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Why didn’t presidential debate see candidates address questions we want answered?

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HOW DISAPPOINTING that most of the second debate between the main three presidential candidates on Monday night, which was focused on the Cyprus problem, was taken up discussing the past, particularly the Annan plan. Almost nine years have passed since three quarters of Greek Cypriots rejected the plan in a referendum and in the meantime there has been a new bout of negotiations – described as Cypriot-owned - that lasted more than three years before grinding to halt about a year ago.

What is the relevance of the Annan plan today? Is there the remotest possibility the Annan plan would be re-submitted in the immediate future? The answer is ‘no’, it just offers an example of the way Cyprus problem discourse focuses on the past. The approach suited Giorgos Lillikas for two reasons. First, he has never stopped exploiting his vehement opposition to the plan, which he treats as a big personal triumph. Second, it offers him the opportunity to question the judgment and patriotism of Nicos Anastasiades who supported the yes-vote in 2004. Stavros Malas said he had voted for the plan because he had never bothered reading it; if he had he would also have cast a ‘no-vote’.

But we should not blame the candidates for turning the 2004 referendum into the main issue of a 2013 election debate. The four journalists in the studio have the main responsibility for this as they kept raising the matter in their questions – no matter what the candidates said, they would not let it go, insisting on coming back to it. It was like they were pursuing personal agendas instead of helping viewers understand what the candidate planned to do about the national issue.

The truth is that permanent partition is drawing closer. The number of Turkish settlers in the north has grown alarmingly – numbers are anything between 100,000 and 200,000; the number of Greek Cypriots applying to the Immovable Properties Commission seeking compensation for their properties is continuously rising; more and more Turkish businesses are investing in the north; the Turkish government is taking gradual steps aimed at turning the north into a province of Turkey. How did the candidates propose to prevent this from happening, assuming they were opposed to partition?

How would they deal with Turkish threats to stop companies from drilling for hydrocarbons in Cyprus’ EEZ? Would the continuation of the status quo put at risk Cyprus’ ability to exploit the natural gas reserves? Would a settlement allow us to cash in on natural gas sooner, by using Turkey’s gas pipe-line as Archbishop Chrysostomos suggested? These were the questions the candidates should have been answering, but the journalists had decided the Annan plan was the only thing that mattered to voters.


Election ballots to be reprinted over Guinness logo row

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Author: 
Peter Stevenson

OVER half a million ballot papers for next month’s presidential elections will have to be reprinted after the existing ones were ruled invalid as they feature the unauthorised logo of Guinness World Records.

Some 575,000 ballots will now have to be binned, with the cost of a printing new ones estimated at €40,000.

According to sources at the ministry, an anonymous call was made asking whether candidate Andreas Efstratiou’s use of the Guinness logo on the presidential election ballot papers was legal.

The ministry emailed the company early yesterday morning to ask for clearance to use the logo on ballot papers but was informed that Efstratiou had been told in 2011 not to use the logo again after using it in the 2008 presidential elections. 

As a Guinness World Record holder, Efstratiou can use the logo in certain circumstances but not on ballot papers, according to the company. 

However Efstratiou has refuted this.

After using the logo in the 2008 presidential elections to promote his record, Efstratiou said yesterday he did not think any objection would stand this time round as he had been given express permission by the company as a record holder to use the logo wherever he pleased. 

“Someone from another party must have been annoyed that I was allowed to use such a famous logo,” he said. “There shouldn’t have been any problems in using it as I have used it in previous elections, despite local objections,” he added. 

“I will take up legal proceedings against the Guinness World Records as it clearly stipulates on their website that as a record holder I can use their emblem wherever I choose,” he concluded. 

Efstratiou currently holds the world record for creating the longest wedding dress train, measuring 1,362 metres, which he created in 2007.

He is a businessman from Paphos, and in 2003 won 606 votes and in 2008, 713 votes. His company, Efstratiou Weddings is a wedding planning organiser. When registering his candidacy for president Efstratiou asked people to support him because politicians had failed them.

“Despite the use of the logo in 2008, we sought to gain official confirmation that the company’s logo could be used on the ballot papers,” head of the electoral service Demetris Demetriou said. The electoral services will now look at the possibility of charging Efstratiou the cost of re-printing the ballot papers.

There have been many attempts at breaking Guinness World Records in Cyprus over recent years with the largest flaouna, the biggest wineglass and a road safety campaign with 1,000 children wearing 1,000 helmets all gaining entry into the famous book. Other attempts have also been made with people attempting to grow large plants and vegetables in order to gain recognition.

Efstratiou submitting his candidacy for president
Efstratiou with the bride wearing the record breaking train

Cyprus fires its honorary consul in Bonn

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THE CABINET has ended the appointment of Cyprus’ honorary consul in Bonn, Germany, after a series of actions and inactions “compromised” his position as representative of the country.

During a meeting earlier this week, the cabinet adopted a proposal by the foreign ministry to end his appointment following recommendations by the Cypriot embassy in Berlin. 

According to diplomatic sources, allegations of wrongdoing first surfaced in 2010 but took some years to verify before the ministry could go ahead and recommend the removal of Ioannis Vasiliou as the honorary consul in Bonn. 

The same sources said that following a series of actions and inactions, Vasiliou “compromised himself and by extension the Republic and as such, could no longer represent the country”. 

According to yesterday’s Politis, Vasiliou was made honorary consul in 2003. In 2010, the Cypriot embassy in Berlin informed the ministry of allegations that he was overcharging for entry visas and recommended termination of his services. 

However, the ministry had to verify the allegations before acting, while the consul had his own friends within the ministry who continued to support his appointment. 

In 2012, the embassy in Berlin informed the ministry that Vasiliou was taken before a German court a year earlier on money laundering charges. Initially facing criminal charges, the German authorities reached a settlement with Vasiliou, reducing the charges to a minor misdemeanour resulting in a €1,000 fine, reported Politis. 

Hospital staff broke rules on disposal of miscarried foetus

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INSTEAD of sending a miscarried foetus to the morgue for burial, Limassol General Hospital staff threw it away as medical waste, which is against procedures, the hospital’s director confirmed yesterday. 

A pregnant woman visited the hospital on Sunday last week because she had stopped feeling her baby move, Limassol hospital director Chrysostomos Andronikou said. 

The foetus had died at 21 weeks, and the woman had an operation to have it removed. She and her husband did not want to have a burial Andronikou said as they were distraught. 

Because the foetus, weighing 700 grammes, was older than 20 weeks, the hospital’s staff should have sent the body to the morgue to arrange for a burial, Andronikou said.

“Something went wrong in this case and an official is examining the issue and if anyone is responsible, we’ll take action, Andronikou told state broadcaster CyBC.

The Cyprus Mail asked what this investigation entailed given that they must know who was involved. 

The investigation is taking place “so (those involved) can tell us why the foetus was not sent where it should have been sent,” Andronikou said adding that they might take disciplinary action as appropriate.

Dead foetuses younger than 20 weeks are disposed of as medical waste.  The state outsources the processing of medical waste which needs to be treated before it can be processed in waste management facilities. 

Sigma TV broke the story after an employee for the company that handles medical waste noticed the foetus this week and notified the hospital’s management.

Cyprus could face its own ‘fiscal cliff’

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Author: 
Stefanos Evripidou

CYPRUS IS heading towards its own ‘fiscal cliff’, needing to find around €2.1 billion in maturing debts by July, or else face default, one economist said yesterday. 

Speaking at a seminar on the eurozone debt crisis with special reference to Cyprus, economist Fiona Mullen said Cyprus faces a “hard deadline” on June 3 when it needs to find over €1.4 billion in maturing Eurobonds and a further €714m by July 4 for maturing government-registered stocks. 

“If we can’t pay that then we go bust and then we’re not just junk status we’re basket-case status, It takes a very, very long time to get back from default status,” said Mullen at the event organised by the European University Cyprus.

According to Mullen, there are three main obstacles to an international bailout following a preliminary agreement reached with the troika in November 2012: German opposition; the size of the Cyprus economy, and debt sustainability. 

German opposition to a bailout is mainly due to upcoming elections in Germany but also, a touch of envy regarding the 80-plus German shipping companies based in Limassol. This opposition from our EU partners remains the “biggest risk” for Cyprus, she said. 

“The German press is really scathing about Cyprus, and without question, says that it’s a centre for money laundering, regardless of any international reports on Cyprus or its record,” said the director of Sapienta Economics.   

A second issue is the question of whether the Cyprus economy is “too small to bother”. The German finance minister has recently questioned whether it even poses a systemic risk to the eurozone, a precondition to any EU bailout. The European Commission and European Central Bank (ECB) are with Cyprus and against the Germans on this point. 

The third issue is debt sustainability and whether, mainly, the IMF believes Cyprus can pay the debt back. 

According to Mullen’s forecasts, Cyprus’ public debt to GDP ratio will reach 135.8 per cent in 2016, assuming the recapitalization needs of Cyprus’ banks are estimated at €10 billion, and the EU/IMF/ECB troika agrees to lend Cyprus €17.5 billion soon. 

“The good news is we only need to find €3bn to bring it to 120 per cent of GDP, a figure which the IMF seems able to live with,” she said. 

The economist weighed out the pros and cons of the options laid out before Cyprus.   

One is for the EU to lend directly to the banks through the European Stability Mechanism (ESM). However, this would never materialise before June, making it a non-option for Cyprus.

A second option is a Greek-style haircut on bonds which raises many legal questions as Cyprus comes under different laws than Greece. 

American academics and legal experts Mitu Gulati and Lee Buchheit yesterday argued at the seminar that these legal obstacles were not as insurmountable as people might imagine, suggesting ways to “persuade” creditors averse to anything other than a full repayment of debt to reconsider their position. 

The two also suggested a haircut now on bonds owned by the private sector would make more sense than waiting until further down the line to implement a writedown on debt that has “migrated” to the hands of the EU taxpayer (assuming Cyprus is bailed out by the EU and pays off its debt using ESM funds). 

Regarding a possible writedown on government bonds, Mullen argued that this could only really apply to Eurobonds, the total outstanding debt for which comes to €3.8bn. From that amount, €1.3bn is held by local banks. 

Assuming a 75 per cent haircut was made possible, a writedown of bonds held by local banks would basically increase their recapitalization needs by nearly a billion euros.  

So, the net effect of a writedown really affects the €2.5bn in foreign-owned Eurobonds, which saves the state around €1.9bn.   

A third option is a deposit haircut which Mullen described as “scary”. Since the government guarantees all deposits less than €100,000, a haircut could only be applied on any deposits that exceed that amount, which at the end of 2011 came to about €35bn.   

“A haircut on deposits will kill our banking system dead. The banking system survived an invasion and if you do this to it, it will kill off the professional services sector which is the only sector that’s been creating jobs the last few years,” she said. 

A fourth and likely option is converting the bonds of junior bondholders (who claim they were duped by banks into buying the convertible bonds) into bank shares. 

Mullen estimated this could raise €1.2bn for banks which would go straight into their core tier 1 capital, immediately knocking €1.2bn off the troika bill.

“It’s a political issue. Can you get away with it politically? How many were retail investors? How many were mis-sold?”

Regarding the proposal by presidential candidate Giorgos Lililkas to sell parts of Cyprus’ possible gas reserves, the economist argued the money would never come in time and would not be enough to meet Cyprus’ needs at this stage of the process in the energy sector.  

Another likely option is privatisation of semi-government organisations like the electricity and telecommunications organisations and the ports authority. In the short-term this could potentially raise €2bn and in the long-term maybe fivefold that amount, if one overcame expected union dissent. 

Buchheit countered, however, that privatisations are complicated processes that always take a lot more time than one estimates with the end result not necessarily in anyone’s favour. Privatisations are demanded by EU governments so they can turn to their electorates and say, look the recipient country is contributing with their own money to this bailout, said Buchheit.

A final option raised by all three speakers was to extend maturing debt by a few years. Instead of wiping out debt or cutting it down, Cyprus could convince its creditors that it will pay further down the line with interest.  

In the short-term however, the new Cyprus president will need to decide on one of the above options or a combination of them to find the €3bn needed to convince the troika that its debt is sustainable, said Mullen. 

Should the banks’ recapitalization needs be estimated at €9bn instead of €10bn, then this automatically goes down to €2bn. 

“The new Cyprus president will have to choose the option with the least political cost. It’s a toss up essentially between convertible bonds and privatization,” she said.

Dispute over cigarette price labels

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Author: 
George Psyllides

 

CONVENIENCE stores have complained to the European Commission over a law that makes it compulsory for the maximum retail price to be displayed on cigarette packets, which they say will hold them hostage to the pricing policies of tobacco companies.

“Our fears were confirmed even before the law came into effect,” said Andreas Theodoulou, chairman of the convenience store association (SYKADE). “The rolling tobacco traders’ decision to reduce our commission to 4.0 per cent in a bid to restrain the retail price of their products makes our businesses unsustainable.”

The Association said it was determined to fight the provision, which left its small and medium-sized members at the mercy of the pricing policies and arbitrary decisions of tobacco merchants and tobacco industries.

The law was passed in December last year and will come into force in June.

In their complaint, filed on Monday, SYKADE argued that the law was incompatible with the competition rules of the European Union.

The association also said it planned to file for an injunction suspending implementation of the law until their complaint was examined by the European Commission.

SYKADE claimed that displaying the maximum retail price was a violation of competition as it could be seen as a fixed retail price and not a maximum retail price, as retailers will be forced to sell at the same price. 

It also suggested that in countries, like Greece, where this measure was implemented, there had been a rise in cigarette smuggling.

 “We will do everything possible to ensure the relevant law is not implemented,” Theodoulou said. “We repeatedly warned the relevant parliamentary committee not to go ahead and approve the relevant amendment.”

SYKADE said MPs had been misinformed during discussion of the matter in parliament – lawmakers were told that this was enforced in many other European countries when in reality it is the tax that is displayed and not the maximum price.

 

Civil servants threaten strike over health care

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CIVIL servants are threatening to go on strike if their access to free health care is abolished as part of the conditions of a bailout, it emerged yesterday.

PASYDY, their union, also wants a study and social dialogue on the new civil service timetables.

In an announcement, PASYDY said it would not accept abolition of the right to health care, which it considers, a vital conquest for every worker.

Unlike the rest of the population, civil servants and their families, have access to free health care, irrespective of income.

A memorandum agreed between Cyprus and international lenders calls for the abolition of the so-called right.

It envisages an increase in hospital charges and the introduction of fees for drugs and use of the casualty wards; only people earning less than a specific income would be entitled to free healthcare.

The government had been discussing the matter with PASYDY, before submitting a bill, but it seems that no common ground has been found yet.

PASYDY was also irked by the decision to extend public sector work hours in a bid to cut overtime pay.

Civil servants will start work 30 minutes later, at 8am, and work until 3.30pm, or 9am to 4.30pm Monday to Friday.

Previously, civil servants worked between 7.30am and 2.30pm with the exception of Wednesday’s 3pm to 6pm.

The new regime has a transitional period from January 1 until the end of August 2013, during which government workers can start work at 7.30am or 8.30am and leave at 3pm or 4pm.

Extension for paying road tax thought unlikely

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Author: 
Peter Stevenson

NO extensions to the deadline for paying road tax are expected, which means all drivers should pay up by February 4 or face being fined by police who will begin their checks on February 5.

“I do not envisage any extension to the deadline,” head of the Road Transport Department, Sotiris Kolletas said yesterday. “I am against any extension anyway, as the public needs to make sure they pay their road tax within the allotted period without relying on last minute extensions,” he added. 

Vehicles need to have a valid MOT certificate before a road tax disc can be renewed.

Those who do not intend to renew their road tax certificate are nonetheless legally required to let the road transport department know they will be withdrawing their car from circulation. 

“Even members of the public who have not paid previous year’s road tax can pay it off online if they wish,” Kolletas said.

According to Kolletas, 695,000 vehicles are currently registered with 383,000 having renewed their road tax.

“About 45 per cent of road taxes have been renewed from the sum total of what we expected this year,” he said. “Each year approximately ten percent of vehicles do not renew their road tax,” he added. Income is down by 33 per cent so far this year according to Kolettas, with smaller car owners, who pay less road tax, having mostly renewed their road tax certificates with more expensive vehicle owners yet to pay up.

“Ninety nine per cent pay online through the ministry website via JCC or at their bank,” he said. Kolletas added that road tax could be paid on a six month or annual basis with the road transport department not set up yet to take monthly payments.

“JCC (the site through which the payments must be made) accepts all types of Visa and Mastercard for online payments, even those from other countries,” head of e-commerce and public sector Michalis Shaelos said. 

“The only instances where a card may not be accepted is if it has had its internet use turned off by the card owner or the bank, or if the details inputted into our system are wrong,” he added.

Minister of Communications and Works Efthymios Flourentzos said a final decision on extensions would be made today or tomorrow.

Failing to renew road tax for three consecutive years turns the money owed into a civil debt, payable at court, and forces drivers to re-register. 

Vehicle owners can renew their road tax online at any citizen’s service centre, banks or financial institutions, at the road transport department’s office or else online at: http://rtd.mcw.gov.cy


Reprinting of ballots begins

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Author: 
Peter Stevenson

REPRINTING 575,000 ballot papers began yesterday after the original batch was scrapped as they depicted the alleged unauthorised use of the Guinness World Records logo by one of the candidates. 

The reprint will cost the state roughly €40,000, and the electoral services are looking into the issue of legal culpability on the part of presidential candidate Andreas Efstratiou.

Efstratiou used the Guinness World Records logo on four previous election ballot papers, and claims that as a world record holder, he has express permission to use it wherever he pleases. 

But Chief Returning Officer, Andreas Ashiotis, rejected the claims yesterday after an email he received from Guinness World Records Ltd on Tuesday informed him that Efstratiou had been contacted in 2011 and told he was not permitted to use the logo on any more electoral ballots.

“In 2008 when  Mr Efstratiou was a candidate, he presented the interior ministry with documentation claiming that Guinness World Records had informed him he could use their logo wherever he wanted,” Ashiotis said.

“On Tuesday I emailed the Guinness World Records company to explain to them that the use of their logo on the Republic of Cyprus’ ballot papers was taken on good faith from Mr Efstratiou who had assured the interior ministry that he was allowed to use the logo wherever he wanted,” Ashiotis said. 

“As the ballot papers had already been printed we asked Guinness World Records for permission to use their logo and if they had any objections we would ensure the logo would not be used again,” he added.

 According to Ashiots, the company replied that although they understood the Republic’s predicament, they could not condone the use of their logo as they had warned Efstratiou in 2011 that he was not allowed to use the logo for any electoral purposes. “If he was aware of the letter then he should have informed the electoral services,” Ashiotis said. “The legal services will be consulted and if it is discovered that he was aware of the letter from the company then we will proceed accordingly,” he added

Efstratiou claimed yesterday that he received no such notice from Guinness World Records, denying any responsibility for the ditching of the ballot papers. “I am not aware of any letter from 2011 informing me that I was not allowed to use their logo,” he said. “I will be speaking with my lawyer who will examine the ministry’s claim that I am liable for the destroyed papers and Guinness World Records’ claim that I received notice not to use their logo again for any elections,” he added.

Asked if he was willing to pay the expense of replacing the discarded ballot papers to show good faith towards the state, Efstratiou protested that he has eight children and Cyprus was currently going through a crisis.

Ashiotis said he would be speaking with the Attorney-general to determine whether Efstratiou could be held responsible for the discarded ballot papers and the reprinting of new ones. “I will speak to the state printers to find out exactly how much the cost of reprinting the ballots will be and then speak with the Attorney-General to find out if the cost can be charged to Efstratiou,” he said. Ashiotis had spoken to the Attorney-general prior to the decision to destroy the ballot papers and had agreed that there was no other way out. “He expressed his desire for the elections to run smoothly, without any problems and so we came to the decision that the papers needed to be scrapped to avoid any conflict,” he said.

Efstratiou broke the world record for creating the longest wedding dress train, measuring 1,362 metres, which he created in 2007.

He is a businessman from Paphos, and in 2003 won 606 votes and in 2008, 713 votes. His company, Efstratiou Weddings is a wedding planner. When registering his candidacy for president Efstratiou asked people to support him because politicians had failed them.

Reprinting the ballots yesterday By Christos Theodorides

Unrest grows after employers call for wages freeze

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Author: 
Poly Pantelides

NO EMPLOYER can afford to give wage rises under the current economic situation, the head of the employers and industrialists federation said yesterday, defending a circular suggesting an across-the-board freeze on salaries, and suspending wage indexation for this year. 

The chamber of commerce and industry (KEVE) and the employers and industrialists federation (OEV) have suggested to their members they impose a moratorium in 2013 to minimise the risk to businesses. 

“It is necessary to seriously come to an adjustment based on the new state of affairs on how businesses can work,” KEVE said in an announcement. 

KEVE called on businesses to discuss and agree on any measures necessary to secure viability.

Unions, and ruling party AKEL, have condemned the decision but OEV head Michalis Pilikos said yesterday that businesses were simply not in a position to offer wages rises this year.

 “We are in a state of emergency, in a very bad financial state, and we’re doing whatever possible to firstly keep businesses going, and secondly to maintain jobs,” he said.

The indebted state sector has already imposed wage cuts this year as part of a government agreement with their international lenders. Although wages in the private sector are significantly lower as a rule, many businesses have already cut or frozen wages since the crisis began.

“We can’t continue behaving as if nothing is going on,” Pilikos said referring to redundancies and businesses shutting down. 

The unions have hailed social dialogue, cohesion and collective agreements as “the ultimate goods,” he said, adding that they seemed to be on a “different wavelength”.

The head of union SEK Nicos Moyseos said that OEV was sending a message of disrespect to social dialogue and was demolishing the foundations of labour relations.

AKEL leader Andros Kyprianou said he was “condemning with every fibre of (his) being” the one-sided decision that tells workers that employers can do whatever they want.

Labour minister Sotiroulla Charalambous asked employers to avoid taking action that disrupted peace, urging all parties to respect social dialogue and labour relations.

Meanwhile, construction workers are continuing their indefinite strike with the unions saying employers are pushing people to joblessness, hiring cheap hands over the unionised workers who are protected by collective agreements. Costas Roushias, of the federation of building contractors, said it was hard to discuss anything while banners were up and workers striking. But left-wing PEO union’s, Michalis Papanicolaou, said the contractors had shot down all their proposals. “Stop firing people and hiring cheap labour to replace them,” he said. 

And workers in the hotel industry are in the process of discussing their collective agreements and warning they would not accept wage cuts or changes in the terms of their employment. 

Our View: Central Bank Governor more punisher than protector

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THE ROLE played by the Governor of the Central Bank Panicos Demetriades in the procedure for the re-capitalisation of the Cypriot banks can only be described as disastrous. We do not know what his brief from the government was when he was appointed last May, but his decisions appear to have pushed the banking sector as deeply into the mire as was possible. If the role of a Central Bank Governor is to punish banks as harshly as possible for their transgressions, then Demetriades has been successful.

On the other hand there are some who believe that the prime responsibility of a Governor is to protect a country’s banking sector, given its critical importance to the rest of the economy. Demetriades, however, has acted more like a punisher than a protector. Perhaps these were the instructions he had when he was appointed by the Christofias government which has been waging a vicious campaign against the banks, in its ongoing efforts to avoid all responsibility for the big mess the economy is in. 

The truth is that from the first few weeks in his new job the Governor directed his fire against the banks, promising to clean up the mess and punish those responsible. In fairness, the banks were not models of corporate governance – they had over-expanded, invested heavily in Greek government bonds, had not been very prudent in their lending and, as a result, needed financial assistance from the state to meet their re-capitalisation needs. In this regard the Governor could have been more helpful than he was. 

Instead, in early July, before a consultancy firm had even been hired, the Central Bank leaked to a daily paper that the recapitalisation needs of the banks would be in the region of €10billion. It was as if the amount had been decided and that the consultancy firm which would be commissioned to estimate the recapitalisation needs would have the job of confirming this amount, which is more or less what has happened.

Interestingly, the Governor did not sit on the steering committee - consisting of representatives of the troika, the Central Bank and finance ministry - that would have decided the methodology and agreed the assumptions on which the Pimco consultants would estimate the total amount of financial assistance for the bank. It was incredible that Demetriades did not want to have a direct say on how the final sum of financial assistance would be calculated and try to keep this at a manageable level. He was represented on the steering committee by a Central Bank official. 

Worse still, Pimco refused to have any contact with the banks when it was calculating their funding needs. In contrast, Black Rock, the consultancy firm that was hired to do the same job for Greece’s banks, worked closely with the executives of the Greek banks and jointly decided the financial assistance needs. Why did Demetriades not insist that the same procedure was followed in Cyprus, but instead allowed Pimco’s analysts to work on their own without having any contact with the Cypriot banks? 

Only this week, after everything had been decided, Pimco finally made contact with the Cypriot banks, informing them of the astronomical amounts they would require and telling them that arbitrary assumptions on which the calculations were based could not be changed. And the Governor washed his hands of the situation, presumably content that Pimco had come up with a figure that would make the Cyprus public debt unsustainable and cripple the banks for many years.

Russia willing to aid Cyprus

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Author: 
George Psyllides

RUSSIA is prepared to contribute towards Cyprus’ bailout, along with the European Union, President Demetris Christofias said yesterday, as reports also suggested that German objections had weakened.

The island’s predicament was the subject of a phone call between Christofias and Russian President Vladimir Putin who expressed his country’s readiness to chip in, along with international lenders.

“President Putin assured me that the Russian Federation is ready to contribute with the European Union in the financing of Cyprus," Christofias was quoted as telling reporters during a visit to Belgrade yesterday. 

“The Russian finance ministry is in touch with the European Commission and I hope that this matter will soon close in a positive way.”

Christofias said he spoke to Putin by phone on Tuesday evening. A government source told Reuters that Putin made the call.

Talks between Cyprus and international lenders have been complicated by the sheer size of the bailout, which could equal the €17.5 billion size of the Cypriot economy, and German misgivings about the island's commitment to financial transparency because of its close ties with Russia.

Christofias avoided getting drawn into a discussion concerning the debt’s sustainability following a bailout.

“I just wanted to give this message to the Cypriot people. The details can be left to the experts. I strongly believe that this assistance can save us,” he said.

The president was quick to add that that would not mean Cyprus would not meet its obligations concerning the structural changes it needs to put in place, and repaying potential loans.

It was not immediately clear what form any Russian assistance would take. Cyprus had requested a €5.0 billion loan from Russia last year, which Moscow has so far declined to grant.

The island has also asked for a five-year extension in repaying a 2011 €2.5 billion loan to Moscow, to 2021, from 2016.

Asked about the possibility of Russia granting Cyprus an extension on its five-year loan, German finance ministry spokesman Martin Kotthaus said any contribution from non-euro zone countries with a stake in Cyprus was welcome.

Last week, European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters he believed it was only fair Russia make a contribution to the bailout effort because of the significant Russian business presence on the island.

That presence has raised concerns in Germany, which claims that at least part of the Russian money in Cypriot banks could be illegal.

However, it appeared that German opposition was weakening yesterday.

A German newspaper reported that the EU paymaster was in the process of dropping its reservations following pressure from eurozone countries and the EU itself.

Sόddeutsche Zeitung said German Finance Minister Wolfgang Schauble continued to have reservations but the pressure from eurozone partners, the European Commission and the European Central Bank had become so high that Germany would eventually be willing to play along.

The German government said yesterday the eurozone had not yet taken any decision on a bailout request from Cyprus while Berlin's own position has not changed since last week's meeting of finance ministers from the currency zone.

"There is no new position on Cyprus. Germany, just like its European partners, has not yet taken a decision on aid to Cyprus, neither in the positive nor the negative sense," said government spokesman Steffen Seibert.

Last week, Schauble questioned whether Cyprus was systemically relevant, though various EU officials have since stressed that letting Cyprus go bankrupt would have an impact on the common currency.

Unless a bailout was settled soon, the island could start causing wider problems, according to former euro group Chairman Jean-Claude Juncker.

"If we don't definitively solve the problem case of Cyprus, there is a contagion risk even from this very small national economy," Juncker was quoted as telling Austria's Kleine Zeitung in an interview published yesterday.

Meanwhile, Cyprus has launched an international campaign to counter money laundering allegations. 

A parliamentary delegation yesterday discussed the matter in Brussels with the Vice President of the European Commission Olli Rehn, and with political groups of the European Parliament.

During the meetings with the political groups and Commissioner Rehn the delegation briefed the European officials on the current situation of the Cyprus economy, as well as on the Cypriot parliament’s commitment to adopt every measure in order to shed  the money laundering accusations.

Cypriot MPs told Rehn the island has nothing to hide and EU officials were more than welcome to visit Cyprus to evaluate the legal framework and its implementation.

President Demetris Christofias announced the results of his talk with Putin during a visit to Serbia yesterday

A triumph of bicommunal collaboration

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Author: 
Stefanos Evripidou

 

REACHING AGREEMENT on restoration work for the decaying monastery of Apostolos Andreas in the Karpas peninsular was a triumph of bicommunal collaboration and positive thinking, said Takis Hadjidemetriou, a member of the Technical Committee on Cultural Heritage yesterday. 

“This is a watershed moment. Only through the cooperation of Greek Cypriots and Turkish Cypriots will we save our cultural heritage,” he told the Cyprus Mail

Hadjidemetriou said the technical committee has been working on finding a solution to the Apostolos Andreas conundrum since last February. 

“I tried hard not to reach deadlock, and not to see any developments from a negative perspective,” said Hadjidemetriou, who heads the committee, made up of five Greek Cypriots and five Turkish Cypriots. 

The United Nations Development Programme (UNDP) signed protocol agreements with the Church of Cyprus and Turkish Cypriot EVKAF Administration separately on Thursday for the full restoration of the dilapidated monastery after years of disagreement over who will do the work, how, for whose benefit and with whose money. 

The need to prop up the historic religious site, considered of huge importance for Greek Cypriots of the Orthodox faith, first came to the foreground in 2002. 

Initial plans to renovate it were rejected by the Church until 2006 when the Archbishopric gave its approval to a new renovation plan undertaken by the University of Patra in Greece. 

However, after almost seven years, there was still no agreement between the Church, Turkish Cypriot authorities and the UN to go ahead with much-needed support work. 

Just last month, Archbishop Chrysostomos II said he was prepared to let the monastery collapse rather than sign a plan that did not specify clearly that the Church of Cyprus owned the site. 

The primate also had a dig at the bicommunal technical committee, saying it had done nothing to help. 

The last twist in the saga was when the Turkish Cypriot authorities, having seemingly lost patience with the Church’s refusal to permit the start of restoration work, decided to go ahead unilaterally, starting work on cleaning up the monastery’s exterior. 

“I said to the Turkish Cypriots, this will create chaos, let’s do it together. And so we came up with the idea of a common fund where everyone contributes to a common effort. The Turkish Cypriots accepted. I spoke to the priests and told them ‘if you don’t do it, the Turkish Cypriots will’ and they agreed,” said Hadjidemetriou.

On Thursday, the UN announced to a chorus of praise that the project was finally good to go.  

The golden compromise was to create a “multi-donor partnership” allowing everyone to provide funding for the project.  

The monastery will be restored according to the Patra University study in three phases with the first phase costing €2.5 million. The total cost is estimated at €6m.

US Ambassador to Nicosia John Koenig also played his part, recently visiting the Archbishop to discuss ways to save the historic monastery. 

In a statement released yesterday, Koenig said the US plans to contribute to the multi-donor fund, in the hope this will encourage swift implementation of the restoration plan. 

“There could be no better example of how cooperation can result in progress on issues of common concern,” he said.

According to Hadjidemetriou, once a call for tenders is issued, the work will be complete within 26 months.

As for the technical committee, set up in 2008, Hadjidemetriou had this to say: “We’ve been working hard the last five years.” 

“You need a central goal and you need to work towards it. We wanted to take cultural heritage out of the realm of politics and conflict for the greater good. And we have succeeded, at least in the committee, in creating a climate of trust and cooperation,” he said.

When vandals recently knocked down a mosque wall under restoration in Denia, the Turkish Cypriot committee members comforted their Greek Cypriot colleagues who were appalled by the act of desecration. 

“This did not create a crisis in the committee. On the contrary, our Turkish Cypriot colleagues tried to comfort us because we felt terrible about it,” said Hadjidemetriou.  

So far, the committee has undertaken minor works on 15 monuments across the island, has six restoration projects now underway on churches and mosques north and south of the divide, and is preparing to issue a call for tenders for studies on restoration work for six more monuments.

Each study is prepared by a Greek Cypriot and Turkish Cypriot architect or engineer.  

Having been appointed in 2008 by President Demetris Christofias, the five Greek Cypriot committee members will offer their resignation to whoever is elected president later this month, though they will remain at his or her disposal to ensure continuity in the work of the committee.  

 

 

 

Sweeping checks on all buses

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Author: 
Peter Stevenson

ISLANDWIDE checks will be carried out on all buses that should have been replaced at the turn of the year after 30 of 31 buses used to transport school children in Nicosia failed their MOT, according to Communications and Works Minister Efthymios Flourentzos. 

“Nicosia cannot be the only place chosen for the checks and I have ordered the road transport department to check all buses that should have been replaced at the start of the year,” he added. He gave assurances that school children would be transported with safety until the end of the year. “The old buses should have been replaced with new ones to meet the transport requirements of the children until the end of the school year,” he added. Flourentzos said that the state would now have to pay for the 30 buses to be repaired and that all those vehicles which are beyond repair would  be decommissioned. 

The minister revealed that it was the bus operating companies of each district that were contractually obligated to replace the old buses in the new year. According to Flourentzos due to high borrowing costs and funding difficulties, the audit committee for requirements and changes was asked to extend the deadline on the buses’ usability so the companies could meet their requirements. 

“An extension was given under the condition that regardless of the age, any buses which are used must be safe,” Flourentzos said. “The ministry considers safety to be of utmost importance,” he added. “School children will be transported with backup buses or the routes will be adjusted accordingly,” he said. 

“There are mistakes in the contract between the state and the bus companies, allowing them to take advantage of certain aspects such as these old buses,” he said. “These will be corrected with the new school year and instructions have been given not to invite tenders from companies, but for the contracting authority to ensure the legality of the procedures and to ensure that the procedures followed are not exploited,” he concluded.

Speaking to the state broadcaster, a spokesman for Nicosia bus company OSEL, said that buses did not operate if they did not have the correct paperwork. “The buses are checked at the start of each year and if they pass their MOT then they can operate for one year,” he said. 

Buses which did not pass their MOT this January, had been transporting children in November and December of 2012. “But these buses are old and if they had been checked on a monthly basis it’s possible that they may not have passed every month,” he concluded.

‘Biggest investment in the history of the Republic’

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Author: 
George Psyllides

CYPRUS could have one of the major natural gas liquefaction terminals in the world, the biggest investment in the history of the Republic, Commerce Minister Neoclis Sylikiotis said yesterday.

“Our decision to carry out this project is irreversible because the political and economic benefits would be unmatched,” the minister said.

Construction of the plant at Vassilikos is expected to begin late in 2014 or early 2015, the minister said. The aim is to have it ready by 2019.

“Our objective is for the gas liquefaction terminal to process our own gas, which we will transfer to international markets, as well as the natural gas of Israel, Lebanon, and other countries in the region”.

As regards oil, he said the government is going ahead with the construction of a state oil terminal and is engaged in negotiations with a Dutch company. 

A private terminal is also under construction.

"These two will turn Cyprus into a major trade hub for oil”, he said.

Cyprus has identified vast reserves of natural gas off its coastline, with estimates of up to 60 trillion cubic feet, with just one block in the Mediterranean basin between Cyprus and Israel estimated to contain gas worth $80 billion.

The gas fields are only likely to come on line in 2018 for domestic consumption and 2019-2020 for export.

The government has recently signed contracts with the consortium EMI/Kogas for blocks 2, 3 and 9 in its EEZ, receiving €150 million, while in the coming days it is expected that contracts will be signed with TOTAL for blocks 10 and 11.

"The big benefits for our country are yet to come," Sylikiotis said, adding that the profit for the state from the exploitation of its hydrocarbon reserves would exceed 70 per cent, which would be “among the highest in the world”. 

Referring to renewable energy sources, Sylikiotis said their contribution in energy consumption reached 8.6 per cent in 2012, exceeding the national target of 4.92 per cent.

And the ministry this week announced it had selected the firms that will construct 23 photovoltaic parks that will produce 80GWh at a lower cost.

The current average cost of production of electric power with conventional fuel is 15.40 cents per KWh while the average price secured through the bidding process was 8.66 cents per KWh, Sylikiotis said.

The process attracted 121 applicants who submitted 2,150 bids. 

Of the 23 projects, 15 will produce up to 1.5 MW, five will have an output of up to 3.0 MW, two, up to 5 MW, and one will have a capacity of up to 10 MW. 


What’s that in your backyard? Is it a fighter plane?

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SATELLITE views of the earth used to be reserved for high ranked military and political personnel but now with the help of Google the average citizen can pinpoint where he lives and works or can help him look into his neighbour’s premises.

If you live in the area of Strakka between Lakatamia and Kato Deftera you might be forgiven for thinking that someone at Google was playing a practical joke, as one residence clearly has a Harrier Jet parked in the backyard. 

The decommissioned plane is the property of pilot Yiotis Ioannides, husband of Maria Yiorkadji, sister of Nicosia Mayor Constantinos Yiorkadjis. 

It is believed the British Sea Harrier Jet model ZH808, which was built in 1997, was sold in 2005 after it was damaged due to a hard landing in an exercise at RAF Akrotiri where it was on a visit. It was sold to a scrap metal dealer in Kalo Chorio for 600 Cyprus pounds (€1,000) before being purchased by enthusiast Ioannou for 3,000 Cyprus pounds.

Harrier’s are famous for their vertical take-offs and landings with the former often causing irreparable damage to the landing suspension.

Sea Harriers served in the Falklands War, both of the Gulf Wars, and the Balkans conflicts. On all occasions they mainly operated from aircraft carriers positioned within the conflict zone. 

They were withdrawn from service in 2006 and the last remaining aircraft from 801 Naval Air Squadron were decommissioned on March 29, 2006. The plans for its retirement were announced in 2002 by the British ministry of defence. 

 

 

 

This is said to be the same Harrier jet sitting in a scrapyard in Cyprus in September 2006. Photo Ian Poxon

Banks follow Fitch sovereign downgrade

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FOLLOWING the downgrade of Cyprus’ sovereign rating on January 25, Fitch Ratings late on Thursday downgraded Bank of Cyprus' (BOC), Cyprus

Popular Bank's (CPB) and Hellenic Bank's (HB) Long-term Issuer Default Ratings (IDRS) and Support Rating Floors (SRFS) to 'B' from 'BB-.

The Outlooks on the banks' Long-term IDRs were negative in line with that of the sovereign, Fitch said. 

The agency Fitch affirmed all three banks' Short-term IDRs at 'B'.

Fitch said the sovereign downgrade indicated a weakening of its ability to provide extraordinary support to its banks.

In the near term, lingering uncertainty exists over the timing and details of an official financing programme for Cyprus, including in respect of banking sector recapitalisation costs, the agency said. “However, Fitch expects such a programme will be agreed before June 3, and that it will provide financing for the recapitalisation

of the banking system,” it said.

Fitch said it expected the recapitalisation cost to be up to €10bn, “although Fitch anticipates that this figure may include a degree of headroom.”

The Negative Outlooks indicate that any further downgrade of Cyprus's sovereign rating would be likely to lead to a further downgrade of the banks' long-term IDRs, senior debt ratings and SRFs. 

“In addition, any development that reduced the likelihood of international support for bank senior creditors would be likely to lead to a further downgrade of these ratings,” Fitch said.

December jobless rate 14.7 per cent

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THE JOBLESS rate in Cyprus jumped to 14.7 per cent in December, one of the highest increases in the European Union.

Highlighting the human cost of a debt crisis that began in 2009 in Greece and spread to the eurozone's biggest economies, some 18.7 million people were out of work in December, an unemployment rate of 11.7 percent. That figure has risen from below 8.0 per cent in early 2008, just before the full effects of the global financial crisis were fully felt, and is well above 11.3 per cent forecast by the European Commission for end-2012.

Unemployment held steady at just 5.3 per cent in Germany, the eurozone's biggest economy, but rose again in Portugal and Cyprus, to 16.5 per cent and 14.7 per cent respectively.

In January, the island’s statistical service said 41,625 people were unemployed the previous month.

Greece holds the record in both the eurozone and the wider European Union for joblessness, with a rate of 26.8 per cent in October, the latest figure available. The unemployment rate in Spain fell slightly to 26.1 per cent in December.

Even as the economy appears to have hit bottom, the number of those out of work is expected to rise in coming months, employment expectations in the latest Commission survey suggest.

  "We would still expect the jobless rate to breach 12 per cent later this year," said Martin van Vliet an economist at ING.

German official acknowledges Cyprus risk

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A GERMAN government official acknowledged yesterday that a collapse of Cyprus’ banking sector would pose a threat to the eurozone’s stability, suggesting that the country would not block a bailout package.

“From everything that I know, I would expect that one will come to the conclusion that it’s relevant,” Norbert Barthle, a lawmaker and budget spokesman for German Chancellor Angela Merkel’s Christian Democratic Union-led bloc, was quoted as saying by Bloomberg. “One has to take a very close look at the issue of contagion, especially since the Cypriot banks are very closely tied to the Greek banks.” 

He is the first senior German government official to acknowledge the systemic risk to the 17-nation euro region posed by Cyprus. 

Germany’s finance minister has said rescue-fund rules stipulate that a country must pose a risk to the stability of the entire region before it can be eligible for bailout loans. 

Der Spiegel reported this week that European Central Bank President Mario Draghi had pressed German Finance Minister Wolfgang Schaeuble into recognising that the country posed a risk. 

Barthle said the issue of Cyprus’ threat to the euro would be resolved when legislators saw that the country was systemically relevant to the currency. 

Open questions remain on Cyprus’ debt sustainability, Russia’s involvement, harmonising its tax system, privatising state assets and accusations of money laundering, he said according to Bloomberg. 

Cyprus has fiercely rejected the money laundering allegations, embarking on a campaign to convince Europeans.

 “Cyprus has to make substantial progress in countering these accusations,” Barthle said. “This will have to be assessed very closely, otherwise I can’t imagine that there will be an approval of any package.” 

Russia signalled it was prepared to contribute in rescuing Cyprus, which according to Barthle, would offer EU officials “a bit of time” to agree on a package.

Though that timetable will not stretch until German parliamentary elections in September, Barthle said. 

 

Unions threaten all-out strike

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Author: 
George Psyllides

UNIONS warned yesterday that the ongoing builders strike, which is entering its ninth day, could escalate into an all-out general strike if employers did not show signs they was ready to deal.

While they voiced their readiness to talk, unions also warned that things could get worse if the matter was not resolved soon.

“We are warning of the danger of labour peace exploding because of the builders’ strike,” said right-wing union SEK’s boss Nicos Moiseos. 

Moiseos said yesterday his union had decided how to react but it would not announce anything, in order to give the labour minister time to bring the two sides back to the negotiating table.

Earlier in the day, Pambis Kyritsis, the leader of left-wing PEO union, said it was certain there would be an escalation if the other side did not show any signs that it was ready to reconcile.

“Other sectors will join the mobilisation, in support of the builders’ strike, which could take the form of a general strike,” Kyritsis said.

The labour minister is trying to mediate between the workers and employers in a bid to put an end to the construction strike, on its eighth day yesterday.

Following a meeting with Minister Sotiroulla Charalambous yesterday afternoon, the two sides voiced their readiness to return to the negotiating table to find a solution.

“We have been exploring the potential of bringing the two sides in range for an agreement,” Charalambous said. “When we are ready and have something more concrete we will announce it. Exploratory contacts are underway and our aim is to resolve this problem as soon as possible.”

Builders went on strike eight days ago over job losses and insecurity in the sector.

Their 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. 

The chamber of commerce and industry (KEVE) and employers’ organisation OEV also said they were ready to talk.

“We all agree that this matter must come to a close as soon as possible because the country cannot take any economic turmoil,” KEVE secretary Marios Tsiakis said.

The climate was further worsened by circulars issued by KEVE and OEV during the week suggesting a pay freeze in the private sector. 

This was also discussed during yesterday’s meeting with the minister who plans to call a meeting next week in a bid to iron out differences.

“Respect of labour relations is necessary if we want to behave properly and responsibly during the difficult conditions the country and the economy are going through,” Charalambous said.

OEV director Michalis Pilikos reiterated that the circular did not mean that a decision had been made to cut wages.

It said that “in cases where there is a problem the unions and the workers will be called to discuss what happens next,” Pilikos said.

KEVE’s Tsiakis said his organisation had recommended to businesses to give pay rises if they could, adding that the unions’ reaction to the circular was unwarranted.

In a related development, KEVE and OEV rejected a labour ministry proposal that gave the minister the power – under certain circumstances – to extend collective agreements in one part of a sector to all businesses in that sector.

“The ministry arrived at this suggestion after much deliberation and looking into what is happening in labour relations and the labour market in Cyprus, and what is happening in EU countries.”

Charalambous said the proposal aimed at tackling cases where collective agreements and their conditions were not followed by all businesses in one sector, resulting in unfair competition between workers and enterprises.

 

 

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