A HELICOPTER crashed into a crane on top of one of Europe's tallest residential blocks on Wednesday, killing two people as it burst into flames and threw plumes of smoke into the foggy air above central London.
Police said there was nothing to suggest a terrorism link to  the crash on the south bank of the River Thames in the British capital, where 52 commuters were killed in rush hour suicide bombings in 2005.
"There was a really loud bang," said Julie Marsden, who works in an office building near the crash site which is close to landmarks such as the headquarters of Britain's MI6 international intelligence agency and the Houses of Parliament.
"We saw the crane fall to the ground and this massive plume of black smoke," Marsden told Reuters.
Witnesses said the helicopter hit the crane on top of the as yet unoccupied 185-metre (200-yard) high cylindrical block - The Tower, One St George Wharf - span out of control, fell to the ground and burst into flames, setting nearby buildings alight.
There was wreckage and debris strewn across roads close to Vauxhall train station, a major transport hub on the south side of London, which was packed with thousands of commuters at the time of the incident shortly after 0800 GMT.
A Reuters reporter at the scene said tangled bits of crane could be seen hanging off the side of the tower, the top of which was still shrouded by low cloud an hour after the crash.
Police Commander Neil Basu said the helicopter was on a commercial flight from Redhill, south of the capital, to Elstree, home to famous British film studios in north London, but had been diverted to a heliport near the crash site.
He said there were 11 casualties including two dead and one critically injured. The emergency services said the pilot was one of those killed and it was not thought anyone else was on board. The other fatality was found near the wreckage and the fire service said it had rescued a man from a burning car.
The helicopter involved was an Italian-made AgustaWestland 109, the company's best selling VIP corporate helicopter, according to a source familiar with the situation. The twin-engined helicopter can carry eight passengers.
Rezart Islami, 27, a construction worker from Kosovo who had been on a nearby site, said he saw the helicopter flying fast up the river before it smashed into the crane which then fell and hit two cars.
"I was shocked, it was spinning around and lost control," he told Reuters.
Another witness, Edmir Pishtar, who was in a van outside the building site, said he saw half the crane crash down and cut into two cars on the road. He later spoke to the operator who was about to get inside the crane cab.
"He was literally shaking because he was getting ready to climb into the crane and he was late," Pishtar said.
The Tower, One St George Wharf, is described on its website as the epitome of luxury London living, with 360-degree views across the capital and over the Houses of Parliament.
Builder Brookfield Multiplex said the tower, which is not occupied and is under construction, has 52 floors and houses 212 luxury apartments. Media reports in recent years have suggested the Penthouse apartments could go for as much as 50 million pounds ($80 million).
"Fortunately for us we have done a full headcount and there are no injuries or fatalities among anyone on the site," said Tony Pidgley, chairman of the tower's developer Berkeley Group .
"The crane driver normally starts at eight o'clock but unusually, today of all days, was late."
He said it was too early to speculate on the cause of the crash but helicopters should normally fly 500 feet (150 metres)above tall structures.
Police were questioning witnesses in the area and dozens of emergency vehicles were in attendance, Reuters reporters said. Roads around the area including a route over the Thames were closed off, and bus and rail services were affected.
"There's nothing to suggest any terrorism link," a spokesman for London's Counter Terrorism Command said. The fire service said eight fire engines and 60 firefighters were on the scene.


Helicopters in London are generally supposed to fly along the River Thames but London City Airport said its flights had been disrupted due to low visibility.
The Department of Transport's crash investigation unit said it was preparing the launch an inquiry into the incident.
 

THE €350 million Limassol Marina is heading towards completion as 90 per cent of the work is finished, meaning the new facility will be fully operational in the first half of 2014.

The project’s PR officer, Sophia Paraskeva, said yesterday that Limassol Marina’s Nereids Residences, consisting of 94 luxury apartments and penthouses, are receiving their final touches, as the first residents are expected to arrive over the next two weeks. 

Aside from the upcoming delivery of the apartments, the first yachts are planned to arrive in March and the commercial area will open its doors to the public in June, she said.

As far as the global crisis is concerned, Paraskeva said that businesses and sales were affected. “Fortunately, however, we have the support and financial backing of the most reputable companies on the island, as well as an extremely unique and enticing product at our fingertips,” she  said. 

“This marina is one of few integrated marinas in the heart of an international city like Limassol and certainly the only new master plan development offering private berths directly attached to villas. It is the first super yacht marina in Cyprus, it is conveniently located at the crossroads of three continents and it seamlessly combines living and sailing in an unrivalled environment.”

When asked whether they were satisfied with how things were progressing in terms of sales, Paraskeva said that they still had to release all of the residential units for sale but the results to date had been very positive, she said. 

Half the apartments and penthouses at Nereids Residences have already been sold while contracts for apartments at Thetis Residences and for a number of Peninsula and Island Villas, including the two largest residences of the project, have also been signed. 

Apart from buyers from Russia, the UK, and Middle East, some interest from China was observed but this was more concentrated on the lower end of the market.

Properties at the marina start from €370,000. One villa within the complex was sold for €13 million. 

Although the project has raised some environmental issues, Paraskeva said that while disturbing the sea bed to reclaim land and create the marina structure, they recovered fridges, car tyres, mattresses, and pieces of furniture, therefore actually helping clean the sea.

The marina will have 650 berths for small vessels up to 115 metres in length. 

The new Limassol marina is 90 per cent completed

THE INTERIOR ministry is working on a civil partnership bill to regulate non-marital relationships, which will secure couples' rights and freedom to choose the nature of their personal relationships.

“The interior ministry is working on a bill that will accommodate civil partnership unions,” Interior Minister Eleni Mavrou said, responding to a question set by AKEL deputy Irene Charalambidou who wanted to know how far along the draft bill was.

Cyprus does not recognise any other form of cohabitation beyond marriage, but authorities started mulling the recognition of cohabitation rights in 2011 when a 93-year-old woman complained to the Ombudswoman after authorities refused to give her a widow’s pension because she had never married her partner of 67 years.

The couple had been living together since 1943 and had eight children together.

A civil partnership will protect partners and give them the same benefits and rights as married couples enjoy. 

Although members of parliament have on occasion discussed civil partnership, “in essence the issue… has not been discussed in parliament,” Charalambidou said. 

But deputies have started discussing the matter in the human rights committee in the context of homophobia, without getting into any detail on civil partnership, but rather focusing on “social behaviours on issues dealing with homophobia”.

What is clear to her is that society at large, and this includes the MPs, are divided on the matter of civil partnership.

“The people’s representatives in the House are part and parcel of this society and have their own perceptions and I’ve observed that on this particular issue, opinions are divided even within parties,” Charalambidou said, although she added that her own party stood in favour of civil partnership.

But a factor “that plays a substantial role in delaying a substantial discussion is that although we do not live in theocracy, anyone can understand the extent to which the Church intervenes in the island’s social and political life and so imposes its own viewpoints,” she said.

Case in point was the Church’s vehement response towards decriminalising homosexuality, which was thrown off the books in 1998.

The Church had fought hard against the move, but even in parliament deputies were conflicted. On that day, there were 44 MPs in the house and only six stayed behind to vote, former DISY MP Christos Pourgourides said during a 2011 discussion on gay rights.

“And imagine that was something we had to do!” Pourgourides had said. 

His point was the one that Charalambidou also alluded to, the fact that because civil partnership would enable same-sex couples to have a legally recognised relationship that in the eyes of the law would be as good as marriage, there is resistance.

The overwhelming majority of lesbian, gay and transgender (LGBT) people have reported being discriminated against. And Cyprus ranks close to the bottom of the list in LGBT rights, on IGLA-Europe Rainbow map that charts the legal human rights status of LGBT and intersex people.

But civil partnership is at any rate, a greater issue.

“[It] regulates matters between heterosexual and homosexual couples,” Charalambidou said. 

In the case of heterosexual couples, children borne out of wedlock are “vulnerable because there is no legal regulation, resulting in the partner having no legal rights, e.g..in a pension,” she said. 

And there are people who disagree with the notion of marriage or, for any other reason, do not want to marry, Charalambidou said.  “That is their right.”

At their end, the Cyprus-based Accept-LGBT said the fact that the interior ministry was mulling a civil partnership bill was a positive step for all couples regardless of sexual orientation that will regulate issues that partners need to deal with, including the guarantee of a pension, shared health insurance, or simply sorting out taxes. 

In the EU-27 block a total 16 countries have already secured same-sex couples’ rights, Accept said.

A further eight European countries offer gay couples the right to marry, with France and the UK moving towards legalising marriage for same-sex couples this year. 

For Cyprus, the civil partnership is “a first step towards recognising and safeguarding same-sex couples in Cyprus law and society in general,” said Accept’s Yoryis Regginos.

NOT enough suppliers of the indebted Orphanides Supermarkets chain have agreed with a proposal to take over management of some outlets aimed to secure the supermarkets’ ability to stay afloat, it emerged yesterday. 

The suppliers, led by supplier Cypra Ltd and Giorgos Georgiou, have formed a new entity Orphanides New Era in order to directly manage some outlets and, they hope, the supermarkets’ ability to meet their obligations.

But in order for the deal to carry forward, a number of suppliers collectively owed €50 million need to agree. As of yesterday, the figure came to only €20 million, Georgiou said in an announcement.

So Georgiou was forced to push a deadline back until this coming Tuesday for any interested suppliers.

Together, all suppliers – most of whom have stopped working with the chain – are owed €85 million, with the banks owed over €150 million in total. 

Cypra has secured a preliminary agreement with Orphanides supermarkets to continue to supply some outlets and manage them directly, continuing to employ the staff in those outlets under their standing terms of employment. 

Orphanides would get a return on the supermarkets revenue, that Georgiou claims would enable the chain to pay interest rate to the banks. The suppliers would be equal shareholders in Orphanides New Era, also receiving a return on revenue by exchanging their debt for shares.

“My motive is simple. I want to see us care for once for the greater good,” said Georgiou who has been co-ordinating the suppliers. 

“Even the most powerful of us are threatened by the catastrophic consequences from the …supermarket chain’s closure,” Georgiou said.

From the 23 supermarkets island-wide directly employing 1,100 people, only 16 branches would be part of Orphanides New Era but Georgiou could not be reached yesterday to say how many people would lose their jobs, how many suppliers had signed on and how many were left undecided. 

Georgiou previously said that there were 28 bigger suppliers owed over €500,000, and it is understood that hundreds of suppliers – big and small – worked with the supermarket chain. The cost to the economy from a chain closure has been placed to €400 million on some estimates.

Some 250 people have already been sent home and 11 branches have closed because they had no products to sell. 

And a former supplier, GR V North Fruit Ltd, which is in receivership, is trying to wind up the company. 

North Fruit has questioned the legality of Orphanides New Era given that they have already launched liquidation procedures against the chain. 

But Georgiou claims that the chain’s assets come to €140 million, which would all go to the banks in the event of closure. 

Suppliers “have no choice but to participate in this venture” he said during a meeting last week to discuss plans. 

Georgiou has appealed to all suppliers to get in touch and check out www.neaepohi.com (Greek only) for more information. 

THE commerce minister yesterday issued a decree putting a cap on the wholesale and retail price of milk that will come into effect on Monday.

The cap is €1.41 per litre for retail and €1.32 per litre for wholesale, including VAT, Commerce Minister Neoclis Sylikiotis said. 

The minister said the decree aimed at protecting consumers and local production, which would be affected by successive price hikes.

“With this intervention we fix prices at their current level and prevent knock-on hikes because of the four cent rise imposed by the cattle farmers and the assertion by the manufacturers that they would apply a nine cent rise, which we consider irrational,” the minister said.

The decree will be in effect for up to 45 days.

Cypriot consumers pay for the most expensive milk in the European Union, with prices also rising faster than elsewhere in the EU.

Almost two years ago, the cabinet approved a bill giving the commerce minister the right to set a ceiling on the prices of bread, water and milk.

Over 70 per cent of Cyprus’ cattle farmers are part of the cattle farmers' association (POA) which has exclusive agreements with some of Cyprus’ major supermarkets.

A new EU regulation that Cyprus should have implemented by early October states that milk producer groups in small markets – including Cyprus – can only represent 45 per cent of total production.

It is understood that POA is under investigation by the commission for the protection of competition.

Some were not sure the price cap would prove of use to consumers. 

The Cyprus Consumers & Quality of Life Union, said on Tuesday the move would backfire as retailers, who might currently be selling milk for less would likely begin charging the ceiling price of €1.41.

Currently a litre of semi-skimmed milk goes from €1.16 to €1.32 at supermarkets, although bakeries and kiosks are far more expensive, selling for as much as €1.40 and in the odd case even €1,50.

The Union said it has been receiving complaints from people across the country reporting soaring milk prices at stores in recent days. It also questioned whether the ministry had the resources to adequately enforce the price ceiling, citing the shortage of manpower.

Yesterday it said the ministry had in fact only satisfied the demands of those pushing for an increase in the wholesale price. The ministry had met those involved in that end, at least two or three times but had not once contacted any consumer group to hear their opinion.

‘Setting a wholesale price at €1.32 means consumers can no longer buy milk for between €1.10 and €1.32 as they can today," the Union said. And, prices were already heading towards the €1.41 ceiling, it added.

CENTRAL Bank Governor Panicos Demetriades yesterday said that Cypriot banks will need at most, less than €10 billion in rescue money, as he dismissed money laundering allegations as “greatly exaggerated.”

In an interview with the Associated Press, Demetriades said Cypriot banks would need at worst “less than €10 billion” in rescue money, but did not provide a specific figure.

Citing a reliable source, the Cyprus News Agency said the amount was close to €9.0 billion but negotiations were still ongoing.

Cyprus is currently engaged in discussions with its lenders and the company that undertook a due diligence on banks in a bid to adjust downwards the figure attached to the worst-case scenario.

Preliminary reports suggest banks will need anything between €7.3 billion and €10 billion.

Under the worst-case scenario, an assessment Cyprus hopes to avoid, the total bill for a bailout could rise to €17 billion.

A potential rescue bill of €17 billion, roughly equivalent to its entire economic output, has deepened concerns among EU partners about Cyprus’ debts, and some doubt it would be able to repay the aid without more concessions from lenders.

Demetriades told the Associated Press he “doesn’t share those gloomy scenarios” because they are based on worst-case assumptions of a deepening recession in Europe and beyond, that he said have little chance of happening.

“If the rest of the euro area is doing better, the chances of the adverse scenario materialising for Cyprus are less,” he said, adding that the country could rebound from crisis because of good growth prospects in such sectors as tourism, shipping and as a result of the recent discovery of significant natural gas deposits off its shores.

The Royal Bank of Scotland (RBS) said it expected Cyprus’ debt to GDP to exceed 140 per cent but did not think there would be a Greece-style write-down.

RBS however, believes that privatisations would be part of the deal to bailout Cyprus.

“For one, Europe wants to avoid PSI (Private Sector Involvement) in other countries so political efforts will be made to ensure debt is deemed sustainable, most likely through flexibility on the banking numbers,” RBS said in a report. “Meanwhile, a new reform minded Cypriot president after the February elections will likely agree to the troika’s privatisations demands. Avoiding a haircut is a ‘win-win’ for Cyprus and core Europe.”

RBS also suggested that the island’s natural gas reserves could turn Cyprus into a net international creditor in the long term.

“Debt dynamics from 140 per cent debt/GDP level can look scary but Cyprus is sitting on huge reserves of natural gas and potentially oil reserves too,” RBS said. “How much are these worth? Initial gas reserves discovered are likely worth 300 per cent of GDP. This could rise to 2,950 per cent GDP.”

Demetriades said Cyprus would move ahead with privatising state-owned companies if was deemed necessary to make its debt viable, despite political resistance at home, because it was part of the terms the country agreed in a draft bailout deal.

He said it was more likely to sell the telecommunications company CyTA than the electricity or ports authorities due to “national security considerations.” 

The governor also dismissed money-laundering allegations -- mainly stemming from Germany -- as “greatly exaggerated” and “fuelled by political considerations in other countries.”

“Cyprus has done as much as other countries in the euro area to combat money laundering and we are very serious about enforcing the legislation,” he said.

Meanwhile, the finance ministry said yesterday that Russia had, since the beginning of this month, removed Cyprus from a ‘black list’ of countries that Moscow discouraged investment in.

“Cyprus’ removal from the list further bolsters competitiveness in investments from Russia … and Cyprus’ reputation as a respectable international business centre,” the ministry said. Germany has come down hard on Cyprus in recent weeks over ‘dirty’ Russian money. Yesterday, Bloomberg reported that German Finance MinisterWolfgang Schaeuble told lawmakers in Berlin that Russia must participate in a euro-area bailout package for Cyprus. The island is in hock to Moscow for €2.5 billion. 

Schaeuble reportedly said the troika would have difficulty reaching an agreement without privatisation of Cypriot assets. The German minister also said officials were closely watching next month’s presidential elections. 

A MAN triggered a security scare in Nicosia when he walked into a central police station carrying a bomb he found in his driveway, saying he wanted officers to examine it.

Police said Petros Konafis, 33, a former footballer and now agent, discovered a suspicious device on the rear window of his car and after drawing a blank on what it was doing there, decided to take it to the Paphos Gate for further scrutiny by experts.

Police discovered it was a makeshift bomb which had failed to go off, triggering the evacuation of the complex.

It appears however that it was not until the arrival of the bomb squad that everyone realised what they had been handling.

“When they came we realised what the object was (and) we evacuated the building,” said Nicosia CID chief Erotocritos Erotocritou.

Police said the object was a "makeshift high intensity explosive" attached to a detonator and a fuse. 

It was defused on site by explosives experts. 

Reports said Konafis suspected the incident was linked to his professional dealings.

Police spokesman Andreas Angelides urged the public not to pick up any suspicious objects and notify the force immediately if they happen to find one.

A bomb expert at Paphos Gate police station By Christos Theodorides

THE CYPRUS Energy Regulatory Authority (CERA) yesterday decided to cancel the price increase imposed on energy bills by the electricity authority (EAC) on January 1 based on a recalculation of the fuel cost formula. 

CERA released an announcement saying it has instructed the EAC to suspend the fuel adjustment imposed after a rise in fuel costs last November was passed on to the consumer. 

The decision will come as good news to consumers who feared yet another hike in electricity prices, which are already some of the highest in Europe.  

Each month, the EAC adjusts its fuel cost formula - the major component of electricity bills. The electricity rate - kilowatt hour (kWh) - is the sum of the fuel cost plus the price of carbon credits.

Following the resumed operation of Units 4 and 5 at the Vassilikos electricity plant, the EAC bought greater quantities of diesel in November to power the combined cycle units, requiring more money and most likely more carbon credits. 

The authority passed on the extra cost to the consumer by punching the numbers into the existing fuel cost formula, resulting in a price adjustment from 6.9719 cents/kWh to 7.9361 cents/kWh, roughly translating into a 4.0 to 4.5 per cent increase on the final electricity bill.

The upward adjustment came into effect on January 1, 2013, though it had retroactive application, meaning all monthly and two-monthly bills issued in January for the last month or two months of 2012 would include the price hike. 

The ongoing economic crisis, rising unemployment, falling temperatures, a VAT increase to 18 per cent imposed last Monday, and another energy price hike made this month a perfect candidate to be consumers’ winter of discontent.   

Last week, CERA hinted it would re-examine the price hike, inviting the EAC for talks yesterday. 

Following the meeting, CERA released an announcement yesterday saying it has instructed the EAC to suspend the fuel adjustment, reverting to the 6.9719 cents/kWh rate. 

According to CERA, consumers who already received bills for November and/or December with the new price increase will have the difference subtracted from their next month’s bill.  

“This decision has immediate effect and will be passed on the EAC. It will also be published in the Official Gazette,” said CERA in no uncertain terms.

According to sources, the EAC was not even notified before CERA announced its decision.  

The regulatory authority said it took into account a number of factors when taking the decision, including the fact that Units 4 and 5 at Vassilikos are now back in operation. Both units are more efficient than the older power plants in Moni and Dhekelia, meaning the EAC gets more power for its fuel, even though they are powered by the more expensive diesel than heavy fuel. 

The operation of more efficient combined cycle units requires a review of the method used to make fuel adjustments to the benefit of the consumer, said CERA. 

The energy regulator also took into account the fact that international fuel prices fell in November 2012. 

Energy sources yesterday questioned why the regulator waited until now to suspend the adjustment, since the EAC has been implementing its fuel cost formula on a monthly basis for the past 30 years. 

The sources also argued that it was CERA’s job to change the formula if they were not happy with it, not the EAC which was obliged to carry out the normal adjustments. 

They further highlighted that while Units 4 and 5 were more efficient, Units 1, 2 and 3 were still out of action as a result of last year’s Mari naval base blast.   

Units 4 and 5 have a 220MW capacity each, though Unit 4 is not fully operational as of yet, and only operates at half-capacity. 

Units 1, 2 and 3, when operational, had a capacity of 130MW each.  

Meanwhile, cabinet yesterday appointed Charalambos Tsouris as the new EAC chairman, replacing the outgoing Haris Thrasou who recently announced his resignation.  

Tsouris was previously a board member of the telecommunications authority CyTA.  

COMMERCE MINISTER Neoclis Sylikiotis’ yesterday called on legislators and state officials not to let the troika have a say over the country’s hydrocarbon resources, indicating that the power struggle between the government and troika over natural resources has yet to be resolved. 

When the government announced reaching a preliminary agreement with the troika on an international bailout last November, President Demetris Christofias was at pains to stress the government’s hard-fought victory which ensured the troika would not have a hand in the management of Cyprus’ natural gas resources.  

However, based on what came to light yesterday, it became clear that the matter was far from over. 

Sylikiotis recently tabled a bill before parliament to set up a national hydrocarbon fund, which he hopes to deposit over €200m in revenue from the signature bonuses expected after the completion of negotiations to award five new blocks in Cyprus’ exclusive economic zone to international energy companies.  

The minister argues that failure to set up the company in time would mean any money made from awarding licences would have to go directly into state coffers and end up being used to pay the country’s many debts, instead of being invested in infrastructure to develop Cyprus’ hydrocarbons industry. 

According to the preliminary agreement with the troika, the government is obliged to “undertake a study on the financial aspects of the transition towards the exploitation, use and export of natural gas, as a first step in the formulation of a comprehensive development plan for the rearrangement of the Cypriot energy sector.”

It is also expected to “prepare and adopt legal steps enabling the establishment of a resource fund, which should receive and manage the public revenues of offshore gas exploitation”.

The international lenders say the fund needs to benefit from “a solid legal base and governance structure, drawing on internationally-recognised best practices” if it is to ensure transparency, accountability and effectiveness. 

Regarding the inflow and outflow of money, the fund’s management should give due respect to: the need to develop the hydrocarbon industry, including the necessary infrastructure; the importance of bringing Cyprus' public debt on a steady downward path; and the need to invest for future generations. 

As a first step, the government was obliged to submit its draft legal framework “for review” by the troika taking into account international best practices, as well as a detailed action plan within the second quarter of 2013.

Around 11 days ago, the finance ministry sent the commerce ministry’s legal proposal to set up a resource fund to the troika. 

It appears the troika was not happy with the contents of the bill. 

According to yesterday’s Alithia, the troika informed the finance ministry that the proposed legislation violated the terms of the memorandum of understanding with the government.  

The paper reports that the troika was not convinced the bill ensured transparency in the management of the national hydrocarbon fund and failed to follow international practices. The international lenders allegedly asked the finance ministry to block the bill’s approval until consultations  were completed.  

Speaking to the state broadcaster, Sylikiotis yesterday confirmed that Finance Minister Vassos Shiarly had received an email from the troika, which he has yet to see. 

He questioned how the newspaper got its hands on an email that he was not even informed about.  

“The email went to the (finance) minister and then to his officials. Shouldn’t the relevant minister (himself) have been informed? Who leaked it to the press? I requested an investigation into the matter and the finance minister agreed.”  

Sylikiotis further berated Shiarly for seemingly listening to what the troika had to say. 

“Yes, not only did he give the wrong answer to the troika, but he should have insisted that there is no word in the memorandum which specifies we need their agreement before tabling a bill,” said an irate Sylikiotis. 

“The state should have the power to exercise its sovereign right to develop the necessary infrastructure,” he said. 

He urged parliament to vote the hydrocarbons fund bill as soon as possible. 

The minister questioned the wisdom of those within the finance ministry and parliament who were interpreting the terms of the memorandum in a way which gives the troika power over the country’s management of its natural resources. 

Commerce Minister Neoclis Sylikiotis is furious the media knew before he did

PRESIDENT Christofias said that he had asked the European Commission for the financial assistance of the banks to come directly from the European Stability Mechanism (ESM). This request was included in a letter he had given the President of the European Commission Jose Manuel Barroso during their meeting last Friday. 

In the letter Christofias proposed that at least the amount the banks had lost as a result of the haircut of the Greek government debt – in the region of €4.5 billion – should be financed directly by the ESM rather than through the state. Such an arrangement would reduce the state’s financial assistance requirements and make the debt sustainable, but it is a long shot as the ESM would not be dealing with bailout applications that were made before it came into being in September 2012. 

If Christofias could persuade the Commission to bend the rules it would be a big success, but the likelihood is that he will not and his request will simply serve as an indirect admission of one of his biggest mistakes – his consent to the Greek haircut at the European Council meeting of October 2011, without seeking special dispensation for Cyprus’ banks as Greece had done for its own banks. He had gone to the Council meeting without consulting the then Central Bank governor, ignoring the latter’s requests for a meeting, because they had fallen out. Now, more than a year later, it has finally dawned on him that Cyprus’ banks, should have been protected from the effects of the haircut as Greece’s were.

This is not the only disastrous blunder he eventually acknowledged. The Central Bank which, on instructions from the government, went out of its way to maximise the banks’ financial assistance requirements is now trying to persuade PIMCO - the US consultancy firm it hired to establish the amount – to lower the re-capitalisation figure. The state broadcaster said PIMCO’s figure was €9 billion, but the Central Bank was attempting to lower it in an attempt to make the debt sustainable. What were the governor and his advisors thinking when they were discussing with troika’s representatives the methodology and assumptions that would be used by PIMCO? The assumptions and methodology the committee agreed, would ensure the re-capitalisation needs would be at a maximum.

The government’s and the Central Bank’s policy of exaggerating the financial needs of the banks has proved the disaster many wiser heads had been warning, but it seems too late to put things right now. Leaving things too late and becoming wise after the event have been the key features of Christofias’ disastrous rule. 

THE CABINET yesterday approved new immovable property tax (IPT), which exempts property of up to €40,000 at 1980s values, but also scrapped the tax-free threshold.

This means that if a property was worth €50,000 at 1980 levels, the tax will be charged on the full €50,000 and not just the €10,000 difference. 

The bill, which will be submitted to parliament today, is in line with a preliminary bailout agreement and could fetch the government some €120 million in 2013.

The government expects to collect at least €90 million, meeting its obligation to international lenders, it said.

Speaking after the cabinet meeting, government spokesman Stefanos Stefanou said this was essentially a transitional tax since the state must update values in 2014 to be in line with current market prices.

According to the bill, properties worth up to €40,000 in 1980s values would not be taxed.

Stefanou said around 262,000 people and some 8,500 companies would not have to pay. “This means that 76.9 per cent of property owners will not pay property tax,” said Stefanou. 

"The price of real estate throughout Cyprus has mushroomed since 1980, For statistical purposes, on average, real estate values  have increased seven or eight times over. So when we talk about a house worth €40,000 in 1980, its current value will be around €300,000, maybe more depending on the exact location. But the government’s effort was to ensure that the largest percentage of average homeowners would be tax-exempt,” he added.

According to the new rules, properties worth more than €40,000 and up to €120,000 will be taxed at a rate of 4.0 per thousand on the full amount, without subtracting the tax-free €40,000.

This means that around 61,800 owners, 18.45 per cent of people will pay between €257 and €480 per year, Stefanou said.

From then on: between €120,001 up to € 170,000, the tax rate will be 8.0 per thousand, an average of €1,127 and a maximum of €1,360 per year. Stefanou said this would affect 1.6 per cent of property owners.

At the next stage – properties worth between €170,001 and €300,000, the tax rate will be 12 per thousand, which will affect around 3.657 owners who will have to stump up on average €2,592 to a maximum of €3,600 per year.

For properties worth between €300,001 and €500,000, the tax rate will be 15 per thousand, affecting 998 owners who will pay on average €5,580 with a maximum set at €7.500 a year.

Some 315 owners whose properties are valued between €500,001 and € 1.0 million will pay 18 per thousand, or on average €12,000 with a maximum of €18 000.

Those who have properties worth more than €1.0 million will be taxed at the rate of 20 per thousand.  Around 35 people with properties worth up to €3 million will be affected, Stefanou said with the tax per annum coming to €28 000 on average and a maximum after of €60 000 a year.

The tax will be applied on the total value of the property in someone’s name.

Previous draft legislation, scrapped after an uproar by hoteliers and other large property owners, had taken the 1980s value and applied the consumer price index – around 3.5 per cent – before calculating the new tax.

It provided that the first €150,000 would be tax-free. From then on: €150,001- €500,000 coefficient of 6.0 per thousand, €500,001- €1,000,000 coefficient of 8.0 per thousand, €1,000,001 and above coefficient of 10 per thousand.  

Most people won't have to pay the new tax says government

CYPRUS Popular Bank's Greek unit will cut its branch network and staff numbers this year as part of efforts to reduce operating costs to cope with the country's deep recession, it said yesterday.

Popular, Cyprus's second-largest bank, was nationalised in mid-2012 after its capital base took a severe hit from a writedown in Greek government debt where it was heavily exposed.

The bank's Greek unit launched a voluntary retirement scheme in December, aiming to reduce staff numbers by 400 by the end of January, which will help to cut payroll costs by 12 per cent.

Last year its Greek subsidiary cut its network by 42 branches to 132 which helped reduce costs by 15 per cent. The bank is targeting further savings of 20 per cent this year.

The Cypriot state now owns about 84 per cent of Popular. The bank bailout forced Cyprus to seek financial aid from its EU partners and the IMF.

Bank of Cyprus, the island's biggets lender, said on Tuesday it had cut staff in Greece by 300 people through a voluntary exit programme and expected to reduce its payroll by 12 per cent this year.

CYPRUS AND Oman signed a memorandum of understanding (MoU) yesterday on bilateral political consultations. 

Omani Foreign Minister Yusuf bin Alawi bin Abdullah came to Cyprus on a one-day visit, becoming the first Omani foreign minister to do so, meeting in the process his Cypriot counterpart Erato Kozakou Marcoullis and President Demetris Christofias. 

The two ministers discussed a number of issues, including developments in Syria, as well as hydrocarbon exploration in Cyprus’ Exclusive Economic Zone (EEZ).

“We have all the desire to further take our relations forward and there are a number of areas in which we can work together,” said the Omani minister, referring to the desire for the Omani Sultanate to enhance its infrastructure.

Marcoullis said the visit constitutes a milestone in bilateral relations. 

Referring to the MoU signed, Marcoullis said: “It marks the beginning of a new era in our relations, setting the basis for further cooperation and mutual understanding in the political sphere, conducted through a sincere and constructive dialogue.”

Last April, the Sultan of Oman, Qaboos bin Said al Said, holidayed with a large entourage in a Limassol hotel, reportedly leaving a €3,000 tip for the staff and gold watches for the hotel’s managers.

According to reports, the Oman leader stayed almost a week at the luxury Le Meridien Hotel in Limassol, taking over the fourth and fifth floors of the hotel after arriving in a 200-strong delegation in two private Boeing 747s. 

After a tour of Europe, he returned to Limassol in the summer, en route to Oman, resulting in the police chief ordering an investigation after it transpired officers at Larnaca airport had accepted money and gifts from the Sultan without declaring them.

According to reports, Qaboos bin Said al Said wrote out a cheque for several thousand euros for airport police, while higher-ranking officers also received Rolex watches.

The Omani sultan rose to power after overthrowing his father, Said bin Taimur, in a palace coup in 1970. His aim was to end the country’s isolation and use its oil revenue for modernisation and development. The 72-year-old sultan is well known for his generosity.

INTERNATIONAL Monetary Fund head Christine Lagarde said yesterday the bailout package between Cyprus and the troika has not been completed yet because there were clearly financing issues that needed to be resolved in order for a programme to be accepted and for the debt to be sustainable.

 Lagarde was speaking at IMF headquarters in Washington.

 Asked to comment on reports from Brussels and Nicosia that the Europeans did not want the IMF to participate in the programme and why two months after the statement issued in November there has not been a deal yet between the troika and Cyprus, Lagarde said the IMF had been engaged with the troika on Cyprus.

 She said the IMF “sent a mission on the ground and we had a dialogue with the Cyprus authorities”. The “building blocks of a programme had been put together, she said.

“The programme “has not been concluded because there are clearly financing issues that need to be resolved in order for a programme to be accepted and for the debt to be sustainable”.

QUESTIONS remained yesterday over precisely what deal the government had struck with international lenders – the troika – on the management of future proceeds from natural gas.

Around 11 days ago, the finance ministry sent to the troika the commerce ministry’s draft law for a national hydrocarbons fund that would manage gas revenues.

But according to daily Alithia, the troika was not happy with the contents of the bill. The paper said the troika informed the finance ministry that the proposed legislation violated the terms of the memorandum of understanding (MoU) with the government.

The troika was allegedly not convinced the bill ensured transparency in the management of the national hydrocarbons fund and failed to follow international practices. The international lenders reportedly asked the finance ministry to block the bill’s approval until consultations were completed.

It has since been confirmed that Finance Minister Vassos Shiarly did receive an email from the troika. Sylikiotis complained he had not seen the message, and questioned how the newspaper got its hands on an email that he was not even informed about.

Appearing on the state broadcaster on Wednesday, an irate Sylikiotis suggested that through the finance ministry’s mishandling of the issue, the troika would get to have a say in the management of the island’s gas revenues. This, he warned, would impinge on the country’s sovereignty and place the management of the revenues under the approval of the troika.

But yesterday Sylikiotis said his remarks were misunderstood. He never intended to imply that the finance ministry had adopted the troika’s position, he said.

“The Finance Ministry responded [to the troika] that it would study the matter. This does not mean that they are adopting the troika’s position. It is one thing to study something, and quite another to adopt it,” he said.

Under the preliminary agreement with the troika published in November, Cypriot authorities are to “prepare and adopt legal steps enabling the establishment of a resource fund, which should receive and manage the public revenues of offshore gas exploitation.”

Regarding the inflow and outflow of money, the fund’s management should give due respect to: the need to develop the hydrocarbon industry, including the necessary infrastructure; the importance of bringing Cyprus' public debt on a steady downward path; and the need to invest for future generations.

As a first step, the government was obliged to submit its draft legal framework “for review” by the troika taking into account international best practices, as well as a detailed action plan within the second quarter of 2013.

“For review” is the operative – and contentious – phrase. Sylikiotis insists this should be interpreted as merely briefing the troika on the resource fund, and not asking for its permission.

Sources in the government told the Mail that nothing has changed since the preliminary agreement was struck with the troika. Questions over apparently differing interpretations of the MoU should be addressed to the commerce minister, they said.

Sylikiotis could not be reached for comment.

The same sources said it is their understanding that by June this year parliament must pass a law governing the resource fund on hydrocarbons. As agreed with the troika, any revenues from gas would not go to the recently-formed state hydrocarbons company (KRETYK).

Because gas revenues are not expected for many years to come, they cannot be included in the budget and as such have been designated as “extra revenues” for the state. That’s why parliament will pass legislation specifying how the revenues are managed once they start flowing.

The sources said also the law would spell out the respective percentages of the revenues for paying off the public debt, for investing in energy infrastructures and for savings for future generations.

It was their understanding that the lion’s share of revenues would go toward servicing the debt.

Moreover, any law passed here would be sent to the troika for “review,” the sources said, without elaborating.

In a related development, the House Finance Committee yesterday denied releasing €1m for the initial share capital of KRETYK.

MPs of ruling AKEL and EDEK wanted to release the cash, but they were outvoted by deputies from DISY, DIKO and the Greens.

Sylikiotis had issued a plea to lawmakers to release the funds so that KRETYK could start operating. Failure to do so, he warned, would delay negotiations with Noble Energy and put on ice broader plans for infrastructures to exploit Cyprus’ gas.

The government and the opposition have been locked in a tug of war over KRETYK; they claim that Sylikiotis hoodwinked them in establishing the company without consulting them.

The government’s request for the €1.0m will be revisited at the next session of the House committee, which will however, convene after the presidential elections and a new government takes office.

POLICE SPOKESMAN Andreas Angelides yesterday highlighted the dos and don’ts for those who unexpectedly find themselves face-to-face with an explosive device. 

He urged members of the public not to attempt to move any explosive devices they may find, and certainly not to bring them to a police station.

Dangerously close to stating the obvious, Angelides made his plea after a man triggered a security scare in Nicosia on Wednesday when he walked into a central police station carrying a bomb he found in his driveway. 

Petros Konafis, 33, a former footballer and now agent, discovered a suspicious device on the rear window of his car and after drawing a blank on what it was doing there, decided to take it to Paphos Gate police station for further scrutiny by experts.

Police only discovered it was a makeshift bomb which had failed to go off after the bomb squad arrived on the scene, triggering the evacuation of the complex.

The object was a "makeshift high intensity explosive" attached to a detonator and a fuse.

It was defused on site by explosives experts.

Speaking to state broadcaster CyBC yesterday, Angelides said Wednesday's events could have ended tragically. 

“All the elements were there, explosive material, a fuse, detonator. By moving it, this could have caused an explosion, risking the death and serious injury of those next to or near the device,” he said. 

“Our policy has always been whoever finds something and wherever it is, you don't move it under any circumstances. You inform police immediately. We have a very specific action plan for such incidents, to cordon off the area at a great distance, and wait for the bomb squad to arrive, examine the scene and take decisions,” he added. 

The police spokesman dispensed even more critical advice for the unfortunate soul who finds themselves staring at an explosive device: they should definitely call the police but not before moving away from the suspect device first. 

“You do not use a walkie-talkie or even a mobile phone next to the device. You call the police, but always from a distance,” clarified Angelides.

JUST SHY of a year after a man was murdered, police showed up in his home with a court writ relating to an assault charge, stunning his mother who could not understand why they were looking for a man whose murder they were meant to be investigating.

Lawyer Demetris Pavlides said the tearful mother showed up in his office this week, distraught that authorities wanted to charge her son in a 2009 assault case that she thought had closed prior to his death in February last year.

Her son, 22-year-old Andreas Papadopoulos, was shot dead  and found in his car’s passenger seat in the early hours of February 4,  2012 after a member of the public found his parked car outside a house on the outskirts of Nicosia. The head of Nicosia police headquarters Kypros Michaelides said at the time that “the specific person” (Papadopoulos)  was known to the police.

Papadopoulos was already in the system relation to a police investigation on the 2009 assault of a special forces’ conscript. Papadopoulos, along with two others, faced assault charges but the state’s legal services had suspended prosecution before Papadopoulos’ murder, Pavlides said.

“Obviously they had since received new evidence and decided to re-open the case but how could the police, the legal services, the prosecutors, not know that he [Papadopoulos} was dead?”

The police ought to have pulled up Papadopoulos’ file, which should have shown he was murdered, Pavlides said. “Don’t they have lists, don’t they have computers?”

“How many people get murdered each year, anyway? Is it possible that the police did not know?”

The latest death statistics available to the Cyprus Mail show that four people were murdered in 2010, 17 in 2009 and nine in 2008.

At any rate, what seems to be the case is that whoever drew up the indictment papers was not aware of the murder case, though exactly how that came to be will be subject to investigation, police spokesman Andreas Angelides said yesterday.

But asked how it was even possible to charge a dead man, Angelides said that the police archives are not connected with other services. 

“We are looking into computerising data bases – both within the force and with external services – so that this does not take place again, resulting in the creation of a negative image,” Angelides said. 

It was not clear yesterday how the police could have filed indictment papers without first pulling out the man’s file, which should have shown he was murdered.

Angelides said that the investigation would show how the blunder came about.

The police does not have computerised access to warrants issued by the courts, and auditor general Chrystalla Georghadji said in her 2011 report that police would often go looking for people at the wrong address. 

And there are difficulties implementing already digitised systems within the police, Georghadji said. She said that although the force’s warehouses obtained a computerised system in 2006, only three from the police force’s 26 departments had fully digitised their entries and some departments were still in early stages.

In general across state services, even computerised services are not fully functional, Georghadji said. 

DISY leader Nicos Anastasiades will be the next President of the Republic, whether or not a runoff ballot is necessary in next month’s general elections, the latest CyBC-commissioned poll has confirmed.

Anastasiades, who is officially endorsed by the DISY and DIKO parties, garnered 38 per cent of preferences – a huge lead over AKEL-backed Stavros Malas with 23.7 per cent. Independent presidential candidate Giorgos Lillikas got 20.4 per cent.

The previous iteration of the poll, released in December, gave Anastasiades 37.1 per cent, Malas 23.1 per cent and Lillikas 20.4 per cent.

Meanwhile the percentage of “undetermined” votes stood at 15.8 per cent, compared to 16.3 per cent in December.

The percentages on election day are calculated based on valid votes alone. Factoring in the effect of the undetermined votes on the actual results on February 17, the number-crunching projected 42.3 to 47.9 per cent for Anastasiades, 25.6 to 30.8 per cent for Malas, and 21.0 to 25.8 per cent for Lillikas.

The million-dollar question is whether these elections will be decided on the first Sunday, which would require Anastasiades to get at least 50 per cent of valid votes cast.

But 72 per cent of respondents feel a second round of voting will be necessary, with just 22 per cent thinking otherwise.

Still, Anastasiades would win out in all second-round scenarios: in a showdown with Malas, 43.8 per cent would opt for the DISY chief and 29.9 per cent for the AKEL man.

Against Lillikas, Anastasiades would have the support of 41.1 per cent, while his opponent would lose out at 31.8 per cent.

In the unlikely event of a second-round contest between Lillikas and Malas, the former gets 31.0 per cent and the latter 26.9 per cent.

Irrespective of who they intend to vote for, most respondents believe that Anastasiades will prevail (61 per cent), compared to 13 per cent for Malas and 10 per cent for Lillikas.

The survey showed also that interest in the elections will grow the closer we get to D-Day.  Fifty-seven per cent said they are very/quite interested in the elections, compared to 49 per cent in December. And almost 70 per cent are positive or fairly certain whom they will vote for, while 22 per cent are still dithering.

Anastasiades moreover got the best scores when respondents were asked to rate the candidates. He was picked as the best-equipped to negotiate a bailout with Cyprus’ international lenders, getting 39 per cent, compared to 20 per cent for Malas and 14 per cent for Lillikas.

The DISY leader is also deemed the most capable of “promoting Cyprus’ interests abroad” and as having the “most correct stance regarding the bailout.”

It was not all good news for Anastasiades, however: 33 per cent of those polled said they would not vote for him under any circumstances. Still, on this count, the worst score went to Malas with 38 per cent, with Lillikas faring far better at 17 per cent.

A significant find was the increasing support for signing a bailout, with 57 per cent in favour (definitely/probably), compared to 54 per cent recorded back in December. However, 35 per cent believe Cyprus should not conclude a deal with the troika.

Lastly, 71 per cent of respondents said they were not satisfied with President Christofias’ handling of troika issues, with just 23 per cent stating otherwise.

Carried out by CMR Cypronetwork, the poll covered the period 3 to 13 January and used a sample of 1404 respondents from across the island.

NICOLAS Papadopoulos yesterday resigned his position as vice-chairman of DIKO, citing his publicly-avowed disagreement with the party’s endorsement of the candidacy of Nicos Anastasiades for president.

In a written statement, the son of former President Tassos Papadopoulos said the move was a “political act of disagreement with the decision to back Mr Anastasiades.”

He went on to clarify that he was not leaving DIKO, noting that he would retain his position as party cadre and MP.

“When last September the Central Committee of the party took its decision on the upcoming presidential elections, I had clearly voiced my disagreement, but I also said that I respected that decision. I also stated that during the election campaign I would act according to my conscience and dignity, without causing my party any trouble.”

In essence, Papadopoulos appeared to be saying he would not sabotage the campaign to elect Anastasiades, but would not support it either.

Responding to the announcement, DIKO said it “respected” Papadopoulos’ decision.

But in a thinly-veiled criticism of the move, it added: “In these critical times, all those who choose to serve other priorities must take responsibility for their actions.

“The content of his letter speaks for itself. The party’s organs shall deal with this,” the DIKO statement said.

DIKO spokesman Fotis Fotiou told newsmen that Papadopoulos’ move “ was neither a bombshell, nor something that we expected.”

In September last year, Papadopoulos made an impassioned plea to DIKO delegates to reject Anastasiades and endorse independent George Lillikas instead.

In his speech, Papadopoulos sought to stoke the fires with a damning indictment of Anastasiades, openly questioning the DISY leader's patriotic credentials.

And in November he sent an SMS to a number of DIKO cadres who had served as ministers in the administration of his late father.

In the SMS, Papadopoulos berated these DIKO members for joining the effort to elect Anastasiades: “I consider it unseemly, if not obscene, for you, as ministers of Tassos, to exploit for personal profit the man [Anastasiades] who insulted and fought Tassos.”

Papadopoulos is seen as putting distance between himself and the party leadership under Marios Garoyian, which has chosen to throw in its lot with Anastasiades.

A significant portion of DIKO people are said to be unhappy with the decision to join forces with DISY in the elections.

Commentators say Papadopoulos will use this disaffection to run on an anti-Anastasiades plank in contesting the leadership of DIKO, which holds an electoral congress in May.

DEPUTIES yesterday rejected the cabinet’s new immovable property tax (IPT) rates, opting instead to postpone discussions on the grounds that more time was needed to study the provisions in depth.

The government wanted the bill approved before Monday, when eurozone finance ministers are scheduled to discuss the island’s bailout bid.

The bill, approved by the cabinet on Wednesday and submitted to parliament earlier yesterday, is in line with a preliminary bailout agreement and in theory it could fetch the government some €120 million in 2013.

The government requested the bill to be classified as urgent, meaning parliament would have to discuss and vote on it immediately.

However, the government’s request was rejected by majority vote – 31 to 17 with only ruling AKEL voting in favour. There were no abstentions. 

Main opposition DISY deputy chairman Averof Neophytou stressed that despite the postponement, a clear message must be sent to international lenders that parliament remained committed to approve additional property tax after the necessary time was given to lawmakers to study the bill.

“We do not have all the information before us,” Neophytou said during the lunchtime session.

DIKO’s Nicolas Papadopoulos echoed Neophytou in that parliament remained committed to passing a tax bill, adding too that more time was needed to “examine the bill in depth.”

 EDEK MP Giorgos Varnava felt the need to stress that this should not be interpreted as an attempt to protect privileged groups.

AKEL however, accused the opposition of trying to postpone discussion until after the presidential elections mid February, although House President Yiannakis Omirou said efforts would be made to put the issue back on the agenda and call another session before the elections once some discussion had taken place at committee level. 

Nicos Katsourides, the party’s parliamentary representative accused his colleagues of hypocrisy. ‘In all the years I have been an MP, whenever an IPT bill came to parliament it ended up being shredded to pieces,” he said, adding that under the provisions it was clear that 78 per cent of all property owners would not be affected by the new tax. Wealthy property owners on the other hand, would be. 

Addressing his opposition colleagues, Katsourides pointed out that no one had expressed any concerns when parliament hastily passed a batch of austerity measures in December that involved tax and other hikes affecting the man in the street. 

Katsourides said the opposition’s intention was clear: “to not discuss the bill before the presidential elections. “If your intentions are honest then come back in one week,” he added.

The bill exempts property of up to €40,000 at 1980s values, but also abolishes a tax-free threshold, which means assets above that amount would be taxed on their full value.

It provides that properties worth more than €40,000 and up to €120,000 will be taxed at a rate of 4.0 per thousand on the full amount, without subtracting the tax-free €40,000.

From then on: between €120,001 up to € 170,000, the tax rate will be 8.0 per thousand; for properties worth between €170,001 and €300,000, the tax rate will be 12 per thousand.

For properties worth between €300,001 and €500,000, the tax rate will be 15 per thousand.

Owners whose properties are valued between €500,001 and € 1.0 million will pay 18 per thousand and those who have properties worth more than €1.0 million will be taxed at the rate of 20 per thousand.  

The tax will be applied on the total value of the property in someone’s name.

Earlier in the day the bill was discussed at the House Finance Committee. 

Inland revenue boss Giorgos Poufos and permanent secretary of the interior ministry Andreas Assiotis made it clear to deputies that even a small change would throw off the state’s calculation designed to bring in €120 million.

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