ukrainian soldiers have been killed since the truce came into force.

“A ‘hot phase’ is still going on. There is no ‘frozen conflict’ here,” said Taras Berezovets of the Berta political research centre.

Kiev’s military effort now puts less emphasis on taking back the Donetsk and Luhansk rebel strongholds than on protecting other cities from any further Russian-backed assault.

Poroshenko said on Tuesday he was sending newly formed units to cities including Mariupol on the Sea of Azov, a possible strategic target since it lies on a coastal route from the Russian border to Crimea.

In a decree made public on Wednesday aimed at strengthening the state’s defences, Poroshenko also ordered the government to work on a new model for guaranteeing national security, and re-introduced an old Soviet-era practice of providing basic military training in schools.

By Steve Holland and John Whitesides

President Barack Obama faced a political rebuke and a curb on his policy ambitions on Wednesday after Republicans seized control of the US Senate and captured their biggest majority in the House of Representatives since Harry Truman’s presidency more than 60 years ago.

Tuesday’s midterm elections gave Republicans control of both houses of Congress for the first time since elections in 2006. Obama, who has lurched from crisis to crisis and whose unpopularity made him unwelcome to many fellow Democrats running for office, scheduled a news conference for 2:50 pm EST (1950 GMT) on Wednesday.

He invited Democratic and Republican leaders of Congress to the White House on Friday to take stock of the new political landscape.

It was “a pretty ugly night” for Democrats, said Representative Steve Israel, chairman of the Democratic Congressional Campaign Committee, speaking on MSNBC.

When the new Congress convenes in January, Republicans will be armed with their biggest majority in the House since the Democrat Truman’s first term in the late 1940s. With some races yet to be decided, NBC News projected Republicans would win at least 244 seats in the 435-seat chamber.

The Republican takeover will force Obama to scale back his ambitions to either executive actions that do not require legislative approval, or items that might gain bipartisan support, such as trade agreements and tax reform.

It also will test his ability to compromise with newly empowered political opponents who have been resisting his legislative agenda since he was first elected in 2008. Americans elected him to a second and final four-year term in 2012.

In stock market reaction to the results, the energy sector gained on bets that new legislative measures could be favorable.

The S&P Energy sector rose more than 1.5 per cent on hopes Republican control of the Senate will lead to reform of crude and natural gas export laws and motivate the Obama administration to include those energy exports in new, or broader, trade agreements. Republicans have pressed the president to approve the Keystone XL pipeline carrying oil from Canada.

‘WE NEED TO GET THINGS DONE’

New Jersey Governor Chris Christie, a possible presidential candidate in 2016 who campaigned for fellow Republicans around the country, said the Senate results put the burden on Obama.

“We need to get things done … and put things on the president’s desk and make the president make some decisions,” Christie said on “CBS This Morning.” He cited tax reform, a national energy policy and job stimulation as pressing needs.

The shift in the Senate also could prompt a White House staff turnover as some exhausted members of the Obama team consider departing in favor of fresh legs.

Before the election results, the White House had signaled no major changes. Officials said Obama would seek common ground with Congress in such areas as trade and infrastructure.

A one-term senator before he became president, Obama has often been faulted for not developing closer relations with lawmakers.

He will find one familiar face in a powerful new position. Republican Senator Mitch McConnell of Kentucky, who won a tough re-election battle against Democrat Alison Lundergan Grimes, will replace Democrat Harry Reid as Senate majority leader. Reid has been one of Obama’s top political allies and helped steer the president’s signature healthcare law through the Senate in 2010.

“Some things don’t change after tonight. I don’t expect the president to wake up tomorrow and view the world any differently than he did when he woke up this morning. He knows I won’t either. But we do have an obligation to work together on issues where we can agree,” McConnell said in his victory speech in Louisville.

TOSS-UPS BECOME REPUBLICAN WINS

In Tuesday’s rout, Republicans won in places where Democrats were favored, pulled out victories where the going was tough and swept a number of governors’ races in states where Democrats were favored, including Obama’s home state of Illinois.

Republicans needed six seats to win control of the 100-member Senate. By early on Wednesday, Republican candidates had picked up seven Democratic seats: Arkansas, Colorado, Iowa, Montana, North Carolina, South Dakota and West Virginia.

Democrats had dominated Republicans in the Senate, 53-45 with two independents, going into the election but Republicans will now outnumber them 52-45 with two independents. Louisiana’s U.S. Senate race will be decided in a Dec. 6 runoff.

In the House, Republicans had held a 233-199 advantage before Tuesday’s vote. NBC News projected they would hold at least 244 seats and as many as 249 seats.

The last time Republicans controlled both houses of Congress under a Democratic president was 1995-97 during Bill Clinton’s administration.

Once the euphoria of their victory ebbs, Republicans will be under pressure to show Americans they are capable of governing after drawing scorn a year ago for shutting down the government in a budget fight. That will be a factor in their ambitions to take back the White House in 2016.

Partisan battles could erupt over immigration reform, with Obama poised to issue executive actions by year’s end to defer deportations of some undocumented immigrants.

By Margarita Antidze

Georgia’s foreign minister quit on Wednesday and one of six parties in the ruling coalition pulled out, depriving it of a parliamentary majority in a rift over the pace of integration with the West.

Foreign Minister Maya Panjikidze, who cited threats to Georgia’s pro-Western course, and a junior minister resigned following the dismissal of the former Soviet republic’s pro-Western defence minister by Prime Minister Irakly Garibashvili.

Garibashvili said he remained committed to closer ties with the West.

But the defection of the Free Democrats, led by sacked minister Irakly Alasania, from the Georgian Dream coalition increases political instability in the country of 4.5 million crossed by pipelines that carry Caspian oil and gas from Azerbaijan to Europe.

“We have left the coalition,” Alasania declared after his party met other leaders of the coalition to discuss the crisis.

The Free Democrats have 10 of the coalition’s 83 seats in the 150-seat assembly. The coalition will now need the backing of independent deputies for a majority but a confidence vote must be called only if seven or more of the 20 cabinet members are replaced.

The tensions in the coalition highlight Georgia’s difficulties trying to pursue its goals of joining NATO and the European Union without antagonising its former Soviet overlord Moscow, with which it fought a five-day war in 2008.

Alasania had irked Garibashvili by saying the arrests of several officials in his ministry were politically motivated and meant to undermine supporters of better relations with the West.

“Georgia’s Euro-Atlantic integration is the most important thing for me and my team,” Panjikidze told a news conference at which she said four deputy ministers were quitting with her.

“My team and I cannot hide the threats that our country faces now,” she said, announcing she was quitting Georgian Dream.

Alexy Petriashvili, a member of the Free Democrats, also resigned as the state minister for European and Euro-Atlantic integration.

NO CHANGE IN POLICY

Garibashvili said suggestions by Alasania and his allies that the country’s pro-Western foreign policy was under threat were unfounded.

“Our foreign policy course is unchanged. It is irreversible,” he said in a statement. “Those ridiculous and naive statements of course will have no effect at all.”

Garibashvili said Mindia Janelidze, secretary of a council overseeing security, will replace Alasania as defence minister and said his critics’ statements and actions amounted to sabotage that could harm Georgia’s interests.

President Georgy Margvelashvili says the crisis poses “a threat to the efficient functioning” of state institutions and to Georgia’s quest for Euro-Atlantic integration.

Georgia signed an agreement with the EU in June which deepened political and trade ties and has long been a U.S. ally, but relations with Moscow are strained and Tbilisi has watched carefully as the crisis in Ukraine unfolded.

Russia annexed Ukraine’s Crimea peninsula in March and still occupies the Georgian regions of Abkhazia and South Ossetia, over which the countries went to war in 2008.

Western countries have expressed concern that the Georgian Dream government, first formed under billionaire Bidzina Ivanishvili in 2012, has persecuted political opponents and used selective justice against them.

Dozens of ex-officials, including a former prime minister, defence and interior minister and the mayor of the capital Tbilisi, have been arrested on charges such as abuse of power and corruption since the coalition came to power.

By Tom Hayward

Manchester City’s hopes of qualifying for the Champions League knockout stage were dealt a severe blow after Seydou Doumbia’s brace and two red cards subjected them to a humiliating 2-1 defeat by CSKA Moscow at the Etihad Stadium on Wednesday.
Doumbia twice capitalised on woeful defending to score, the first inside two minutes, either side of a sweet strike by Yaya Toure who was later sent off.

Half-time substitute Fernandinho was sent off midway through the second half before Toure followed after lashing out at a CSKA player to complete a dreadful night for City who have taken two points from four Group E games.

Russia’s CSKA, who were banned from selling tickets for the game following repeated bad behaviour from their supporters, have four points, level with AS Roma and eight behind Bayern Munich who beat the Italian side 2-0.

Elsewhere, Chelsea stretched their unbeaten start to the season to a club record-equalling 16 games with a 1-1 Champions League draw against Maribor but the 2012 winners were given a mighty scare.

The Slovenian upstarts, destroyed 6-0 by Chelsea at Stamford Bridge two weeks ago, took the lead in the 50th minute when Macedonia winger Agim Ibraimi curled in a spectacular left-foot shot from the corner of the box.

Maribor had a great chance to make it 2-0 on the hour when the unmarked Luka Zahovic blazed the ball over the bar from six metres with an open goal at his mercy.

Chelsea suddenly upped the tempo and it came as no surprise when Nemanja Matic equalised with a tap-in at the far post after captain John Terry had headed on a right-wing corner from Cesc Fabregas.

By Elias Hazou

THE departure of a drilling rig from Turkey’s coast and headed toward Cyprus sparked wild media speculation on Wednesday, ending days of hysterical theories about the start of Turkish oil and gas exploration off the island.

The rig had left Iskenderun, in south eastern Turkey and was headed on a course toward the island. Greek media – soon copied by Cypriot media – initially reported that it might be headed offshore Cyprus to conduct deepwater drilling in block 2 or 3 on Turkey’s behalf. Subsequent reports during the day noted, however, that the rig might be headed to Limassol for maintenance, which proved to be the case.

The conjecture came amid unconfirmed earlier reports cited mostly in the Turkish press in recent weeks that Turkey was looking to buy or lease a deepwater drilling platform from a Romanian company. Ankara was also said to be in talks with Azerbaijan for the same purpose. The reports come in the wake of Turkey’s stated intent to follow up seismic research in Cyprus’ Exclusive Economic Zone (EEZ) with actual exploratory drilling.

Maritime sources told the Cyprus Mail the jack-up rig had been working on a well off the Turkish coast, but at some point the contract was cancelled.

GSP Offshore, the Romanian owning company, subsequently decided that the rig required maintenance and survey inspection and selected Limassol port. The rig left Alexandretta on Tuesday. It is being towed and is expected to reach Cypriot waters on Saturday.

A Cyprus-based company has got the service contract at Limassol harbour. A towing ship operated by the same company will rendezvous with the rig once the latter reaches Cypriot territorial waters.

On arrival at Limassol, the rig will remain there for two to three months. The shallow-water rig can drill at a depth of up to 90m.

“A lot of fuss and confusion has been generated over nothing,” sources close to the company said.

By Evie Andreou

THE Famagusta tourism agency expects a 15 to 18 per cent increase of tourists from the U.K. next season.

The agency’s chairman, Ayia Napa mayor Yiannis Karousos said that he and his fellow mayor of Paralimni, Theodoros Pirillis, met with all of the major UK travel agencies at the World Travel Market exhibition in London and said that he is very satisfied of the outcome, not only for Famagusta but for Cyprus in general.

Karousos told the Cyprus News Agency that the incentives provided by the government last year to increase the building coefficient of hotel units seem to have helped in the offer of more hotel beds.

“British tour operators saw with satisfaction that there are now more hotel beds in Cyprus which they have already rushed to offer to their clients for next year,” Karousos said.

He added that it seems the third largest U.K. tour operator will probably double its booked hotel packages for the Famagusta area.

Karousos added that there is also the possibility of an increase of arrivals from Scandinavia since several tour operators have removed high risk neighbouring destinations from their programmes.

He added that a small decline is expected in arrivals from Russia.

“We hope that with the right moves of the hoteliers and the Cyprus Tourism Organisation there will not be a great drop in tourist arrivals from Russia,” he said.

By Stelios Orphanides

THE government intends to overhaul the country’s pension system and its institutions and will initiate a social dialogue in the near future, the finance minister said.

The pension reform will attempt to provide “coverage with concrete and credible incentives and obligations and a revision of the tax approach of the largest possible part of the population,” finance minister Harris Georgiades said, according to an emailed audio file.

The reform will also aim at ensuring “the correct, credible and transparent operation of the funds at a competitive cost internationally” through a new regulatory framework of the quality, he said.

Georgiades added that pension funds will be encouraged to merge and exploit the benefits of economies of scale and create best practices structures that minimise risk as “as the existence of hundreds of funds in a small economy like ours is an oddity”.

In order to strengthen the supervisory and regulatory framework, the government will merge the Insurance Companies Control Service with the Registrar of Occupational Retirement Benefits Fund, which is one of the International Monetary Fund’s recommendations as it would improve the effectiveness and efficiency in supervision, the finance minister said.