SPEAKING in the Netherlands’ lower house in The Hague last week, the new head of the Eurogroup Jeroen Dijsselbloem said that revenues from natural gas could be included in calculations to make the Cyprus debt sustainable. Proceeds from the sale of gas, he said, could be paid into a separate account that could be used to service the national debt, adding, however that certain questions needed to be answered first. 

Before that gas was included in the programmes, the drillings had to be completed and the quantities and the quality of the gas had to be established, said Dijsselbloem. This was a pretty sensible response regarding the Cyprus bailout, which would have to be approved by the Dutch parliament. It was perfectly understandable that MPs sought explanations of how we would be repaying our loan and that the head of the Eurogroup wanted to assure them that revenue from natural gas would go towards paying it off.

Dijsselbloem’s comments were slammed in Cyprus on the grounds that the Europeans wanted to take control of our natural gas resources, a claim that we have heard on countless occasions from our politicians. Their argument is that taking decisions jointly with the troika on hydrocarbons would be undermining the country’s sovereignty, which is a correct observation, but a statement of the obvious. 

Just like the shareholders of a business which is being saved from bankruptcy by the bank relinquish control of decision-making so does a state in the same predicament. Were we under the impression that our lenders would allow us to take the revenue from hydrocarbons and spend it on pay rises in the public sector or on building new roads, while owing billions to them? 

This would not happen anywhere in the world and commerce minister Neoclis Sylikiotis was being disingenuous in attempting to make out there was a foreign scheme aimed at preventing Cyprus playing a bigger political role in the region and in Europe by using its natural wealth. The truth is that the Europeans are looking for ways to ensure that Cyprus’ debt would not be unsustainable, as this would cause big problems both for the island and the euro-zone. If accounting for the hydrocarbon revenues would make the debt sustainable, would it be such a bad thing? 

Giving a say to the troika over the management and exploitation of hydrocarbons is not the disaster Sylikiotis claims either. The troika has as much of an incentive in monetising our gas finds as we do, because the repayment of our debt would be guaranteed in this way. In fact its participation in the decision-making could help us develop a rational energy policy, something our politicians have, so far, failed to do. 

A SUMMIT of eurozone finance ministers decided yesterday that a private-sector auditor would probe Cyprus’ compliance with anti-money-laundering regulations but the island drew no clear support from  its partners on its refusal to impose losses on bank depositors as part of a bailout programme.

Speaking at a press briefing in Brussels last night, Eurogroup president Jeroen Dijsselbloem said the private firm would investigate both the legal framework in place as well as enforcement.

Cypriot authorities and the troika - a team of EU, IMF and European Central Bank experts - would jointly select the auditor and determine its terms of reference.

EU officials want Cyprus to pick the company as quickly as possible, inside of a week so that a report is ready in time for a bailout deal, mooted for March.

 Asked by reporters if he could exclude the idea that depositors in Cyprus would lose money under the bailout, Dijsselbloem avoided a direct answer. "Tonight where Cyprus is concerned we zoomed in on the issue of anti-money laundering and didn't go into any possible, or not possible, elements of a programme so I can't go into these elements with you,” he said.

"We agreed that an independent assessment conducted by a private sector firm is required and we requested the troika and Cyprus to agree on the terms of reference for such an assessment within a week,” he added.

There was no immediate reaction from the government on either issue after the meeting.  But beforehand, Finance Minister Vassos Shiarly said the issue of imposing losses on depositors was not acceptable under any circumstances.

He did, prior to the meeting, reiterate that Cyprus welcomed an independent audit into its anti-money-laundering system, but insisted the probe be assigned to international institutions.

“Our position is very clear: we have nothing to hide, we shall accept checks, just as we have agreed to checks from the International Monetary Fund, Moneyval and the Financial Action Task Force (FATF), international organisations that are ordained to carry out such checks,” Shiarly said. 

He added: “We are open to these international organisations at any time, even today, whenever they want.” By allowing Nicosia a say in picking the auditors, it appears a face-saving solution was achieved for all concerned at yesterday’s Eurogroup meeting.

Cyprus, which recommended the audit, was averse to a subsequent counter-proposal made by eurozone officials that the probe be assigned to a private sector auditor.

Such a move could raise questions about bank data confidentiality and scare foreign depositors away, the government said.

Some EU officials acknowledge that Nicosia has nothing to conceal, but say an audit by a private firm would help clear the air and thus overcome reservations among bloc members to endorsing financial assistance for the island.

Last week senior eurozone finance ministry officials told Cyprus it should “rapidly” order an independent audit into its anti-money laundering system.

Should the audit show that the country needs to do more in “two or three areas” to improve its practices in fighting money laundering through its financial system, the shortcomings could be introduced into the memorandum of understanding for Cyprus's bailout,  an EU official was quoted as saying. The audit could be quickly conducted by a private sector company and clear the air on those money-laundering allegations, the same official had said.

Eurozone officials have reportedly cited two reasons for a private firm taking the job: first, the audit could be speedily completed in time for a bailout deal, mooted for March; and second, organisations such as Moneyval focus more on the legal framework in place and less on the actual enforcement of measures to combat money laundering.

Cyprus has been in talks with the EU and the IMF for seven months to secure a much-needed bailout. Concerns about the country's links to Russian money and its reputation as a money-laundering and tax haven have hampered the talks and made the bailout deal politically controversial, especially in Germany.

Nicosia vehemently denies the money laundering allegations, citing recent assessments by the IMF and Moneyval which gave the island high scores.

Moneyval is a Council of Europe committee of experts which assesses its members’ compliance with all relevant international standards in the legal, financial and law enforcement sectors through a peer review process of mutual evaluations.

Moneyval’s aim is to ensure that its member states have in place effective systems to counter money laundering and terrorist financing and comply with the relevant international standards in these fields. 

Such standards are those contained in the recommendations of the FATF, including the Special Recommendations on Terrorist Financing, the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, and the United Nations Convention against Transnational Organised Crime.

Finance minister Vassos Shiarly and ECB head Mario Draghi

PRESIDENTIAL CANDIDATE Giorgos Lillikas is locked in a legal battle with local daily Politis after both sides announced plans to sue and counter-sue for libel in the run-up to the election. 

Lillikas was first to take the matter to the courts after Politis linked his time as cabinet minister under the Tassos Papadopoulos government to a number of contracts signed by companies associated with his wife’s communications company Marketway and state and semi-state organisations. 

The paper alleged that companies associated with Marketway won contracts with the Cyprus Tourism Organisation (CTO) worth up to €9.5m between 2004 and 2007, during which time Lillikas served as commerce minister. 

In response, Lillikas cited a letter written by the CTO administration director Yiannis Koui on January 28, 2013, highlighting that the semi-state tourism organisation did not close contracts exclusively with Marketway during that period. 

The EDEK-backed presidential candidate accused Politis of mud-slinging and “contemptible motives”. Lillikas said the paper went too far and that he would no longer accept an apology, but would make sure the “mudslingers” pay for the allegations in the courts. He pledged to donate any proceeds to charity. 

Today, in response, Politis is expected to file a €2m counter-lawsuit against Lillikas for libel against the paper. 

In yesterday’s edition of the local daily, the paper published excerpts of another letter from the CTO dated January 10, 2013, which notes that two companies, Publicis and SporTeam signed contracts with the CTO during that period for over €9.5m. 

Politis further highlighted that on the website of Marketway, run by Lillikas’ wife Barbara Petropoulou, the advertising company’s logo states clearly its association with French communications giant Publicis.  

In a separate issue, Politis alleges that Marketway and the Greek subsidiary of Publicis made a joint bid to take on the awareness campaign for adoption of the euro on behalf of the finance ministry in 2006.  When they failed to win the tender, the consortium appealed to the Tenders Review Authority, where Petropoulou allegedly represented the Marketway-Publicis consortium.

HEAD of the Cyprus Citizens’ Movement Andis Christoforides yesterday accused the broadcasting authority of “arbitrary censorship” after the latter ordered television channels to pull a paid ad campaign video for presidential candidate Giorgos Lillikas called ‘The Nightmare’. 

The 32-second video shows the facade of the presidential palace a month after the presidential elections. A phone rings in the palace, and the caller, with a slight American accent, is heard congratulating the new president on his election. 

“Now, we need to move on. A package deal: the bailout, the gas, and a new Annan plan. We trust you are in agreement with this” says the caller.  The ad then cuts to a man who wakes up from a nightmare, with the voiceover saying: “Who do you trust to answer this phone call?” 

The video was commissioned by the Cyprus Citizens’ Movement, which supports the EDEK-candidacy of Lillikas.  In a released statement, Christoforides hinted that the head of the broadcasting authority Andreas Petrides chose to axe the video clip based on his political affiliations. 

Before the authority pulled the plug on the paid video, the clip had been shown on Sigma TV, Antenna, Mega and RIK.  He expressed the hope that the public soon wakes up and realises that “its worst nightmare is starting to become a reality”. 

In response, Petrides issued a statement highlighting that Article 34 (D) of the broadcasting law prohibits negative advertising against an opponent or party in a paid political advertisement during an election period. 

After viewing the video clip, the authority concluded that ‘The Nightmare’ fitted the bill of negative advertising, since it takes place in the future and speculates on situations that have not yet occurred, in a clear dig at Lillikas’ political opponents, said Petrides.

“The Authority considers the advertisement projects an unsubstantiated, unfavourable image of an opponent,” in contravention of the law, he said. 

As a result, all TV stations are required to refrain from broadcasting the paid ad with immediate effect, added Petrides.  

Meanwhile, the spokesman of presidential candidate Nicos Anastasiades, Tasos Mitsopoulos, yesterday welcomed the legal opinion of the unit for combating money laundering (MOKAS) which cleared Anastasiades’ law office of any wrongdoing, following initial allegations of dodgy dealings.  

“After an in-depth investigation of the case, it was clarified that the legal activities of the law office were perfectly legal and fell within the framework of standard professional services offered,” he said. 

Mitsopoulos reminded the public that the MOKAS investigation was launched at the request of Anastasiades, while those who made the initial allegations against his law office refused to come forward and submit an official complaint. 

In a dig at Lillikas who has met accusations of corruption with lawsuits, Mitsopoulos noted that Anastasiades chose to let the truth shine before the elections by seeking a full investigation, rather than engage in lengthy court cases.  

Earlier this month, Attorney-general Petros Clerides announced that MOKAS would probe allegations of dodgy financial dealings implicating Anastasiades’ law firm made on a Greek website.

According to a statement released by the Legal Service yesterday, the subsequent investigation provided no evidence or suspicion of illegal activities regarding the two transactions referred to by the website. 

A MEETING of Popular Bank shareholders was disrupted yesterday as bondholders who claim they’ve been cheated, could not restrain their anger and rage. 

The meeting was abruptly ended by head of the board Andreas Philippou after bondholders became overly vociferous shouting” thieves, thieves’ and “get out, get out”.

Police were forced to intervene when some of the angry bondholders moved threateningly towards members of the board, forcing Philippou to call a premature end to the meeting

The bondholders said they recognised however that it was not the bank’s current board which was to blame for allegedly deceiving them when they invested.

In his attempts to keep the peace, Philippou attempted to give assurances to the bondholders’ persistent questioning, revealing that the board of the Popular Bank was in constant touch with the Central Bank and Finance Ministry to resolve the matter.

“Any solution must be approved by the EU and troika because the bank is currently being supported by the state,” Philippou repeated several times.

“For the best possible solution we must wait until a bailout agreement is signed,” he added.

Most of the Popular Bank’s bonds are non-convertible.

Many bondholders revealed names of bank managers who had urged them to convert their money to bonds.

A number of investors approach Popular chief Andreas Philippou during the meeting (Christos Theodorides)

ALTHOUGH Cyprus saw an overall 3.0 per cent increase in tourist arrivals to 2.46 million in 2012, the island is going through the worst winter season in 20 years, head of the Cyprus Hotels Association (PASYXE) Haris Loizides said yesterday. 

Speaking at the 35th Annual General Meeting of the association in Nicosia, Loizides spoke of the significant role the tourist industry plays in dealing with the consequences of the economic crisis and he said the “stagnant” industry needed more support from the government.

The theme of this years’ conference was ‘Building our future through sustainable strategic alliances by taking advantage of our proven benefits’.

Loizides revealed during his speech that hoteliers had made significant concessions during the lean winter period with profits plummeting by 15 and 16 per cent in some cases, as hoteliers had chosen to themselves absorb the high costs of electricity. “This has been the worst winter period in the last 20 years,” he said.

“There is a series of taxes and other charges on the tourist industry putting a strangle-hold on any chance of progress. People in the tourist industry reacted angrily to a proposed raise in property tax as part of the bailout agreement. If this tax is imposed it will make Cyprus a completely unrealistically expensive tourist destination,” he added. 

He criticised the state for not acting sooner in relation to the financial crisis, saying all the warning signs were there but no action was taken. 

“We don’t refuse to contribute to the recovery of the economy but we want to pay what we can afford. We are expecting the state to stand side-by-side with us and co-operate with businesses and productive areas of society so we can develop again as an industry to create new jobs and income for the state.”

Loizides expressed his satisfaction at the decision to shift the period of chartered flights from St. Petersburg and Moscow to between March 15 and November 15 to cater to Russian demand. Normally the summer season ‘officially’ begins on May 1 and ends on October 31 but the cabinet last week extended the period.

Commerce Minister Neoclis Sylikiotis told the conference this would mean an additional 100,000 Russian tourists, and another €120 million in revenue.

The minister said 2012 had been a good year in terms of revenue, which had gone up 10 per cent but he did concede that this year would be difficult. Referring to declining markets such as the UK, Germany and Scandinavia, Sylikiotis said: “We hope to at least keep the same levels as 2012.”

Sylikiotis again urged the hoteliers to make an effort to hire more Cypriot workers, both in terms of employment, and it terms of showing a ‘Cypriot’ face to tourists. 

Loizides said the suggestion was already up for discussion with stakeholders and unions.

 “We will do our best to hire Cypriot workers in the industry,” he said.

PASYXE chairman Haris Loizides (L) with Commerce Minister Neoclis Sylikiotis (centre) and DG of PASYXE Zacharias Ioannides at the opening of the annual products exhibition

THE labour ministry announced yesterday that it had issued notice, effective immediately, for the closure of the two chemical factories in Pera-Chorio Nisou. 

The department of labour inspection issued the notice, stating the factories seriously threatened the health of employees.

The decision was made following the meeting between representatives from the village and Labour Minister, Sotiroulla Charalambous, on February 8, after residents had closed off the two factories, citing serious health concerns. The minister had told the representatives she would implement the law which fell under the ministry’s jurisdiction.

The ministry’s decision came a day after Agriculture Minister, Sophoclis Aletraris, revealed the government would be looking into suspending operations of the chemical factories by seeking a court order. 

Speaking after a meeting with the Pera Chorio-Nisou community council leader, Aletraris said the two discussed local residents’ demands to shut down the two chlorine and paint-producing factories located within the village’s residential area. 

Aletraris said a number of inspections carried out at the chlorine factory found evidence of improper waste management. For this reason, he has sought the launch of criminal proceedings to obtain a court order preventing the factory’s further operation.  A court date has been sent for March 20. 

Aletraris added that the factory could no longer be allowed to continue operating in the area.

Residents protest yesterday before the labour ministry announced it had issued notice, effective immediately, for the closure of the two chemical factories in Pera-Chorio Nisou (Theodorides)

PRESIDENT DEMETRIS Christofias will address the nation tomorrow night, providing an overview of the achievements of his government in the last five years. 

Christofias had originally planned to hold a press conference today at midday. The presidential palace sent out invites last week to journalists to attend the live event scheduled for today. 

However, the palace press office informed news outlets yesterday morning that the press conference, where Christofias would have accepted questions from journalists present, had been cancelled. No reason was given for the cancellation. 

Instead, he will read out a 20-minute recorded address to the state which will be aired tonight after the evening news on the state broadcaster CyBC. Journalists will not be present to pose questions on his government’s achievements during the last five years.  

Asked why the address had been moved to Friday evening, a government source said it had something to do with the availability of CyBC camera crews. 

Christofias’ address to the nation will likely be the last before this Sunday’s presidential elections. Under Cyprus’ electoral laws, election campaigns have to wrap up from midnight tomorrow, with no electioneering allowed 24 hours before the elections.

INTRODUCING a prescription transaction fee at private pharmacies, and deregulating the price of over-the-counter medicines (OTC) means consumers will be paying more for medicines, EDEK MP Marinos Sizopoulos said yesterday. 

Sizopoulos called a news conference following the health ministry’s updated pricelist for medicines, published on Monday, which brought about an average reduction of 7.0 per cent but introduced the one euro transaction fee. 

The MP criticised the fee because it would mean patients paying more for even small transactions.

“(Consumers) would need to pay €4.50 for medicine worth €3.50, a 28.6 per cent per cent increase, and they would pay €11 for drugs worth €10, a 10 per cent increase,” Sizopoulos said. 

This will make people buy more OTC drugs “and since the market is liberalised (OTC) drugs’ prices will be significantly raised,” Sizopoulos added. 

The health ministry now allows manufacturers to set whatever price they want for OTC drugs, a move that has resulted in price increases for roughly half of those available on the market, the Cyprus Mail was told. 

The updated price list has been set by getting the average prices of four EU countries, one expensive, one cheap and two in the middle of the range. 

From the list of 4,191 medicines, prices have gone down for 1,892, while 1,815 have remained unchanged and 484 – mostly OTCs – are now more expensive. Prices for prescription drugs under €10 have remained untouched, to ensure manufacturers continue making them. 

Sizopoulos criticised the ministry’s pricing policy, which he said impacted the private sector but did not change the state’s policy on the purchase of pharmaceuticals.

Auditor general Chrystalla Georghadji said in her 2011 report that the state bought 79.7 per cent of drugs provided to the state from only 20 of a total of 88 suppliers, spending as much as 38.7 per cent of its budget on 25 specialised medicines. 

The health ministry responded to Sizopoulos in an announcement saying it was already clear that price reductions would range from 6.0 to 7.0 per cent compared to 2012. Consumers will save between €9 million and €10 million “and the health ministry is sure that the public will benefit significantly from the new pricing policy,” the announcement said. 

Consumers spend close to €250 million a year on drugs, according to Georghadji.

The price of Aspirin (20 tabs) has gone up from €1.80 to €2.30, Aspro Clear (18 tabs) went from €2.98 to €3.16 and Panadol Cold and Flu (24 tabs) now costs €5.36 compared with €4.86.  The prices of some more expensive, specialised drugs have dropped. 

Antidepressant Abilify (28tabs) used to cost about €260 to the end consumer and now costs around €253.

THE government will not accept a money-laundering audit from a private company, the spokesman said yesterday, as he categorically rejected any thoughts of forcing losses on uninsured depositors as part of the island’s bailout.

 “We made this position clear with arguments and it was given to the Eurogroup in writing,” Stefanos Stefanou said. “We condemn and reject efforts by certain circles in the EU to blackmail Cyprus into accepting new and dangerous procedures.”

Eurozone finance ministers decided on Monday that a private-sector auditor would probe Cyprus’ compliance with anti-money-laundering regulations as the island drew no clear support from  its partners on its refusal to impose losses on bank depositors as part of a bailout programme.

"We agreed that an independent assessment conducted by a private sector firm is required and we requested the troika and Cyprus agree on the terms of reference for such an assessment within a week,” Eurogroup president Jeroen Dijsselbloem said.

Stefanou said it was an oxymoron for certain Europeans not to trust mandated committees like Council of Europe’s Moneyval, which has carried out four checks in Cyprus since 1998.

“Their stance shows bad faith, it shows expediency, and malicious intentions against Cyprus,” Stefanou said. 

The spokesman also rejected talk of a haircut on uninsured deposits.

“I want to make clear that such an issue is not being discussed. Such an issue will not be discussed and will never be accepted,” Stefanou said.

The matter has surfaced in the past but it became especially prominent after a report in the Financial Times on Monday.

It was made worse by the apparent refusal of European officials to give a straight answer on the matter.

Asked on Monday if he could exclude the idea that depositors in Cyprus would lose money under the bailout, Dijsselbloem avoided a direct answer: "Tonight where Cyprus is concerned we zoomed in on the issue of anti-money laundering and didn't go into any possible, or not possible, elements of a programme so I can't go into these elements with you.”

Citing a confidential memo, the Financial Times reported  that a proposal had been made to 'bail-in' investors and depositors of Cypriot banks, a move that would reduce the amount of financial assistance required by Cyprus.

The new plan has not been endorsed by its authors in the European Commission or by individual eurozone members, the FT said. The memo warned that “risks associated with this option are significant”, including a renewed danger of contagion in eurozone financial markets, and premature collapse in the Cypriot banking sector.

HAS CYPRUS angered its European partners so much that they are now considering punishing bank depositors and annihilating the banks? The latter would be a certainty if the Eurogroup even discussed the preposterous idea of a haircut of bank deposits that was contained in a confidential memo prepared by the European Commission and leaked to the Financial Times. 

Although the plan had not been endorsed by the Commission or any Eurogroup member-state, according to the Financial Times, it “is intended to produce a more sustainable debt solution for the country, cutting the size of Cyprus’ bailout by two-thirds, by involving more foreign depositors and bond holders.” This would be done by imposing losses on bank depositors and sovereign debt restructuring (a hair-cut of 50 per cent on sovereign bonds).

It beggars belief that such an idea would even be entertained by the Commission after all the difficulties the euro has gone through in the last few years. At a time when stability was returning to the euro-zone, such a proposal would send shock waves through Europe – not because of the certain collapse of the economy but because confidence would be shattered. Bailing in bank depositors in Cyprus could trigger bank runs in other, financially weak eurozone countries, a point made in the memo.

And what credibility would the Eurogroup have after taking such a decision? When bank deposits in Eurogroup countries are not safe – Cyprus may be tiny but a precedent would have been set – the euro would suffer. And what about the assertion by eurozone leaders that Greece would be the only country to default on sovereign debts. Could anyone believe anything they say ever again?

The publication of the memo would have done significant harm to Cypriot banks, even though we do not expect them to announce that deposits were being withdrawn. The Monday night refusal by the Eurogroup president Jeroen Dijsselbloem to rule out this possibility did not help either. Commissioner Olli Rehn was left to pick up the pieces on Tuesday, categorically stating that the Cyprus government debt would not be restructured to impose losses on private sector creditors; the Greek haircut was an isolated case he said.

Former finance minister Michalis Sarris believed talk of a haircut was a way for the Commission to apply pressure on Cyprus in view of the fact that negotiations had dragged on for too long and the issue of the bailout needed to be concluded. This could have been the reason behind the leak of the memo, but it did not help Cyprus’ ailing banking sector.

THE EUROPEAN COMMISSION last night proposed increased DNA testing of meat products to assess the scale of a scandal involving horse meat sold as beef that has shocked the public and raised concern over the continent's food supply chains.

"The tests will be on DNA in meat products in all member states," European Union Health Commissioner Tonio Borg told reporters after a ministerial meeting in Brussels to discuss the affair.

The initial one-month testing plan would include premises handling horsemeat to check whether potentially harmful equine medicine residues have entered the food chain, Borg said, with the first results expected by mid-April.

"This is impacting on the integrity of the food chain, which is a really significant issue for a lot of countries. Now that we know this is a European problem, we need a European solution," Irish farm minister Simon Coveney told reporters as he arrived for the meeting.

In Cyprus authorities were yesterday looking into a Cypriot company as part of a Europe-wide investigation over fraudulent labelling of horsemeat contained in some food products. 

The affair has implicated operators and middlemen in a host of EU countries, from abattoirs in Romania and factories in Luxembourg to traders in Cyprus and food companies in France.

Authorities said the Limassol-based company was involved in the trade of meat but only through instructions it passed on to other countries.

“What is being investigated at the moment is whether this company is implicated or other companies that are intermediaries in the food chain,” said Christos Christou, health services deputy director. “It is not this company that delivered the product to the manufacturers, but it has delivered it to some other companies, which in turn passed it on to the factories.”

The affair began in Ireland when horsemeat was found in frozen beef burgers. Christou said various documents have been collected from the company’s offices but no clear conclusions could be drawn yet.

“Whatever comes up is conveyed to the European Commission and given to the authorities of the other countries which have the problem,” Christou said.

The company does not deal with the Cypriot market.

Supermarket chain Carrefour has already announced it was withdrawing a batch of Cannelloni Bolognese as a precaution because they were produced by Comigel, a company linked to the affair.

The withdrawal concerns the 600 gramme packaging, bar code 3560070398515. Consumers who bought the product were asked to return it.

Alfa Mega supermarkets also announced yesterday it was carrying out all necessary checks, assuring its customers that none of the products on sale contained horse meat.

The European Commission said it was working with the French, Romanian, Dutch, Luxembourg and British authorities and has called a meeting tomorrow of the Standing Committee on the Food Chain to discuss the situation with all member states the situation. 

The EU food safety system is one of the safest in the world. Thanks to this system and its capacity for full traceability, national authorities are in a position to investigate this matter so as to find the source of the problem, the commission said.

EU officials have said there is no risk to public health from the tainted foods. But the suspected fraud has caused particular outrage in Britain, where many view the idea of eating horse meat with distaste, and exposed flawed food controls.

Britain's farm minister said the type of tests that revealed the problem should be carried out routinely in future.

"I would like to see DNA testing of processed meat products during process and as finished products established as soon as possible right across every member state," Owen Paterson said.

Both ministers urged EU authorities to propose changes to labelling rules that would force producers to give the country of origin on processed meat products. Currently the requirement only applies to fresh beef, and will be extended to fresh lamb, pork and poultry from Dec. 2014.

The European Commission, which oversees EU labelling rules, said it was studying the option. But officials have warned privately that the complexity of supply chains would make this almost impossible to implement.

EU and national authorities are still trying to uncover the source of the suspected fraud.

"All those countries through which this meat product has passed of course are under suspicion," EU health commissioner Tonio Borg told a news briefing yesterday. "By the countries, I mean the companies in those countries which dealt with this meat product."

He added that it would be unfair at this stage to point the finger at any organisation in particular.

(Brussels reporting by Reuters)

Workers process beef meat at DOLYCOM abattoir one of the two Romanian companies exporting horse meat to EU countries AFP

THE Radio and Television Broadcasting Authority of Cyprus yesterday announced that its offices would remain open during this Sunday’s presidential election to provide information or receive complaints from members of the public. 

The offices will be open on Sunday from 9am until polling stations close at 6pm. Members of the public may contact the Authority by calling 22512468.  

The announcement reminded the public that people may call a separate number- 80004444- on a 24-hour basis where they may leave an answering message either passing on views or suggestions or complaints to the Authority of possible legal violations by radio or television broadcasters.   

LEGAL regulation of collective agreements would be a time bomb, employers warned yesterday, registering their strong objection to a government bill that authorises the labour minister to extend agreements to all employers in a given sector.

The chamber of commerce and industry (KEVE) said attempting to change the system would create huge upheaval and deal a blow to labour peace.

“Free negotiations and the industrial relations code will be undermined,” KEVE said. “Such an action will be a time-bomb to the successful three-way cooperation based on free collective negotiations between social partners.”

The bill, approved by cabinet on Thursday, was submitted to parliament yesterday.

According to the accompanying report, the extension aims at securing equal treatment in the sector while “combating the potential of some employers to use unfair practices” like undeclared and illegal employment, personal contracts with worse conditions than those provided for in the collective agreement. 

“Extending the collective agreement can be sought by a union, an employer organisation or it could be examined by the labour ministry itself if it judges that it would serve public interest,” the report said.

Employers, who had expressed their objection to the bill before its approval by the cabinet, stressed that they would not accept changes to the current state of affairs.

“There is no question, not even of discussing the possibility of changing the current system of labour relations, which will cause continuous unrest with unpredictable catastrophic consequences for the country’s economy,” KEVE said.

“The tripartite model of cooperation in Cyprus is an example to follow abroad and was often praised by the International Labour Office,” KEVE said. “This is the system that helped our economy grow.”

Unions accepted the government proposal.

Left-wing PEO welcomed the cabinet’s decision and yesterday it urged parties to approve the bill at parliament and not to side with the employers who disagreed for “obvious reasons.”

RUSSIA has assured Cyprus that it is prepared to contribute towards resolving the island’s economic problems as part of an agreed support package, it emerged yesterday.

The assurances were given during a meeting between Russian Finance Minister Anton Siluanov and Central Bank Governor Panicos Demetriades and his deputy Spyros Stavrinakis in Moscow.

“It was a very constructive and positive meeting … the finance minister assured that Russia is ready to contribute,” Central Bank spokeswoman Aliki Stylianou told state radio.

The one-hour meeting was held on the sidelines of a high-level seminar held by the Eurosystem – European Central Bank and 17 member-states – and the Bank of Russia.

Stylianou said it was almost certain that Russia would extend the repayment period of a €2.5 billion loan extended to Cyprus in 2011.

It was not however clear if Moscow would also offer fresh cash, as part of the island’s bailout package.

Cyprus has asked Russia to extend the maturity of the existing loan to 2022 from 2016.

Last year, the island requested a new €5.0-billion loan, but Russia has not shown any sign so far that it was prepared to grant it.

Earlier this month, Siluanov said they were leaning more towards the extension as a contribution to the island’s bailout.

Extending the repayment period would help in making the island’s debt more sustainable and possibly avoid fresh austerity measures, including privatisations.

The island is looking at a potential bailout equal to its GDP – around €17 billion – a figure that would raise its debt to GDP ratio to 140 per cent.

It appears that everything hinges on the cash needed for bank recapitalisation, which reports suggest was around €10 billion. 

The figure has not yet been made public, despite the completion of a due diligence on bank portfolios.

THE NEW Menoyia detention centre was officially opened yesterday by Justice and Public Order Minister Loucas Louca who said the increase in illegal immigration called for the creation of such a facility.

“By creating places like the one we are inaugurating today we aim at the short-term stay of immigrants who are being deported,” he said. “The first phase of construction of this modern establishment was co-funded by the EU foreign border fund which contributed more than €2 million to the total cost of €9.58 million,” he added. 

Louca said the new centre could hold 256 people and met all the necessary EU standard of living specifications. 

He said those being held at  Menoyia would have certain benefits such as rest rooms, a library, television, radio and the ability to play sports. They would be allowed to communicate with their lawyers as well as buy products for personal use. They would also be able to practice their religion, and have been given allotted smoking areas. Those detained will also have the opportunity to be checked regularly by doctors to help prevent any illnesses. 

The Menoyia centre will only hold illegal migrants, including failed asylum seekers, rather than placing them in the notorious Block 10 holding cells on the grounds of the Nicosia central prisons. Block 10 and the Lakatamia police detention centre have been overpopulated for years, holding people in subpar conditions, according to the 2011 report by the independent authority on torture prevention.

Speaking at the opening Police Chief Michalis Papageorgiou said that concerted efforts by many over the years had seen the inauguration of a centre that would set the standard in Europe and internationally. 

“Until the date that the illegal immigrants are deported we will care for them, for their safety, their wellbeing, their physical state and also for their religious beliefs,” he said. “It is a great place and I am confident that instructions and regulations will be carried out in the best possible manner,” he concluded.

A committee was appointed by the cabinet last week to oversee the detention centre. The committee, falling under the auspices of the justice ministry, will visit the centre at least eight times a year to check on safety and security, as well as documentation and electronic data.

The committee supervising the Menoyia centre will include officials from the police, the migration department, social services, the finance ministry and the health ministry, Stefanou said.

There are now two centres in the Larnaca district, one in Menoyia and another nearby in Kofinou, and the state rents two hotels in Larnaca and Paphos to accommodate migrants, including asylum seekers who are waiting for their application to be reviewed.

Security will be provided by special constables, an issue of contention between parliament and government that had delayed the centre’s operation. The justice ministry was eventually given final say, going with the state’s original plan of using police, including hiring about 100 special constables at a cost of €2.8 million. 

Cyprus has managed to reduce the number of “migrants passing through” and decreased expenses stemming from obligations to provide support – including financial benefits. 

From spending €23.5 million in 2010, the state spent €10 million last year to provide for the needs of asylum seekers and people protected for political or humanitarian reasons.

The state is also looking to switch from providing financial help to handing out goods and gave parties a draft plan to consider in October last year, Stefanou said.

In 2008, 3,395 asylum seekers came to Cyprus, including 2,545 through the north. In 2009, there were 2,795 – 1,505 through the north and 1,290 through other ports of entry- and by 2010, some 2,498 people sought asylum, only 956 of whom came from the north, according to the latest complete police data. 

In 2005, there were about 11,500 pending asylum applications but the numbers are now down to around 1,000.

Brand new accommodation for the long suffering inmates at Block 10

PRESIDENTIAL candidates issued their final messages to voters as campaigning drew to a close at midnight yesterday ahead of tomorrow’s poll.

Frontrunner DISY leader Nicos Anastasiades pledged to form a national salvation government to lead the country out of the crisis.

He urged Cypriots to choose the path of bold changes, responsibility and credibility, and not that of populism, irresponsibility and refusal to change.

“Sunday’s elections are the most critical in our modern history (and) their result will define how we face the economic crisis,” he said. “A weak economy undermines our international standing. We ought to restore our credibility in Europe.”

Anastasiades said a lot must change in Cyprus, across several sectors.

“We need a new state model, transparent, productive and orderly,” he said. 

A state that will serve people, support the weak and be an ally in growth.

“We do not have the luxury of experimentation. The cost for the state and society grows with each day of inaction, each hour that goes by without making the necessary decisions,” the DISY chief said. “We need to act immediately.”

Stavros Malas promised a government that would work by consensus and in cooperation with parliament to achieve the best result for the country and its people.

He pledged to solve the problems of the economy by “sharing the burden equally, consolidating the public finances and creating conditions for growth.”

Being a new face in Cypriot politics, Malas sought to set himself apart from his opponents.

“I declare that I have no obligations (towards) nor ties with the country’s establishment,” the AKEL-backed Malas said. “That is why I can guarantee with credibility that anyone responsible for the crimes in the financial sector will be brought to justice.”

Malas said he has no shadows in his personal and professional course and thus he could guarantee strict enforcement of the rules of transparency and accountability for all state officials.

“We will progress and rise to the challenges of the new era with knowledge, determination, clear objectives, and aspirations,” Malas said, promising to form a coalition government if elected.

Giorgos Lillikas, the third main contender, insisted that the advance sale of natural gas could rid Cyprus of the painful conditions of a bailout.

“That is why I pledge to start negotiations from day one with all the companies that have already showed interest,” he said.

Lillikas said his proposal to pre-sell natural gas could “rid our people of the memorandum, misery, and poverty.”

“We have the potential to get our country out of the current dead ends. To remain economically and politically independent so that we will be able to prevent any plans of coupling the troika loan with a solution of the Cyprus problem based on Turkish demands,” Lillikas said.

He said it was up to the public now and while other candidates banked on abstention “we invest in the citizens’ participation.”

“At this difficult time, our country needs the citizens’ active participation. I urge people to vote on Sunday,” he said.

POLLING stations are ready for tomorrow’s presidential elections, Chief Returning Officer Andreas Ashiotis announced yesterday. 

A total number of 1,139 different polling stations will operate, both on the island, and also abroad.  Some 545,491 registered voters will have the right to cast their vote tomorrow in all five districts and at polling stations abroad.

The polling stations will open at 7am and close at noon for a one-hour lunch break, re-opening at 1pm and closing at 6pm. A new law has been put in place which will allow the chief officer at each polling station to extend voting hours until 9pm if a large number of voters have yet to cast their vote. Ashiotis expressed the hope that this would not be required as it had not been done in previous years.

Ashiotis explained the precise method that each voter needed to use so their ballot was not considered void. “Voters should place a plus sign, the letter X or tick the box under the candidate they wish to vote for,” he said. “Any other sign, placed anywhere else will not be accepted and that ballot will be considered void,” he stated. He added that if the front of the ballot was not stamped with the official stamp of the Returning Officer at the polling station then it would also be considered void. If voters chose two or more candidates or if they placed any other insignia on the ballot papers then their vote would not be counted, Ashiotis said.

He also gave a reminder that pre-election campaigning and any political party action were to end at midnight last night. “According to voting law, during the day preceding the day of voting, and during the day of voting, political advertisements, statements and events which are relevant to the elections are strictly prohibited,” he explained. “Any advertisements of any of the candidates must be removed by Friday night so that at midnight there will be none,” he added.

He pleaded with the rival camps to be extremely wary of such circumstances but admitted that it would be almost impossible to stop people on social networking sites from posting advertisements prior to the elections. “We are looking at the law to see if people will be charged for posting various comments on facebook or twitter,” he said. “I would like to ask people to refrain from posting anything though as we do not want to waste our time and state funds to track down these offenders,” he added.

Candidates have been given permission to speak to the press outside polling stations on Sunday as long as their comments are not controversial. 

Each voter must present his or her voting booklet and must also be registered on the voting catalogue of the polling station they go to, to be allowed to vote. The only exceptions to this rule are voters from the enclaved districts of Kyrenia and Famagusta who can show any state documentation as long as it has a photograph, like an ID card, driving licence or passport. 

Those wishing to vote abroad can do so by presenting either their voting booklet or ID card as long as they have registered at their relevant polling centre. Ashiotis wished to remind the public that voters should know which polling centre they would  be voting at but if they do not, they could visit the page wtv.elections.moi.gov.cy or call 77772212 to find out.

“We expect to have the result of the election by 8.30pm on Sunday,” Ashiotis revealed. “If no candidate receives more than 50 per cent of the vote then the two candidates with the most votes will face each other the following Sunday,” he added.

“The proclamation ceremony of the new President of Cyprus will take place at ‘Tassos Papadopoulos’ Eleftheria Stadium at a yet undecided time on either the first Sunday or second Sunday depending on the outcome,” he continued. “We are prepared for either,” he concluded.  

Ballot boxes at the ready - Christos Theodorides

CYPRIOTS love white cars and having babies in September according to Statistical Services, which yesterday released a host of interesting stats on its website as part the International Year of Statistics. “Our goal is to make people aware of the wide-ranging possibilities that statistics can offer all areas of society,” a statement from the service said.

There are more women currently living in Cyprus than men, with 51.4 per cent of the population being female, which goes towards proving the age-old statistic that women live longer than men, as the life expectancy of men is 79 and women 83.

The three most popular names for women in Cyprus are Maria, Eleni and Androulla while men are most commonly named Andreas, Giorgos or Costas. 

Most Cypriots get married early according to the Statistical Services, with 30 being the average age of men tying the knot and women being tied down at 28. One in three of those marriages do not last though with 307 out of 1000 couples getting divorced. 

Another well-known fact that is confirmed is that most Cypriot men’s subject of choice in higher education is business management and second favourite, engineering. The subject of choice for most women on the other hand is teaching. 

Women are rewarded substantially lower on average compared to men, with the fairer sex receiving an average monthly salary of €1,400 and men receiving €1,750 a month with the amount of public debt per person coming to €15,000.

According to the statistics almost half the population live in detached housing while 40 per cent in houses with central heating and the average size of these homes being 141 square metres.

For every ten inhabitants on the island there are seven registered cars while two in 1,000 people have reported to police they had been in an accident during the course of a year.

Cypriot dietary habits are also scrutinised by the statistics which show that every person in Cyprus consumes 58 kg of bread, 88 litres of milk and 57 litres of beer a year. And each person, according to the service, produces 660 kg of refuse. 

Mobile phones are very popular in Cyprus, shown by the statistic that for every one thousand people there are 1,266 subscriptions to mobile phone services.

About one in five have ordered goods through the internet with the most popular being booking vacations while one in six make bank transactions online.

Cypriots travel abroad at least once a year or spend a night at a hotel or other tourist establishment on the island, while they only visit the cinema on average once a year.

Social networking sites are very popular with young people aged between 16 and 24 with four in five Cypriots owning an account.

Spot the number of white cars

PRESIDENT Demetris Christofias gave his last televised address to the nation last night, expressing sorrow over the Mari tragedy and absence of a Cyprus solution while seemingly absolving himself of blame for both.  

In a recorded address on the achievements of his five years in government, Christofias said he felt bitter and sad over the many problems faced during his term in office. 

“The greatest sorrow is associated with the tragic accident at Mari, which caused me and my family distress, anguish, and deep sadness for the loss of lives. I would like once again to express my sympathy and support to the families of the victims,” he said.

The president said he also felt “great sorrow” for not being able to realise his lifelong ambition to solve the Cyprus problem, mainly due to Turkey’s continued intransigence and obstructive policy of preventing a solution based on UN resolutions on Cyprus. 

“My conscience is clear, because we did everything we could to reach a solution and more. Our efforts were acknowledged internationally.” 

He had some advice for his successor due to take over next month: “My own view is that the new president should continue to rely on the same principles and work on the same basis for a solution, like we did and all my predecessors did.” 

Christofias argued that he and former Turkish Cypriot leader Mehmet Ali Talat made “significant convergences” during peace negotiations, adding that it is no coincidence Talat’s successor Dervis Eroglu rejects those convergences. 

“He rejects them because they do not suit the partitionist policy of the Turkish side,” he said.   

The outgoing president warned those wishing to start negotiations from scratch- a clear reference to presidential candidate Giorgos Lillikas- that they will find themselves “on a collision course with the international community and will pay a high price”.   

Despite the ongoing global economic crisis and Eurozone crisis, Christofias argued that his government managed to achieve many of its goals. 

“There is no doubt that the greatest legacy the government leaves behind is the natural gas,” he said. 

He highlighted the discovery of gas reserves in Block 12 of Cyprus’ Exclusive Economic Zone and the exploration for more in five new blocks. 

The president said infrastructure work on a Liquefied Natural Gas terminal should start in 2015, and is expected to create 4,000 new jobs.  

Christofias argued that no one did more to enhance ties with Russia than his government, while highlighting the strengthened relations with Israel.  

However, his government’s main priority was strengthening the welfare state. 

“To achieve this goal we increased social benefits by 42 per cent,” he said, adding, “Even now, when the troika has forced us to cut social benefits, many are still higher than they were when we came to power”.   

The government also solved “once and for all” the water problem, said Christofias, noting: “Cypriots will never go thirsty again”.  

On migration, the government introduced a comprehensive migration policy, while reducing the costs of benefits to migrants from €23.5m in 2010 to €10m in 2012.

Regarding the economy, Christofias repeated the argument that Cyprus would not have needed an EU bailout if the Cypriot banks were not so exposed to the Greek economy. 

“Cyprus is the victim of the crisis in the banking system. All of Europe and the world recognises this,” he said. 

Thanks to the government’s tough negotiating stance, it succeeded in preserving the inalienable and sovereign right of the Cyprus Republic to decide for itself on the management of natural gas, he argued. 

The government also created the conditions to avoid privatisations, and preserve the wage indexation and 13th salaries, he added.  

“We never claimed we didn’t make mistakes or omissions,” said Christofias, adding that he would leave it to history and the public to judge whether the government was treated fairly or not by its critics.  

On a final note, Christofias said he would leave office with his head held high “because I did, in extremely difficult conditions, what I could to achieve the best for Cyprus”. 

In response, main opposition party DISY noted sardonically the burden of emotion Christofias must have felt as the first president in the history of Cyprus to leave office without seeking a second term. 

DISY said it was “disheartened” that Christofias did not find the courage, even in the final hour, to offer an apology, at least on behalf of the state, for the criminal mistakes which led to the Mari tragedy that left 13 dead. 

President Christofias giving his swan song