NOBLE ENERGY has pushed back the start of appraisal drilling in its Block 12 offshore concession in Cyprus’ Exclusive Economic Zone (EEZ), raising questions as to whether it will get the data it needs on the size and quality of hydrocarbon reserves before its current licence expires in October 2013.
Speaking to the Sunday Mail, Energy Service director Solon Kassinis yesterday appeared confident that not only would the US company get the ball rolling before its licence runs out this October, the subsequent drilling operations will provide a much-needed boost to the local economy.
The daily barrage of speculation about the level of public debt Cyprus will assume has wiped the smile off many faces on the island, but the one area seen as a silver lining in a gloomy indebted future is the burgeoning hydrocarbons industry.
Since negotiations with the troika began for an international bailout, President Demetris Christofias has said on a number of occasions that in the not too distant future Cyprus will be able to pull itself out of economic misery by exploiting the “gift” of its natural resources.
In December 2011, after drilling an exploratory borehole, Noble Energy announced that the ‘Aphrodite’ well in its Block 12 concession held an “estimated gross resource range of 5 to 8 trillion cubic feet (tcf), with a gross mean of 7 tcf”.
However, in recent weeks, commentators have expressed concern at delays in the second ‘appraisal’ well Noble will drill to ascertain the size and quality (and commercial potential) of the Aphrodite discovery, arguing that delays in developing Cyprus’ natural gas industry mean delays in the island’s economic recovery.
Plans were afoot to start a second drilling next month, however this was pushed back to April. In recent days, Noble informed the government that the April deadline also will not be met, with no new date set for work to start on the appraisal well
Kassinis yesterday rejected allegations of unnecessary delays, saying: “I assure you Noble is trying as fast as possible to get started.”
He argued that Noble and the energy service have already evaluated around 20 tenders announced in relation to auxiliary services needed to get the drilling going. Another five are at the stage of evaluation. 
“Noble evaluates the tenders under our auspices, because (the costs) are recoverable and we are the main shareholders. Every week we have meetings on this,” he said. 
The tender process for the rig that will drill the appraisal well closed three months ago. The rig is currently working in the sizeable Leviathan field in Israel’s EEZ, and due to a series of problems experienced 34 per cent ‘dead time’.
“These things are normal in this industry,” said Kassinis, adding that one had to factor in bad weather, difficulties in deepwater drilling etc.
The energy service chief further argued that as a result of the tenders process, work has already started in Limassol on the various auxiliary services Noble will be looking to buy in connection with the drilling.
“Before, these services were purchased abroad. Now, they’re being offered in Cyprus. Work has already begun on a mud plant in Limassol, to produce mud for the drilling,” he said, adding that other related infrastructural works to host vessels that will be connecting with the rig were also underway in the coastal town.
Kassinis said that he was trying to acquire drilling data from another company that drilled a first well in the Israeli offshore field neighbouring Block 12. The Israeli concession shares the same underwater hydrocarbon structure as the Aphrodite field, meaning that extraction of gas from the same reserve will take place on either side of the line joining the EEZs of Cyprus and Israel. 
“We will evaluate their data as well so we are going to have three wells and data and a much more secure picture,” he said.
Commerce Minister Neoclis Sylikiotis said the fact Israel and Cyprus were drilling side by side made the conclusion of a unitisation agreement between the two countries, setting out clearly who does what, imperative. 
Asked if he was concerned about the delays in the second well, Sylikiotis said: “I am concerned, and pushing, but they (Noble) do act and work towards that direction. I hope it will happen by June, but I don’t control the weather, or the ‘dead time’ of the rig when problems arise.”
Regarding the prospect of Noble failing to make any progress before its licence expires in October, he said: “I hope it won’t reach that. Nevertheless, if the study is going very well, cabinet could give an extension of one or two months.” 
Sylikiotis noted, legally, if the licence expires and Noble hasn’t met its obligations, the state would be within its rights to award the licence elsewhere.
However, the minister expressed confidence that Noble will get the job done in time simply because they had to. He suggested that awarding licences to energy giants Total, ENI and Kogas, for another five blocks in Cyprus’ EEZ (which will likely be signed by the end of the month) would provide competition for Noble regarding who will get natural gas from the underwater reserves and into pipes heading towards Limassol first.
Also, whoever gets the gas out of the well first has a greater say in the construction and operation of the planned liquefaction plant at Vassilikos.
The minister told the Sunday Mail that in the meantime, Cyprus would follow an interim solution of importing natural gas from abroad for three to five years.

Commerce Minister Neoclis Sylikiotis and energy chief Solon Kassinis said yesterday they were not concerned about the drilling delays

THE DISCOVERY of natural gas is a “once in a lifetime opportunity to get it right” for Cyprus, according to one leading international economist.
Despite the doom and gloom scenarios, the island could still get out of this quagmire, balance its budgets, educate its people in the required fields and create a prosperous society with a competitive economy, said the World Bank’s Augusto Lopez-Claros during a talk in Nicosia on Monday.
Cyprus has a lot more going for it today - EU membership and infrastructure- than South Korea or Singapore had decades ago before they set out to become hugely successful and advanced economies, he said. 
However, overcoming today’s problems requires a common vision, an end to political bickering, and implementation of that vision, said Lopez-Claros, who was in Cyprus this week to give a seminar to Central Bank staff.
Lopez-Claros became the director of global indicators and analysis at the World Bank in March 2011.
Previously he was chief economist and director of the Global Competitiveness Programme at the World Economic Forum in Geneva.
Before joining the Forum he was an executive director with Lehman Brothers (London), and in the early 1990s the International Monetary Fund’s resident representative in Russia.
He is a much-sought-after international speaker, having lectured in the last several years at some of the world’s leading universities and think tanks.
On Monday night, he gave a talk to a small group of leading business people in Nicosia on Cyprus’ place and its potential as an international hub of doing business.
Lopez-Claros spoke about the current problems in the integrated global economy, noting that today’s financial crisis is different from that experienced after World War II when public debts exploded.
Today countries belonging to the “West” have an ageing population, with pension and health funds putting pressure on fiscal accounts.
Climate change is another factor that will put tremendous pressure on fiscal budgets, said the leading economist, noting that the economic crisis took away the focus from climate change in the last few years, which was “valuable time wasted”.
Regarding the eurozone’s problems, Lopez-Claros rubbished the notion of a “magic number” for a sustainable public debt, noting that in 2007, Spain’s public debt was at 35 per cent, much lower than that stipulated in the EU’s so-called Maastricht criteria.
“Forget about this magic number,” he said.
Lopez-Claros urged countries to adopt the Chilean model of fiscal control, where fiscal policy calls for annual budget surpluses. Chile now has a public debt of 5 per cent.
Balancing the budget and creating surpluses allowed the country to set aside vast resources in a special fund. So when Chile suffered a devastating earthquake in 2010, Chileans reconstructed the country within 18 months, noted the World Bank director.
All countries need to make serious fiscal adjustments in the coming years to bring down debt and confront an uncertain world. This would free them from bondholders and paying millions in interest. Instead, that money could be spent on education, he argued.
In an increasingly “integrated and hypercompetitive global economy”, international companies are looking for an educated yet relatively cheap labour force and a legal framework that’s not bogged down by too much red tape.
Lopez-Claros highlighted that Cyprus does not fare well on the red tape criteria. It takes 733 days to enforce a contract through the courts in Cyprus. In Singapore, it takes around a fifth of that time. Specialised commercial courts could significantly reduce the time needed, he said.
The cost of registering property in Cyprus is also very expensive, and considered a disincentive for investment, he said.
The international economist noted that the Report on Doing Business in Cyprus put the country’s ranking lower than that of Georgia, Latvia, Estonia and Lithuania.
Speaking before energy and telecommunications officials, Lopez-Claros referred to the ongoing debate on privatisations, saying: “Come on. It’s the 21st century.”
He also referred to the “parochial political debate” in Cyprus, driven by a lack of political unity or will to implement the measures that could make Cyprus “the next Singapore in Europe”.
He called on citizens and leaders to go beyond party politics, integrate intelligent women into decision-making processes and work hard towards an agreed vision.
On the prospects of natural gas, Lopez-Claros said Cyprus has “a once in a lifetime opportunity to get this right” and ensure that the hydrocarbons fund set up to manage energy revenues provides a stable anchor for future generations. The country could get it wrong like Nigeria, or do it right like Norway, he said.
Asked what steps Cyprus should take to become competitive again, he said Cyprus needs to balance its budget and- emulating the culture of transparency in Scandinavian countries- explain to the public what it is doing and why.
A second step would be to create links between universities and companies in the fields of education and training to ensure graduates integrate easier into the economy.
Thirdly, the country needs to work on the investment climate and prevailing regulatory framework, with an emphasis on the lengthy judicial system.

 

DISTRICT court judges yesterday argued before the Supreme Court that they should be exempt from salary and benefit cutbacks because their earnings are protected under the Constitution.
The judges are en masse appealing a government decision in 2011 that cut wages across the public sector by a small percentage.
They argue that the pay cut was in violation of Article 158 of the Constitution which states: “The remuneration and other terms of employment of any judge cannot be changed unfavourably for him after his appointment.”
The article was intended to safeguard the independence of the judiciary from political tampering; it is said that, without this protection, legislators would be free to ‘penalise’ judges for rulings that are not to the former’s liking.
The judges’ appeals are directed against items of legislation passed in late 2011 as part of an austerity package that included reductions to the salaries of state officials, among others.
In court yesterday, the judges reiterated their proposal that, instead of taking a mandatory pay cut, they would make a voluntary contribution from their salary to the state.
The judges said their offer would stand irrespective of the court’s ruling.
It’s understood that their proposal would still give the judges an advantage over the rest of the public sector workers, as their pension and retirement bonus would be based on their original salary; their voluntary contribution would not be taken into account for this purpose.
Moreover, the lawyers representing the judges said their demand for exemption does not breach the principle of equality under the law for all citizens, since the issue at hand does not pertain to taxation - which should be equal for all - but rather to remuneration for one’s services.
In this way they hope to counter the state’s expected argument that cuts are being imposed under the ‘law of necessity’ which, according to the Attorney-general, trumps questions of constitutionality.
Speaking to newsmen after the court adjourned, Attorney-general Petros Clerides, who represents the state in the dispute, said he had yet to decide his rebuttal.
The ‘law of necessity’ was one of his options; another would be to argue that tax burdens are justified in times of financial crisis.
“To us, an independent judiciary is a cornerstone of democracy and we shall certainly defend it. But we should not confuse the issues,” he said.
“We do not believe that this [cutting judges’ salaries] undermines the independence of the judiciary.”
Clerides will be delivering his rebuttal on Monday.

HEALTH minister Androula Agrotou yesterday said she was concerned over the fact that two underage boys who were in Cyprus until the summer carried the HIV virus unbeknown to authorities.
It emerged yesterday that the boys were not in the system because they were diagnosed abroad, Agrotou said.
The person who brought the issue out into the open was Stella Michaelidou, who heads KYFA, a Limassol-based non-governmental organisation that supports HIV/AIDS carriers and works on prevention.
After local media extrapolated an HIV/AIDS problem in schools, Michaelidou clarified that the two boys were non-Cypriots and non-EU citizens who left the island in the summer so they could receive treatment at home.
One boy, 16,  was diagnosed with HIV about three months ago, Agrotou said. “We have taken action with the boy’s school,” she said though she would not go into any details as to how the boy became  infected, citing the need to safeguard his privacy.
Agrotou also confirmed KYFA’s claim that there was another minor boy – now an adult – who was infected about two and half years ago.
Doctors in Cyprus are obliged to inform the health ministry of all new HIV virus diagnoses, Agrotou said.
People are then given treatment options and can have specialised care at Gregorios clinic in Larnaca hospital.
Agrotou said that she was concerned that there may be AIDS carriers who live in Cyprus but have not been diagnosed by authorities and so are not known to the health ministry.
“I’ve spoken with Ms Michaelidou to arrange a meeting so we can work together,” Agrotou said referring to KYFA’s action as a support centre that may bring it in touch with individuals who have not been diagnosed at home.
Cyprus is placed among countries of low prevalence of HIV infection, according to UNAIDS, the United Nations’ programme on HIV/AIDS.
“Due to the long asymptomatic phase of HIV infection, it is expected that some persons who have been infected are not aware of the fact and remain unreported for a certain period of time,” UNAIDS said in its 2012 report on Cyprus.
A total of 735 people were diagnosed with HIV in Cyprus between 1986 and 2011 and 118 have died. This includes about 349 non-Cypriot nationals, 256 of whom do not live on the island.
Some 49 people were diagnosed last year, 54 were diagnosed in 2011 and 41 in 2010.
Five people died from AIDS in 2011 and at least five people died last year, health ministry officials have said.
There are health education programmes in place at schools and other population groups, including sexual education lessons for children in the first year of Lyceum, usually aged 15.
Cyprus has subscribed to the UN goal of zero new infections or AIDS-related deaths by 2015.

AN urgent appeal for donations to help needy families living in Paphos villages has been made by a group of volunteers.
More than 250 families living outside the boundaries of Paphos municipality are in desperate need of help, as without it they will go hungry. Paphos has been hardest hit by the wave of unemployment.
The municipality,  in conjunction with a social welfare committee programme, are doing all they can to help those in need, but they are unable to help those living in the outlaying villages, as they are outside municipal boundaries. Instead, they are passing on details of those who need assistance to a group of volunteers who are doing their best to provide desperate families with food and clothing.
Local businesswoman Pavlina Patsalou heads up the group. “The situation is becoming increasingly difficult, as the numbers are growing and we really need the help of the public,” she said.
The volunteers started the programme around 18 months ago, helping around 20 families. This number has now mushroomed to more than 250 and is increasing on an almost daily basis.
“We are helping those in villages which Paphos municipality cannot because they are living out of their area. We have many people of all nationalities, mainly families, who are in desperate need of help. We give them whatever we can,” said Patsalou.
The aid available includes clothes and blankets as well as food.
“Some people don’t even have enough money to buy a loaf of bread. If they are unable to come to us to collect items because they don’t have transport or money for petrol, we will take the parcels to them,” Patsalou added.
The volunteer said that they were also giving powdered milk for babies, and nappies, and any other food they could, but need the public and local businesses to rally round and offer support.
“We are trying hard to help these people and approach whoever we can think of who could offer assistance. Papantonios supermarket has helped a great deal and we will have a drive at Carrefour in Paphos on Saturday, which we hope will be a success,” Patsalou added.
Between the hours of 9am-1pm, the volunteers will be at Carrefour to explain to shoppers about what they are trying to do. “They will also be able to purchase €5 coupons to help feed the needy,” she said.
“I decided to try and help because I have strong feelings for people in these situations. Most of them have ended up like this as they have lost their jobs because of the economic climate. It’s affecting the entire community and some families don’t have money to feed their children, it’s terrible.”
A spokeswoman for social welfare confirmed they could nto help, given the boundary issue. “But Pavlina, along with a group of volunteers is doing this. We pass on any information about those in need to her and she helps them.
We are all working together to try and ease some of the immediate pressure of those who are in a desperate situation.”
The spokeswoman said the programmes were for  genuinely needy  who have no food. “It’s not for people who have an income. We are currently updating our records and we have close to 1,000 applications for help,” she said.
“We have to make sure that the food aid is going to those who really need it. After we have updated our records we will have the information as to exactly how many individuals and families in Paphos are without food and in need of urgent help.”
Patsalou said the volunteers were collecting all sorts of non-perishable staples such as, rice, pulses and tinned goods, and baby food.
“We are so grateful when people show their support. These are difficult times for everyone but every little bit helps to feed those who would otherwise go without,” she said.
Daily donations of food and clothes are being accepted at  Pavlina Children’s Clothes shop from 9am-7pm.
Contact Patsalou at 99 220 152.

GREEK Cypriots and Turkish Cypriots have become less prejudiced, more trusting of each other and more willing to live together in the ten years that the checkpoints have been open, studies have shown.
The University of Cyprus’s Haris Psalitis gave a talk yesterday – aired live on state broadcaster’s Proto Radio – to commemorate the roughly ten years since the checkpoints first opened allowing Greek Cypriots and Turkish Cypriots to become reacquainted.
On April 23, 2003 thousands of Greek Cypriots and Turkish Cypriots crossed at two checkpoints, mostly through the Ledra Palace and Pergamos, following an announcement by the ‘TRNC’ they would be letting people through for day visits.
 It had been 29 years since the Turkish invasion of 1974, which isolated the two communities.
But since 2003, about 7.5 million crossings have occurred from the Greek Cypriot side and 13.5 million from the north.
There are now seven checkpoints: the Ledra Palace and Ledra Street checkpoints in Nicosia for pedestrians, Ayios Dhometios in Nicosia, the Ayios Nicolaos and Pergamos in the British sovereign base areas, and the checkpoints at Astromeritis and Limnitis that lie between Nicosia and Morphou.
A consequence of the location of the checkpoints is that more people cross in Nicosia than do Greek Cypriots living in the coastal cities, Psaltis said.
And although Greek Cypriots go to the north to visit Churches and to see their property, Turkish Cypriots mostly come over to shop, he said.
But has opening the checkpoints helped improve the relationship between the Turkish Cypriots and the Turkish Cypriots? Does contact with the ‘Other’ facilitate the peace process?
The short answer is yes. But there will be people, especially Greek Cypriots, who will not go to the north because they do not want to tacitly acknowledge the ‘TRNC’ or support it financially, or because they find the notion emotionally difficult, Psaltis said.
However, “crossing is not the same as having contact,” he added.
For example, though Greek Cypriots may visit their homes and go to the north on a religious pilgrimage, many reported in a study completed in 2011 that they did not have any contact with Turkish Cypriots. And though most Greek Cypriots or Turkish Cypriots have crossed at least once, Turkish Cypriots tend to go to the other side more often than the Greek Cypriots, Psaltis said.
And whereas one in three Turkish Cypriots reported having at least one Greek Cypriot friend, only 15 per cent of Greek Cypriots could say the same, Psaltis added.
Nonetheless, Greek Cypriots tend to become more trusting and less prejudiced of Turkish Cypriots once they get to have contact with them, even more so than what international studies would expect, he said.
And both sides, become more trusting and come away wanting reunification as a result of their contacts, he added.
During a discussion coordinated by Psaltis’ colleague, Nizayi Kizilyurek, people shared their experiences and posed questions.
One Greek Cypriot woman said that contrary to what she keeps hearing people say, back when Turkish Cypriots and Greek Cypriots lived together, the two groups actually kept to themselves even then.
Psaltis pointed out that collective memories differ on this point. Turkish Cypriots remember being isolated from Greek Cypriots, whereas Greek Cypriots remember a time of close friendship.
 “We should think about why this is,” he said.

The first day the Ledra Palace opened on April 23 2003

THE NUMBER of Greek Cypriot refugees seeking compensation for occupied properties in the north has increased by almost 30 per cent – nearly 1,000 new applications - in the last six months alone, showing an upward trend that has caught the attention of Cyprus’ Legal Service.
Attorney-general Petros Clerides plans to hold a broad-based meeting after the presidential elections to deal with the increasing number of Greek Cypriot refugees applying to the Immovable Property Commission (IPC) in the north set up by Turkey.
According to the IPC website, as of last Monday, 4,471 applications have been lodged with the Commission, of which 309 have been concluded through friendly settlements and nine through formal hearing.
The IPC has so far paid £100.7m sterling (€120m) to the applicants as compensation for giving up their property rights in the north. It has only ruled for exchange and compensation in two cases, for restitution in one case and for restitution and compensation in five cases.
In one case it has delivered a decision for restitution after the settlement of the Cyprus problem, and in one other case it has ruled for partial restitution.
Just six months ago, on July 12, 2012, the IPC had recorded a total of 3,473 applications, 260 friendly settlements and seven formal hearings.  Around £81m Sterling (€102m) had been paid out to applicants in compensation.  The 998 new applications since last July represent a 29 per cent increase, a considerable hike for IPC figures if one considers the Commission was set up by Turkey in 2006.
In a letter published by Alithia yesterday, Clerides told the mayor of occupied Famagusta and leader of the municipalities’ union, Alexis Galanos, that the issue of Greek Cypriot properties in the occupied areas was probably the most important aspect of the Cyprus problem.
The AG sent the letter on January 10, in response to a letter seven days earlier from Galanos, requesting a meeting of all stakeholders to discuss possible recourse to the European Court of Human Rights (ECHR) and ways to discourage refugees from applying to the IPC, which they are doing in increasing numbers.
In his response, Clerides agreed with Galanos on the need to do something about the increased number of applications to the IPC and the smaller sums awarded in compensation to Greek Cypriots for giving up rights to their land in the north.
The AG said he would convene a broad-based meeting of all stakeholders after the elections to find ways to handle the unfolding situation.
Clerides noted that after the landmark 2010 ECHR decision in the Demopoulos case, the Strasbourg-based court “effectively overturned” previous case law, making things much harder for Greek Cypriot refugees who since then are forced to go via the IPC to pursue their property rights in the occupied areas.
The Committee of Occupied Local Communities has also asked the government and future president, whoever that may be, to take measures to better the economic situation of refugees and limit their flow to the IPC to “sell their country”.
Speaking to reporters on Monday, committee chairman Andreas Petrou said the deepening economic crisis has seen numbers to the IPC increase.
He called for an immediate review of refugee policy with the input of economists, legal experts and technocrats, and guided by politicians. Failure to do so will result in Greek Cypriots applying en masse to the IPC to sell their properties in the north.
Petrou suggested the government set up a fund to compensate all owners of land in north for loss of use of property on an annual basis. He proposed charging rent to those currently in hold of Turkish Cypriot properties south of the dividing line as a means to provide resources for the fund.

PRINCE Harry is currently in Cyprus for a much needed alcoholic drink on his way back to Britain from his twenty week deployment to Afghanistan as an Apache helicopter pilot. It is common practice and part of the vital recovery program for British soldiers returning from Afghanistan to spend a few days in Cyprus as part of the ‘decompression’ procedure.
The Prince’s return was revealed via Twitter by Major Laurence Roche, a spokesman for Task Force Helmand in Afghanistan. “Prince Harry heads home from Helmand. Next: 2 days'"decompression" in Cyprus & a well-deserved first alcoholic drink in five months,” The Major tweeted. According to the Daily Telegraph the Prince left the war-torn country on board a regular personnel aircraft and joined other UK-bound troops on their way home via Cyprus.
Soldiers usually have a 24-hour stopover at a British base on their way home, to wind down and sink their first beer after many months in active service. They are reportedly given four cans of lager and can go swimming, surfing and sunbathing on the beach.
The compulsory stop also gives the servicemen and women time to reflect on their experiences and prepare themselves for returning to life in the UK.

THE government will fight to prevent the privatisation of public companies, the spokesman said yesterday, although it was clear that the matter was out of their hands since a bailout agreement was expected after February’s election, which the ruling party is not tipped to win.
“We will fight for the non-privatisation of semi-state organisations even if some people in Europe consider privatisations a part of the structural reforms of the economy,” Stefanos Stefanou said. “This is what various people say (but) we do not accept this position.”
The government insists it managed to avert privatisations during negotiations with international lenders.
A preliminary deal however, states that “if necessary to restore debt sustainability, the Cyprus authorities will consider a privatisation programme for state-owned and semi-public companies.”
The sustainability of Cyprus’ debt will be determined, it seems, by the total amount needed for recapitalising the island’s Greece-exposed banks.
There has been no final decision on that yet, but it appears that Cyprus’ EU partners have already decided that privatisations are necessary.
The draft memorandum provisionally assessed bank needs as an amount up to €10 billion, though officials expect eventual needs to be less. Fiscal requirements until 2016 are between €7 billion and €7.5 billion.
Stefanou said there were ways to avoid privatisations if the debt was deemed unsustainable.
“It is known that we support and will continue to support direct bank recapitalisation from the European Support Mechanism,” Stefanou said.
That however, would be unlikely, at least for the time being, and EU paymaster Germany has already signalled it wanted privatisations but not immediately.
German Finance Minister Wolfgang Schaeuble said Monday it appeared impossible to reach agreement with President Demetris Christofias, given his opposition to privatising state-owned bodies.
The Europeans’ apparent support for main opposition DISY leader Nicos Anastasiades, the frontrunner for the presidency, has provided his opponents with valuable weapons.
Ruling AKEL said yesterday there should be no doubt that electing Anastasiades, ‘the leader of neo-liberalism, austerity and privatisations’, meant the lenders having a natural ally in the presidency.
Anastasiades yesterday denied he was pro-privatisation.
“We never adopted the privatisation of profitable semi-state organisations,” he said. “Our position is clear; the people who are committed on the privatisations must stop blaming their decisions on others.”
Anastasiades said he would look into alternative ways to see how the government’s pledge could be tackled in the event the debt was deemed unsustainable.
Meanwhile, the management and workers of telecommunications company CyTA – a prime candidate for privatisation – are closing ranks to fight against any decision to sell off the organisation.
“CyTA stakeholders fully realise the gravity of the moment and agree that the objective, amid critical developments, is to secure the future of CyTA,” a news statement said. “Unity and understanding form the framework for joint action and coordinated response.”

LISTENING to the comments made by European finance ministers with regard to Cyprus, before and after Monday night’s Euro group meeting, two things were clear. First, they were exasperated with the grandstanding by Cyprus’ communist rulers who had gone back on the agreement they made with the troika and could bring new instability to the eurozone. Second, despite recognising the urgent need to have the memorandum of understanding finalised, they consider the Christofias government so untrustworthy they would rather wait for the new government to sign it.
This was why the ministers decided that the memorandum would be signed in the second half of March. There would be a new president in place and whoever he is, he would certainly be more reliable and trustworthy than Demetris Christofias, who has proved incapable of grasping the seriousness of our situation and has used the bailout as an excuse for populist rhetoric – first he was fighting to save CoLA and the 13th salaries while now he is defiantly resisting attempts to privatise semi-governmental organisations (SGOs), something he had agreed to by accepting the draft memorandum. Then there were his commerce minister’s sneaky attempts to enact laws relating to hydrocarbons, without informing the troika as had been agreed.
Christofias will not have to put his signature on the memorandum, but his crude stalling tactics, exemplified currently by the failure of the Central Bank to agree a figure for the financing needs of the banks with Pimco - the consultancy firm it hired – have brought on new problems. We now have to contend with the money-laundering allegations that started in Germany and that other European countries are now expressing concerns about. Now there is talk that the measures against money laundering will be monitored until March to ensure they were being enforced. Assurances from an untrustworthy government that all measures are being enforced are not believed in Europe.
All the problems we are facing have been self-inflicted – it is this government that exaggerated the problems of the banks, failed to cut spending despite its written commitment to the EU, dragged its feet over the memorandum and now refuses to implement what it had agreed to. Now, everyone knows that the debt would be unsustainable, even if the Central Bank persuades Pimco to lower the bank recapitalisation figure by half a billion euro, which is why EU finance ministers stress the need for the privatisation of the SGOs. The money from their sale is the only way to make the debt sustainable.
We know that this is inevitable, but the government is still playing its populist games. The government spokesman yesterday declared the government would carry on fighting to save the SGOs until its last day in office. Is it any wonder our partners have given up on us until there is a new government in place?

CYPRUS’ financial problems could still derail fragile confidence in the euro zone that the bloc fought hard to regain in 2012, European Central Bank board member Joerg Asmussen said yesterday.
His comments follow doubts whether the island, with gross domestic product of barely 0.2 per cent of the euro zone's output, was large enough for a potential default to unsettle the 17-nation euro zone, such a risk being a precondition for a bailout.
"Disorderly developments in Cyprus could undermine progress made in 2012 in stabilising the euro area. Cyprus could well be systemic for the rest of the euro area despite its size," Asmussen said.
"Under normal circumstances one would expect the direct impact of a default to be limited, and it's obvious that without assistance the country will default," he told Reuters, but added the situation was not normal.
"At the same time we should recognise that the situation is not normal. Even though the promise of the OMT (ECB bond-buying) and other important decisions have calmed the markets, this situation is still fragile."
Charles Dallara, Managing Director of the Institute of International Finance (IIF) also warned policymakers against complacency when dealing with Cyprus.
“I would have thought we would have learned a powerful lesson from Greece that the relative or absolute size of an economy sometimes is irrelevant when it comes to its potential impact on the euro zone and indeed global markets,” he said.
Among those to question the potential impact of difficulties in Cyprus is German Finance Minister Wolfgang Schaeuble, who has said repeatedly it was not yet clear "the problems in Cyprus could be a danger to the euro zone as a whole".
"We have to (establish) that very clearly as that's what the (ESM) treaty says and we do need to stick to the rules we agreed in the treaty," Schaeuble told reporters after the Eurogroup meeting on Monday.
But Asmussen said Cypriot problems could affect twice-bailed-out Greece through banking channels and send a negative signal to the rest of the euro zone, especially harming the outlook for states trying to regain full access to the markets.
Concerns have centred on allegations from some states that Cypriot banks may be misused for money laundering and tax evasion, a view Cyprus rejects. Asmussen said monitoring and addressing such issues needed to be included in a bailout.
During Monday’s meeting, Finance Minister Vassos Shiarly was at pains to address the money-laundering concerns, submitting documents showing that Cyprus was implementing all relevant EU regulations. A number of his eurozone counterparts, however, seemed unconvinced, warning that the issue must be settled before the signing of a bailout agreement.
Outgoing Eurogroup President Jean-Claude Juncker said the EU would be closely monitoring the legal framework on combating money laundering in Cyprus, until the deal is signed.
And French Finance Minister Pierre Moscovici said the Eurogroup expects the troika and the Cyprus government to sign a programme that contains a clause on money laundering.
Cyprus repudiates the claims.
Government spokesman Stefanos Stefanou spoke yesterday of “expediencies and interests arrayed against Cyprus” on its natural gas and Russian businessmen’s deposits in the island.
“It’s obvious that Cyprus is under attack from certain quarters with regard to so-called money-laundering here,”  Stefanou said.
Those same quarters are for their own reasons seeking to raise new issues “through the back door,” he added.
He suggested a scheme is being hatched to scare away Russian investors so that they take their cash elsewhere. "The European Union should display solidarity towards a member state, which is essentially a victim of a European decision. Let us not forget the (losses on Greek bonds) was a European decision, and Cyprus is today paying the price,” he added.
News reports in Germany in recent days said at least four Eurogroup finance ministers were expected to ask for a mission to Cyprus to examine money laundering allegations.
The idea, Schaeuble’s brainchild, is said to be backed by the finance ministers of Austria, Finland and the Netherlands.
The latest assessment by the Financial Action Task Force (FATF) on combating money laundering revealed that, on the basis of the number of areas in full compliance, Cyprus ranks 7th out of 17, whereas Germany ranks close to the bottom, at 14th, ahead of Greece, Slovakia and Luxembourg.
Press reports said the experts to be sent to the island would zero in on the actual implementation of anti-money-laundering regulations, since mere ratification of EU directives was not enough.
However it was not clear yesterday whether Schaeuble did in fact table the proposal during Monday’s Eurogroup meeting, as press reports had suggested would happen.
As widely expected, the Eurogroup did not reach decisions on Cyprus’ request for a bailout, given that the total amount the island needs has yet to be determined. That’s because an assessment of the banks’ capital requirements is still pending.
It was also made abundantly clear that concluding a bailout deal has been pushed back to March.
Juncker said that targeting the agreement within a timeframe after February’s presidential elections in Cyprus would better serve the national ownership of the financial adjustment programme, given the fact the country has given assurances it can cover its monetary needs.
The sentiment was shared by Olli Rehn, European Commissioner for Economic and Monetary Affairs and the Euro. “The Commission has been working closely with the ECB and the IMF to finalise a financial assistance programme with the Cypriot authorities,” Rehn said.
“Building on the useful discussion we have just had, we will continue this intensive work in the coming weeks with a view to facilitating the necessary decisions by the Eurogroup in the course of March.”
Earlier on Monday, Schaeuble said it appeared impossible to reach agreement with the current administration in Cyprus, given its opposition to privatising state-owned bodies.
Privatising state assets would become necessary should Cyprus’ debt ratio exceed 120 percent of GDP, rendering the debt unsustainable under IMF criteria.
Stefanou yesterday reiterated the state would fight privatisations but Shiarly said: "We have to be sensitive to the issues which may arise in other member states. We are the applicants, they're the lenders, we have to be sensitive to their own issues," he told reporters in Brussels. "Therefore, if they say 'January', January; if they say 'February', February; if they say 'March', March. We have the ability to manage our fiscal requirements. We are strong and we can manage it."

Government spokesman Stefanos Stefanos

CONSTRUCTION work stopped across the board yesterday during the first day of an islandwide strike over job losses and insecurity in the sector. 

The strike is due to continue today, while the unions have not ruled out extending it indefinitely.

Unions SEK, PEO, and DEOK, have assigned patrols which have been going round construction sites looking for strike-breakers, SEK’s Yiannakis Ioannou said.

PEO issued an announcement bashing contractors who were  “hurting employers, their conquests and their families”.

People are being fired and are getting replaced by “cheap labour”, PEO said. 

The numbers show that Cypriots have been the least affected from all workers in the construction industry despite the unions’ claims that “cheap labour hands” were replacing Cypriots, the federation of building contractors’ associations (OSEOK) said yesterday in an announcement.

The unions have taken issue with the roughly 10,000 workers in their sector who hail from the EU, and are not part of collective agreements that guarantee better benefits for employees. 

Most construction workers are Cypriots and in total the sector employs about 46,000. 

And in 2008, the labour ministry stopped issuing work permits to third-country nationals who were seeking employment in the construction sector, which safeguarded jobs for Cypriots and EU workers. 

Although the number of EU workers has not risen over the last few years, there are about 6,000 people who are unemployed and the unions are pushing for stricter control of who gets to work in the industry. 

The sector has been one of the hardest hit sectors and many businesses within the industry were vulnerable constituting an extended strike dangerous, OSEOK said.

Meanwhile, the spokesman for ruling party AKEL Giorgos Loucaides said his party was supported the strike.

Builders demonstration

THE investors association (PASEHA) yesterday demanded the resignation of the Popular Bank chairman, accusing him of allowing the lender’s legal adviser to also represent a flagging supermarket chain that owes the bank millions.

PASEHA said Pambos Ioannides was acting as Popular’s legal adviser while at the same time he was retained by the Orphanides supermarket chain.

“This unacceptable act is indicative of how the bank got to this point and the new board chairman, Mr Andreas Phillipou’s, inability to accept that such actions hurt the shareholders’ interests,” PASEHA said in a written statement. “The challenges faced by Popular are huge and it is obvious that Mr Phillipou cannot perhaps tackle them, thus we call on him to resign.”

Popular, the island’s second-largest lender, was nationalised in mid-2012 after its capital base was severely hit by a write-down in Greek government debt, to which it was heavily exposed.

PASEHA also censured the “inconceivable fact” of Ioannides represented Popular in meetings about the financials of a company he also represented.

Orphanides is currently struggling for survival with a debt to the Bank of Cyprus and Popular amounting some €140 million, and around €100 million to other creditors.

ODDBALL presidential candidate Costas Kyriakou, aka Outopos, was on a roll on Wednesday, using the ‘F’ word while telling Cypriots why they should vote for him.

But for the bad language, he’ll be getting off scot-free, it seems.

Donning his trademark bandana – which he says is to prevent headaches – the 54-year-old career candidate appeared on Sigma’s noon news show urging the public to support him en masse.

This was to ensure against electoral fraud, he said.

Outopos claims that in the last three presidential elections he has consistently received around 70 per cent of the popular vote, but has been ‘cheated’ of victory.

The real results, he says, were concealed in a massive cover-up perpetrated by the political system working in cahoots with a corrupt media.

Official election data show he has never gained more than 1 per cent of the vote.

Outopos called on voters to be extra vigilant this time round: “Don’t vote for me like a**holes,” he declared.

A bewildered news anchor promptly asked him to be more careful with the language.

Outopos next explained why he was running for the top job: “I want to become a dictator. I wish to rule as dictator to bring order to the chaos. I’m a dictator-in-waiting.”

Later in the day, he pulled a similar caper during a live programme on the state broadcaster showcasing the so-called ‘minor’ candidates.

Revisiting the issue of election fraud, Outopos called on citizens to rise up in revolt should the results be tampered with on February 17.

Clenching his fist, Outopos demanded from his public: “Gamate tous ta kerata.”

From Greek, the expression literally translates as “F*** their horns,” but really means “give them hell!”

Again, the host urged the presidential hopeful to be more civil, to which Outopos reacted with a sheepish smile.

A self-professed communist, Outopos’ ideology is a mix of Marxism, Aristotelian philosophy and – one suspects – selected ideas from the ‘Zeitgeist’ movie.

The farmer-author studied philosophy in Thessaloniki.

But is he in hot water for the vulgarity? It doesn’t look like it.

For his remarks on CyBC, there is little the Broadcasting Authority can do. That’s because, due to a legal foul-up, the body currently has no authority over the CyBC, except when it comes to commercials.

What of the comments on Sigma? Head of Broadcasting Authority Andreas Petrides told the Mail that they would look into them.

“Using a swear word does not automatically lead to a fine against a channel. It depends on the circumstances. When it’s a live show, we tend to be more flexible,” Petrides said.

According to Petrides, this is hardly the first time the ‘F’ word has been heard on Cypriot television.

So in this respect at least, Outopos is no trailblazer.

THE POLICE force’s practice of holding trans women in men’s holding cells on the rationale they “only want to be women but are men” has prompted a non-governmental organisation to file a complaint on the grounds of discrimination.

A Nicosia court last Saturday remanded three women, in connection with running a brothel following a police raid on Friday night.

The police referred to one of the women as a “transvestite man” rather than a trans gender female – based on information on her ID that said she was male. They were adamant the term was correctly applied when the Cyprus Mail asked for clarification. 

The police then placed her alone in a cell at the men’s block.

The Cyprus-based non-governmental group ACCEPT, which deals with issues pertaining to lesbian, gay, bisexual and transgender (LGBT) people, visited the woman this week.  

“A complaint is due to be filed (today) with the Ombudswoman,” ACCEPT’s Despina Michaelidou said.

During their visit, ACCEPT was told that the police would continue to hold trans women in the men’s holding block because “they are men who want to be women, but are still men since this is what the official documents say”.

ACCEPT was allowed a five minute conversation with the woman in a non-private space.

The police allegedly said the time limit was imposed to limit the interaction of the woman with male prisoners “since it would not be correct for them to see women here [in the men’s holding block]”. 

Despite the fact that the woman in question did not wish to take the issue any further, ACCEPT has called for police to be trained on how to treat trans-gender persons, and to keep people in cells based on the gender they identify with. There are various reasons for this, from protecting people from physical or verbal harm to being sensitive to a person’s emotional and psychological health, ACCEPT said.

And people have the right to define their gender for themselves, the NGO said.

The interior ministry will not let trans people change their names or gender on their official documents unless they have opted to have genital reconstruction surgery, ACCEPT said, adding that this violated people’s rights by intervening with their lives on various levels.

“Trans people include those with a gender identity that is different from the gender they were assigned at birth. These includes, among many others, transsexual and trans gender people, trans men and trans women, transvestites, cross-dressers, no-gender, liminal-gender, multigender and gender-queer people, as well as intersex people who relate to or identify as any of the above,” said ACCEPT’s Michaelidou.

THE government has asked the Church to mediate so that a loan application to Russia is viewed favourably, Archbishop Chrysostomos said yesterday.

The archbishop said he had been asked to seek the help of the Russian Church with the Russian government.

“We are always at the disposal of the government … anything the Church can do it always does with pleasure since it here to serve the people and the country,” Chrysostomos said, adding that the Church had done its duty.

The government had applied to Russia for a €5.0 billion loan in a bid to avoid resorting to the European support mechanism.

Russia has so far declined to give Cyprus the money although on Wednesday Prime Minister Dmitry Medvedev signalled that it may do so under certain conditions.

"(Russia may give another loan to Cyprus) only in the case we are confident that economic decisions, which are made by the European Union, are met, and in the case when our European partners also give something to Cyprus," Medvedev told Bloomberg TV on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland.

Cyprus has already borrowed €2.5 billion from Moscow.

The government has asked Russian authorities to extend repayment of the loan by five years.

Earlier this month, Russian Finance Minister Anton Siluanov said his country was prepared to loosen the terms under which Cyprus had to repay the loan.

Cyprus applied for financial aid last June but some eurozone states like Germany are uneasy about bailing out a country they say lacks financial transparency. 

The bailout is estimated at around €17 billion, equal to the entire output of the Cypriot economy.

Government spokesman Stefanos Stefanou said those attacking Cyprus were after its role as a very significant, international financial and investment centre.

“It is obvious that behind these attacks there are selfish interests,” Stefanou said.

THE Debenhams Avenue store in the middle of Nicosia’s Makarios Avenue will shut down, an announcement confirmed yesterday. 

The brief announcement cited “commercial and financial reasons” leading to the decision to shut down the store as part of restructuring efforts. The flagship Debenhams Central store, also on Makarios avenue in Nicosia, will continue working as normal. 

“Efforts are being made to absorb a number of the (Debenhams) Avenue employees,” the announcement said. No further comments were made. 

A closing down sale on the premises of what used to be Debenhams Avenue is due to start today. Clothes will be sold at discounts of up to 80 per cent.

THE health minister has ordered an investigation into a complaint that doctors at a state hospital had wrongly diagnosed a woman as having had a miscarriage, it emerged yesterday.

Health Minister Androulla Agrotou said there would be disciplinary action if it was determined beyond any doubt that offences had been committed in this and two other unrelated cases currently under investigation.

Twenty-six-year-old Maria Stylianou, in her eighth week of pregnancy, lodged a complaint after she was told by doctors at the Makarios hospital on Tuesday

that she had had a miscarriage.

“She (the doctor) was absolute about what she was saying,” Stylianou told Sigma television. “She announced it was a miscarriage.”

Stylianou said she left the hospital distraught but was later convinced to visit a private gynaecologist who ascertained there was nothing wrong with the embryo.

Agrotou said yesterday she had ordered an investigation into the case, which must be completed by the end of this month.

The minister said she spoke to the woman “to express her sympathy for the inconvenience she went through and to clarify certain things.”

Agrotou said two other investigations were underway about complaints regarding the Makarios hospital Gynaecology and Obstetrics Clinic.

The minister declined to say whether the two complaints concerned the same doctor.

Asked about the delay in investigating the two cases, reported last summer, the minister said she gave instruction for the process to be expedited.

THE GOVERNMENT sealed a deal yesterday granting an Italian-Korean joint venture a concession to drill for hydrocarbons in three offshore blocks.

Three separate agreements, one for each of the prospects, were signed on behalf of the government by commerce minister Neoclis Sylikiotis and finance minister Vassos Shiarly.

The three blocks (2, 3 and 9) licensed to the ENI-KOGAS consortium lie north of a gas field that holds an estimated 5 to 8 trillion cubic feet of natural gas.

“The discovery of hydrocarbons...creates new realities and prospects for transforming Cyprus into a regional energy hub,” Sylikiotis said at the signing ceremony.

“Today we are taking yet another decisive step toward realising the hopes in our people for a new path toward prosperity, progress and peace in our country and the region,” he added.

ENI Vice President for Eastern Europe, Valerio Bracaccia, said industry officials recognised that the waters between Cyprus, Lebanon and Israel to hold much promise in terms of gas deposits.

Sylikiotis said a signing fee of €150m would flow into state coffers. That’s good news for the cash-strapped government, which only has enough money to pay salaries until March, when it hopes to secure a financial rescue package from the European Union and the International Monetary Fund.

Officials here have been arguing in their negotiations over the country’s bailout that gas proceeds will help secure the country’s longer-term public finances.

They hope such revenues can be viewed as a financial guarantee, easing the need for Cyprus’ creditors to impose harsher conditions in exchange for the bailout loan of up to €17 billion.

The first concession period will run for three years, with an option to renew for two more; under the agreement, the licensee relinquishes 25 per cent of the area of a prospect after the first period.

The respective percentages for Cyprus and the companies in the production-sharing contract are not made public due to a confidentiality agreement between the parties.

But the Cypriot side is “pleased” with its percentage, energy chief Solon Kassinis told the Mail.

Kassinis, heavily involved in the talks that led to the agreement with ENI-KOGAS, said the contract provides for “one plus one drilling.” During the first concession period the Italian-Korean consortium would carry out exploratory drilling, and if successful they would follow up with an appraisal drilling to confirm the size and quality of the reserves.

The government says there would be synergies from the licensing to ENI-KOGAS, since two of the blocks (2 and 9) run in the path of a pipeline planned to transport gas from the Noble Energy’s concession to a terminal which will convert gas into its liquefied form onshore.

Noble meanwhile has pushed back the start of appraisal drilling in its Block 12 concession because the rig has been tied up in Israel’s Leviathan field. The US firm’s license expires in October this year.

Kassinis said also that separate talks with France’s Total, bidding for offshore blocks 10 and 11, were progressing well.

“We hope to wrap it up soon, perhaps sometime over the next 10 days,” he said.

Earlier, Kassinis revealed on Sigma television that Total has proposed drilling to a depth of 7400 feet.

The depth indicates the French company would be prospecting directly for oil, Kassinis said, which confirmed his own assessment for blocks 10 and 11.

“If we find oil, and I am certain we shall, then we can just load it onto ships and sell it,” the official said.

According to the energy chief, Cypriot waters could hold up to 60 trillion cubic feet of natural gas.

Commerce Minister Neoclis Sylikiotis (left) shakes on the deal with representatives of the consortium By Christos Theodorides

PRIME Minister David Cameron’s speech on Europe may have been welcomed by Conservative backbenchers and British euro-sceptics but on the continent, understandably, it sparked a hostile reaction from top politicians. Two French cabinet minister accused Cameron of treating Europe like an ‘a la carte’ menu from which he could choose only what he like, while German foreign minister Guido Westerwelle said that “cherry-picking is not an option.”

These were accurate metaphors for what Cameron planned to do. He wants to re-negotiate Britain’s relationship with the EU, repatriating powers that now reside in Brussels, and once he had secured looser ties he would hold an in/out referendum in 2017; this was assuming his Conservative Party won the 2015 general elections. If the initial reaction of EU leaders was an indication of how Brussels would treat Cameron’s audacious move – and Germany has been pursuing an ever-closer union – the PM would appear to be chasing a lost cause.

Then again, most political analysts believe that domestic considerations were paramount in his decision. The Conservative Party has been steadily losing support to the anti-Europe UK Independence Party (UKIP) and unrest was simmering among euro-sceptic backbenchers. With his announcement Cameron would have stopped the defections, blunted UKIP’s weapons and united his party, but he may also have pushed his Lib Dem coalition partners closer to a future alliance with the Labour Party.

Britain has always had an uneasy relationship with the EU and several prime ministers had toyed with the idea of a referendum over the years. The last falling out was over the EU budget last year when Cameron walked out of the summit. The problem is that Britain has always had a different vision of the EU from the other big member-states. It views it primarily as a trading bloc and has always been reluctant to cede powers to Brussels the main objective of which is closer integration. 

There is a very strong anti-Brussels sentiment in the UK, but is the answer re-negotiating its EU membership? Lib Dem leader Nick Clegg provided the answer on a radio phone-in yesterday. He said there was a possibility “you are going do something which I think is wholly implausible which is basically totally re-write the rules to benefit us and disadvantage everybody else which is clearly not going to be agreed to.” 

Cameron will never be able to pull it off as any major concessions to Britain would give rise to similar demands from other member-states. This is a path that none of the big players in the EU would want to follow, especially as they are aware that Britain needs the EU more than the EU need Britain. It was no coincidence that sterling fell against the dollar yesterday and business leaders were warning that Cameron’s speech would discourage investment.