CYPRUS’ problems are far from over, President-elect Nicos Anastasiades said last night, as he pledged to conclude a bailout agreement as soon as possible in a bid to put the island back on the path of stability and growth.

Speaking to his supporters after cruising to victory in yesterday’s run-off vote, the DISY leader sought to unite Cypriots in the face of adversity.

“The problems we face are neither partisan nor ideological. The challenges and the problems we face affect all of us. That is precisely why we must all focus on dealing and resolving them,” he said.

The 66-year-old lawyer took 57.5 per cent of the vote, 15 points ahead of his anti-austerity AKEL-backed rival Stavros Malas.

Anastasiades said there were no winners or losers in yesterday’s elections but if there must be a loser “that should be pessimism and frustration. In this respect, the winning party should most definitely be hope and positive prospects.”

Anastasiades immediately pledged to hammer out a quick deal with foreign lenders and bring Cyprus closer to Europe, in a shift from the policies of the outgoing Communist government that first sought aid from Russia before turning to the EU.

"We want Europe on our side. We will be absolutely consistent and meet all our obligations. Cyprus belongs to Europe," he told jubilant supporters waving Greek flags and blowing horns. "We will restore the credibility of Cyprus in Europe and internationally. I promise you."

President of the European Commission, Jose Manuel Barroso, assured Anastasiades that he can count on help from the European Commission.

In a phone call after the results became known, Barroso said he assured Anastasiades “that he can count on the continued commitment of the European Commission to assist Cyprus to overcome the challenges it faced.”

The president of the European People’s Party (EPP), Wilfried Martens said the people of Cyprus “have sent a strong message to Europe by putting their trust into a person that has the leadership qualities and the credibility to bring the country out of the current economic crisis. Cyprus now has a reliable president that inspires confidence in Europe.”

The president-elect pledged to usher in a new era in Cyprus but warned that the island’s troubles were not over.

“The elections are over. The problems, however, are far from over and so are the difficulties faced by the people and the country alike,” the president-elect said. “The biggest challenge at this moment is for our economy to be set on the path of stabilisation and growth.”

The decisive outcome showed a clear mandate from Cypriots for an aggressive, pro-bailout approach to resolving the nation's financial quagmire, despite growing despondency over austerity measures that will have to accompany any such rescue.

“We intend to discuss and cooperate in a reliable manner with our European partners so as to achieve the earliest possible completion of the MoU agreement in a manner that safeguards vulnerable groups, social cohesion and peaceful labour relations,” he said.

Among his priorities, he said, was the restoration of public confidence in politicians through radical institutional changes, modernisation of the state and restoration of meritocracy.

“We will implement an ambitious programme of structural changes and reforms both in the state and in our economy,” the president-elect said.

Known for his no-nonsense style and hot temper, Anastasiades chided his supporters when they voiced disapproval of his opponents - Malas and third-place Giorgos Lillikas - and when, during his speech, he made an appeal to Turkish Cypriots.

He told the crowd that they should realise that the country would be partitioned if there was no co-operation with the Turkish Cypriots.

“I appeal to our Turkish Cypriot compatriots, and send a message of peace, friendship and sincere intention to seek a solution that will lead to a modern and European homeland that will respect the human rights of all its citizens and create the potential for progress, prosperity and the wellbeing of all citizens of the Republic of Cyprus,” Anastasiades said.

Anastasiades, who counts fellow conservative German Chancellor Angela Merkel among his contacts, has stressed his pro-European credentials stand him in better stead to seal a deal than the outgoing president, who is the EU's last Communist leader.

In a clear shift with the policies of his predecessor, Anastasiades said one of his first tasks would be to apply for Cypriot membership of the NATO-affiliated Partnership for Peace.

The Communist government had strongly objected to any NATO links, holding it responsible for what it says was a conspiracy to split the island in 1974.

"We need a government with weight that can talk to (EU) partners, that is cooperative, that can be heard and do what it pledges to do," the 2010 Nobel laureate for Economics Christopher Pissarides told Reuters.

"We hadn't been doing this until now. The most important thing is to signal our willingness to cooperate (with the EU)."

Preisdent-elect Nicos Anastasiades at Eleftheria Stadium last night

Victory celebrations

AN INVESTIGATION into the 44-metre tall tower crane which fell onto Phinikoudes promenade in stormy weather over four months ago, killing one and injuring three others, will finally begin next month, it transpired yesterday.

Head of the Labour Inspection Department Leandros Nicolaides told the Cyprus Mail that after the department carried out a preliminary investigation into the freak accident, it decided to bring in foreign experts for a closer examination of the reasons for the deadly fall of the 200-tonne tower crane. 

“It took us some time to find the appropriate authority as we didn’t want to go to the private sector. After seeking advice and looking around, we eventually decided on the Health and Safety Laboratory (HSL) which comes under the Health and Safety Executive in England,” said Nicolaides.

According to the HSL website, it is described as “one of the world’s finest, most respected scientific facilities” with over 350 highly qualified staff who carry out a number of services including incident investigations. 

“We had to clarify their mandate and negotiate a contract with them which took over two months of going back and forth over every word change in the contract. They also wanted a down payment. When we finally agreed on the contract, we had to go to the finance ministry to approve the budget,” he said. 

Nicolaides said the cost was somewhere around the €40,000 mark.  

With the budget approved, the department head expects the British experts to arrive next month. 

The labour inspection department has also coordinated with TC Tower Cranes Ltd, exclusive representatives in Cyprus of the German manufacturing company Liebherr Werk Biberach Gmbh which built the crane, to arrange for a representative of the German company to be in Cyprus at the same time as the British experts.

“We have kept all the evidence gathered, including weather data from the meteorological service and expect them to come in March with the final report ready by the end of March,” said Nicolaides who noted that the police investigation into the fall could only be completed after the department concluded its own probe. 

“After that, it’s a matter for the attorney-general as to what steps to take,” he added. 

Larnaca Mayor Andreas Louroudjiadis said yesterday that the local authority has completed its own in-house investigation into the procedures followed regarding the setting up of the construction site and the setting up of the crane back in November 2011. 

“We found nothing untoward regarding the procedures followed within the municipality and sent our report to the relevant bodies,” he said.

At around 8.30pm on October 10, in strong winds averaging between 6 and 9 Beaufort, the T-shaped crane- 44-metres in length and 80 metres in width- fell on to Phinikoudes promenade, killing a 65-year-old woman, injuring three others and damaging five cars.

The crane was part of a construction site managed by a contractor hired by the municipality to build an extra two floors on top of the town hall situated on Phinikoudes Avenue.

The fallen crane crashed down on a moving car containing Victor and Christine-Marie Coleman, 65 and 67, who were permanent residents of Vrysoulles village.  

The two had to be freed from the mangled car by emergency services before being rushed to hospital. Christine-Marie died at the hospital as a result of multiple injuries, namely haemorrhaging in her brain and lungs, while her husband sustained head and brain injuries and internal cranial haemorrhaging. 

A 47-year-old Iranian man lost his finger trying to flee from the falling crane on foot while a 60-year-old Cypriot pedestrian suffered a fractured hand.

Eye-witness accounts said the crane’s fall was broken by the cars underneath, which changed the direction of the crane as it hit the ground, narrowly missing a kiosk with seven people inside.

According to one industry website, towercranesupport.com, 17 per cent of tower crane accidents in 2010 (27 out of 157) were linked to high winds.

The 44-metre tall tower crane fell into Phinikoudes promenade in stormy weather

GERMAN Chancellor Angela Merkel said yesterday she was in favour of reviving Turkey's stalled talks on its relationship with the European Union but Cyprus remained a stumbling block.

Speaking during a two-day visit to Turkey, Merkel, who favours a "privileged partnership" for Turkey in place of full membership, said it would be right to open a new chapter in Ankara's negotiations with Brussels.

But she said failure to agree on the Ankara Protocol, which would extend Turkey's customs agreement with the EU by opening its ports to goods from Cyprus, was hindering Turkey's membership ambitions. "I said today that we should open a new chapter in the negotiations," Merkel told a news conference in Ankara.

"I must say however, that so long as the question of the Ankara protocol, which hangs closely together with Cyprus, is not solved, we will have problems in opening as many chapters as would be perhaps good and proper," she said.

"We can sign the Ankara Protocol only if the visa dialogue process with the EU is signed at the same time," Erdogan said at a joint press conference, underlining a long-standing demand that Turkish citizens be allowed visa-free travel in Europe.

BEING disabled in Cyprus is becoming more difficult after disability pay was recently reduced as part of the austerity measures, but for 50-year-old Belinda Salthouse, disability brings even more frustration. 

Suffering from Crohn’s disease of the bowel, and arthritis in her spine and of the sacro-iliac joints, the Briton who has lived in Oroklini for the last nine years had her application for a car disability sticker turned down.

“I’m outraged, and I believe it has nothing to do with my disability but rather that I’m not Cypriot and not on welfare,” Salthouse told the Mail. In her application to the department for social inclusion of persons with disabilities Salthouse clearly states that she receives benefits from England and wants nothing other than a car disability sticker. 

A letter from her doctor, Dr Marios Tsolakis, clearly states that as a result of her problems, she has significant mobility impairment and her application for a disabled badge was therefore supported. 

She was left perplexed after her rejection when she asked officials at the department the reasons. “They told me because I don’t receive welfare and because I’m not blind or in a wheelchair I don’t qualify for the stickers,” she explained. “But I told them I don’t want benefits. I thought that would be a positive, especially now there have been cuts to benefits,” she added.

In an attempt to get to the bottom of this apparent travesty of justice, the Mail spoke with an official from the department Salthouse had sent her application to. The law stipulates that to qualify for a car disability sticker you need to receive state benefit for severe mobility problems, you are blind or partially blind, have received funding to purchase a car from the state scheme aimed at helping disabled people or have a mental disability with additional mobility problems.

“Strictly speaking, unfortunately Mrs Salthouse does not qualify under current legislation for a sticker as her disability is not severe enough,” an official from the department said. “I did urge her to re-apply and object to the first ruling, in which case her application would be looked at by a council of doctors that study unusual cases like hers,” the official added. “I also urged her to be patient as the law will most likely be changed, although the process is quite slow, especially now that a new government has been elected,” she added.

Head of the Cyprus Confederation of Organisations of the Disabled (KYSOA), Christakis Nicolaides believes that strict rules need to be placed on who is eligible for the stickers. “There is no decent public transport and disability parking spaces are at a premium so unfortunately we have to be very strict with the regulations and cannot give out stickers to just anyone with mobility problems,” he said. “Even though someone might be eligible for a sticker in another country, each country has its own standards,” he added.

The vice-head of KYSOA, and head of the Paraplegic’s Association, Demetris Lambrianides did not agree with his counterpart, claiming that it is too easy for some to get the sticker. “If someone applies to get funding for a car because they are disabled then they automatically qualify for a sticker,” he revealed. “To qualify for funding you don’t need to be heavily disabled though,” he explained. Lambrianides told the Mail that in Cyprus there is no current competent department which can judge how disabled someone is. “Each case and each person needs to be looked at individually before judgement can be passed on how disabled they are and to what extent they have mobility issues,” he concluded.

AMID THE doom and gloom forecasts for the Cyprus economy, the Inland Revenue Department (IRD) yesterday announced a 20 per cent increase in tax collections for January compared to the same month the year before. 

According to data released yesterday, the €40.5 million increase is mainly due to a 47 per cent increase in revenue from the special contribution to the defence fund and a 28 per cent increase in company tax revenues.

The IRD’s total collections for January 2013 reached €240,259,908 compared to €199,738,918 in January 2012.

The collections from the special contribution to the Defence Fund climbed to €129m last month, compared to €87.8m in January the year before. Collections for corporation tax saw an increase of 28 per cent in January 2013, equivalent to €9.7m, taking revenue from just under €35m to €44.6m.

Revenue from public sector income tax saw a decrease of 20 per cent, going down from €16.2m in January 2012 to €12.8m last month.

Likewise, income tax from the private sector also decreased in January 2013 by 6 per cent, compared to the same month of 2012 (from €35m to €32.9m).

Income tax from the self-employed marked a huge decrease of 79 per cent in January 2013, dropping from €14.8m in January 2012 to just over €3m this January.

The temporary contribution demanded of the public and private sector increased by 918 per cent from €340,000 to €3.46m while capital gains tax decreased by 38 per cent, going from €3.9m to €2.4m. 

IRD revenue from stamp duty payments decreased by 9 per cent year-on-year, falling from €3.79m to €3.44m, while immovable property tax revenues also fell by 13 per cent, from €866,236 in January 2012 to €755,083 in January 2013.

The 20 per cent year-on-year increase in tax collections for January, taking the total to €240m, paints a less rosy picture when viewed in comparison with December’s tax revenue which reached €271m. 

Total tax revenue for 2012 came to €1.95 billion, revealing a 3 per cent drop, compared to the €2.02 billion collected in 2011.

CYPRUS is one of 13 countries from which Swedish giant IKEA has halted sales of its trademark Swedish meatballs after tests in the Czech Republic yesterday showed the product contained horsemeat.

IKEA, the world's No. 1 furniture retailer and known also for its signature cafeterias in its huge out-of-town stores, said it had stopped sales of all meatballs from a batch implicated in the Czech tests.

The checks were carried out in response to a Europe-wide scandal that erupted last month when tests carried out in Ireland revealed some beef products contained horsemeat. This has triggered recalls of ready-made meals and damaged confidence in Europe's vast and complex food industry.

"We take this very seriously," said IKEA spokeswoman Ylva Magnusson at the company's headquarters in Helsingborg, southern Sweden. "We have stopped selling that specific batch of meatballs in all markets where they may have been sold."

The meatballs, pulled from shelves at IKEA's stores after Czech inspectors discovered they contained horsemeat, had been available in stores in several European countries, the company's Czech spokesman said on Monday.

Besides the Czech Republic, they had also been on sale in Britain, Portugal, Netherlands,Belgium, Slovakia, Hungary, France, Italy, Spain, Greece, Cyprus and Ireland, Magnusson said.

All IKEA's meatballs are produced in Sweden by supplier Familjen Dafgard, which said on its website it was investigating the situation and would receive further test results in the coming days.

IKEA's Magnusson said hopes were that test results would determine the percentage of horsemeat in the meatballs, and that there was no indication any other batch had been affected.

In Italy, one of the countries where meatballs from the batch were withdrawn from sale, consumer rights group Codacons called for checks on all meat products sold by IKEA in Italy.

"We are ready to launch legal action and seek compensation not only against the companies who are responsible but also those whose duty it was to protect citizens," Codacons President Carlo Rienzi said in a statement.

The Czech State Veterinary Administration reported its findings to the EU's Rapid Alert System for Food and Feed, it said in a statement.

The inspectors took samples for DNA tests in IKEA's unit in the city of Brno from a product labelled as "beef and pork meatballs", the statement said.

Meatballs, a famous Swedish dish, have become a trademark for IKEA across its markets.

COMMUNIST AKEL yesterday censured President-elect Nicos Anastasiades for his stated intent to apply for Cypriot membership of the NATO-affiliated Partnership for Peace.

A party spokesman warned such a move would backfire on the divided island.

It was the first skirmish between the soon-to-be opposition AKEL and the Anastasiades government which takes power in a few days.

In announcing plans to join the Partnership for Peace (PfP), Anastasiades has manifested a major foreign policy shift from the outgoing administration of President Christofias.

AKEL is strongly opposed to any links with NATO, holding it responsible for what it says was a conspiracy to split the island in 1974.

Through its spokesman, AKEL reiterated yesterday that joining PfP would constitute a major strategic and diplomatic blunder.

The move would cast doubt on the Greek Cypriot side’s commitment to demilitarising the island subsequent to a political settlement, Giorgos Loucaides said.

In addition to undermining Cyprus’ credibility, he said, the move would play into the hands of Turkish diplomacy by taking the spotlight off Ankara.

Loucaides dismissed the notion that Cyprus was being blamed for its absence from the PfP programme, which is said to be causing problems in EU-NATO defence relations.

“We would actually be scoring an own goal because, by joining, the pressure would be taken off Turkey and shifted onto Cyprus,” he argued.

“Our people know all too well that NATO and its arms, like the Partnership for Peace, promote anything but peace. Instead, as events themselves have demonstrated, NATO is responsible for waging unjust wars, promoting juntas and dictatorships, and bringing death and bloodshed across the planet,” said Loucaides.

The matter should be debated at the National Council before any decision was made, he urged.

Anastasiades’ intentions, said Loucaides, served to expose DISY’s dogmatic persistence to “deliver Cyprus into the US-NATO tentacles.”

There was no immediate response from the DISY camp.

PfP is a North Atlantic Treaty Organisation (NATO) programme aimed at creating cooperation between NATO and other states in Europe and the former Soviet Union; 22 states are members.

Cyprus is the only EU member state that is neither a NATO member state nor a member of PfP. 

In February 2011 parliament voted to apply for membership in the programme, but President Christofias vetoed the resolution.

Turkey, a full member of NATO, is likely to veto any attempt by Cyprus to engage with NATO until the Cyprus problem is resolved.

But that’s precisely one of the arguments put forward by the other school of thought. By denying Cyprus access to PfP, Turkey would be made to look like the ‘bad guy’, they say.

Proponents of PfP maintain also that joining PfP would give Cyprus added leverage and an extra forum where it could promote its views with regard to the island’s political problem.

The Cyprus Center of Studies, a foreign policy and strategy think tank, favours joining the programme, and has compiled an extensive report on the subject.

Their report concluded that the cons of joining PfP were “virtually nil,” said Christos Iacovou, the think tank’s director.

On the other hand, a major drawback of not joining, he said, is that Cyprus is not eligible to receive classified information as part of the EU’s Common Foreign and Security Policy (CFSP).

Iacovou dismissed also the notion that joining the PfP would drag the island into NATO-led military operations.

Neutral states such as Switzerland, Austria, Sweden, Ireland and Finland are all members of PfP, but have no intention of joining NATO, he said.

What’s more, most of the former Warsaw Pact nations (including Russia) are now members.

IOANNIS Kasoulides and Michalis Sarris were yesterday confirmed as the President-elect’s picks for the ministries of foreign affairs and finance, respectively, as speculation raged over who would fill the remaining portfolios.

And Christopher Pissarides, awarded the 2010 Nobel Prize in Economics, is to head an economic policy council. It will be an advisory body with no executive powers, and directly answerable to the President.

Anastasiades made the announcement last night after a long day of deliberations, with dozens of people coming and going at DISY’s Nicosia HQ on Pindarou Street.

Additional names for the new Cabinet would be announced once they were “locked,” Anastasiades told eager newsmen.

Kasoulides, 64, is an MEP who had previously served as foreign minister under the administration of Glafcos Clerides. 

The 66-year-old Sarris would also return to familiar territory, having served as economy chief under the government of Tassos Papadopoulos.

Anastasiades should ideally name his full team before the new President’s investiture at the House of Representatives, scheduled for Thursday. Moreover, operating under the shadow of urgent bailout negotiations, the new government cannot afford to waste time.

The President-elect has pledged to form a government of “national salvation.”

Today Anastasiades confers with the leaders of the European Party EVROKO which openly endorsed his candidacy in the runoff vote - and with the Greens. A meeting was also being arranged with EDEK, though the socialists have previously stated they are not interested in participating.

With the horse-trading in full swing, theories on how the Cabinet would be divvied up are a dime a dozen.

Sources tell the Mail that Kasoulides would take charge of the foreign ministry for a short time only, as he has his eye on the European Commission. 

The Cypriot member on the Commission is currently Androulla Vassiliou, European Commissioner for Education, Culture, Multilingualism and Youth, but her term is shortly up.

Kasoulides, who would be nominated by the Cyprus government, would not necessarily take up the same portfolio on the European Commission, which is periodically reshuffled.

“The salary of a European Commissioner is around €200,000 per annum, far more than what Cyprus’  foreign minister earns,” the same sources pointed out.

Should this scenario pan out, Kasoulides would temporarily serve as Cyprus’ chief diplomat before moving back to Europe. The vacant post of foreign minister might then go to DISY’s Christos Stylianides.

Unsurprisingly, the key portfolio of the Commerce Ministry is generating a great deal of buzz; the prime candidate is said to be Manthos Mavrommatis, former head of the Chamber of Commerce and Industry. Academic Stavros Zenios, the former rector of the University of Cyprus, is reportedly also in the running.

To handle the natural gas brief, lawyer Giorgos Pamborides could be appointed deputy minister for energy - a new position to be created by Anastasiades.

Reports said auditor-general Chrystalla Yiorkadji had been offered the Interior Ministry. 

DISY MP Ionas Nicolaou is being widely tipped to head the justice ministry, despite his not-so-warm relations with the police force. Another possibility could be former DISY deputy Christos Pourgourides, who has expressed an interest in the job.

Meanwhile Philippos Patsalis, head of the Cyprus Institute of Neurology and Genetics, is being considered to head the health ministry.

Anastasiades’ partners DIKO have almost certainly reserved the defence ministry. Here, various names being bandied about: Vasilis Palmas, a former government spokesman; Fotis Fotiou, a former commerce minister; and DIKO MP Fytos Constantinou.

For the Education Ministry, a strong contender is Athena Kyriakidou, a DIKO MP hailing from Anastasiades’ hometown of Limassol - a bonus. Another possibility is Tasos Mitsopoulos, chief campaign spokesman for Anastasiades. Although Mitsopoulos is understood to have the ‘blessing’ of the Archbishop, sources say he is more interested in pursuing a career within DISY with a view to contesting the party leadership.

The name of Socrates Hasikos has come up for Under-Secretary to the President.

Ricos Erotocritou, a European Party cadre, has also been mentioned for a ministerial portfolio. It’s understood, however, that he has his heart set on becoming the next deputy attorney-general.

Michalis Sarris will take on the finance ministry mandate for a second time

PRESIDENT-elect Nicos Anastasiades' stance could make the country's negotiations for a rescue package less challenging than under the outgoing president, Fitch Ratings said yesterday. 

Anastasiades has stated his intention to secure "timely financial support," and now arguably has a mandate to conclude negotiations, Fitch said, also highlighting his relations with leaders of key European partners, including Germany.

“However, despite his overwhelming victory in the weekend's elections he will face the same policy challenges as his predecessor, and there is still lingering uncertainty about the timing and details of an EU rescue programme,” the agency said.

Fitch downgraded Cyprus to 'B'/Negative in January, mainly because it expected bank recapitalisation costs to be higher than previously thought.

But Fitch said it expected an agreement to be reached in time for Cyprus to pay a €1.4bn bond redemption on June 3. The final details will depend on the troika and the government's assessment of debt sustainability, which has not yet been finalised, it said.

“We believe a disorderly default stemming from the government running out of cash before the June bond payment is highly unlikely,” Fitch said.

A bailout programme is unlikely to include restructuring of Cypriot sovereign debt, because it would not provide significant debt relief, Fitch said.

“We expect the Cypriot government to privatise some state-owned enterprises as part of a final agreement with the troika, but there is uncertainty about how much debt relief this would achieve,” Fitch said. 

The agency added that it expected any restructuring of bank

debt to be restricted to junior debt holders, though banks are mostly deposit financed, which limits the potential impact. 

AFTER NINE years of uneasy relations with our EU partners, marked by mistrust and bad faith, President-elect Nicos Anastasiades seems determined to make a new start. He emphasised the point while addressing supporters at Sunday night’s victory celebrations, illustrating the importance he attributed to good relations with the EU.

His intentions were very clear. “We want Europe on our side,” he said. “We will be absolutely consistent and meet all our obligations; we belong to Europe,” he asserted before pledging “to restore the credibility of Cyprus in Europe.” The President-elect did not stop there, also announcing that one of the first things he would do would be to apply for membership of the NATO-affiliated Partnership for Peace, which was a big no-no for the anti-West, outgoing government. 

Anastasiades is absolutely right in wanting to build relations with the EU as these have been on rocky ground ever since we joined the Union in 2004. We joined under a cloud with top EU officials accusing the then president, the late Tassos Papadopoulos, of having deceived them with regard to the referendum. Relations remained strained throughout his presidency, as Cyprus tried to use the EU to turn the screw on Turkey and it was no secret that Papadopoulos was not on the best terms with his fellow EU leaders. 

President Christofias, with his anti-West rhetoric and public attacks on the neo-liberal EU made relations even worse. By the end of his term, after stalling bailout talks and then renouncing what he had agreed with the troika, the EU gave up talking to him as it regarded him untrustworthy and made things difficult for Cyprus. This was why Anastasiades’ pledge to restore the credibility of Cyprus in Europe should be commended. 

Our EU partners do not doubt the new President’s commitment to Europe and believe he is a man they could work with. Their reaction to his election win was very encouraging. In a joint statement issued yesterday, the finance ministers of France and Germany, Pierre Moscovici and Wolfgang Shaeuble respectively, said “discussions (on the bailout) should resume shortly with a view to reach an agreement before the end of March.” Until a few weeks ago, Schaeuble refused to give a time-frame for the signing of the memorandum.

The head of the Eurogroup Jeroen Dijsselbloem also sounded a positive note, saying that “it is in the interest of Cyprus as well as the euro area to reach an agreement rapidly” adding that the Eurogroup “is ready to assist Cyprus in its adjustment effort.” 

It is no exaggeration to say that Cyprus is being treated differently already and this is because we now have a president that believes in the EU and when he states “we belong in Europe” he actually means it.

IT SEEMS President-elect Nicos Anastasiades will not be getting a grace period from his European partners, as less than 24 hours after winning the elections, France and Germany called for a swift resumption of bailout talks with a view to concluding negotiations before the end of March.

It will not be all smooth sailing for Anastasiades however.

European policymakers are split over how to handle a bailout of Cyprus, with Germany and some other countries pushing for bank depositors to bear part of the cost and many other member states worried such a move will cause a bank run.

In a joint statement issued yesterday, the Finance Ministers of France and Germany, Pierre Moscovici and Wolfgang Schaeuble welcomed the result of the election, “which will allow for the formation of a government that will quickly continue with the negotiations about a financial assistance programme for Cyprus. Discussions should resume shortly with a view to reach an agreement before the end of March.”

The president-elect agreed with the statement.

“"Long term prospects for Cyprus are excellent as we are committed to carrying out necessary structural reforms. We only need a helping hand now," Anastasiades told Germany's best-selling daily Bild, according to advance excerpts of an interview to be published in today’s edition. "There is a pressing need to recapitalise our banking sector," said Anastasiades in the Bild interview. "I agree with Germany and France that we should reach an agreement by March."

Not long after the statement was published, Schaeuble’s spokesman said the German finance minister had not changed his view that Cyprus may not be systemically relevant for the eurozone as a whole.

"There is no change of mind. The minister will not be pushed ... but one can strive for (negotiations) to go as quickly as possible," Martin Kotthaus told a regular news conference.

"The minister and his French colleague wanted to express hope with their statement that you will get real momentum into the discussion, that that process will be quick (and that) questions such as money laundering, tax issues, sustainability and systemic relevance and such will be addressed quickly," Kotthaus added.

Eight months of talks on a Cypriot bailout package have turned the island into a big headache for the eurozone, triggering concerns of a financial collapse that could reignite the bloc's debt crisis.

Schaeuble however, has repeatedly questioned whether Cyprus, with gross domestic product of barely 0.2 per cent of the eurozone's output, is large enough for a potential default there to unsettle the 17-nation group, such a risk being a precondition for a bailout.

After the last meeting of euro zone finance ministers earlier this month, Schaeuble said there was no urgency in dealing with Cyprus.

Anastasiades will also have to deal with another problem: the form the bailout would take.

Germany, Finland and the Netherlands are among those who say taxpayers cannot be expected to go on financing euro zone bailouts, saying it is time for owners and depositors in risk-laden banks to accept losses on investments.

The concern is that announcing such a move will provoke the immediate, large-scale withdrawal of deposits from all Cypriot banks, where a large number of international investors, including many Russian and British companies, hold accounts.

Eurozone finance ministers will discuss options at a meeting in Brussels on March 4 but no decisions are expected, officials said, making a further meeting later in March likely.

Thomas Wieser, who heads the group of senior officials who prepare decisions of eurozone finance ministers, told Reuters last week an international bailout should be ready by the end of March.

While Cyprus is the eurozone's third smallest economy with annual GDP of only around €18 billion, a bank run could have repercussions across the single currency bloc and re-ignite the debt crisis, officials warn.

"We have to consider that risk," said one eurozone official whose country is undecided about whether a bail-in of depositors is the right course of action. "It's a real option but some countries don't want it."

The difficulty with Cyprus is finding a way to make a bailout sustainable so any money leant to it is repaid.

The island needs up to €17 billion, including 8-10 billion to recapitalise its banks and 7 billion to repay loans and finance ongoing government operations. That is equivalent to virtually its entire annual GDP.

Such a rescue would increase Cyprus’ debts to around 145 per cent of GDP, a level considered unsustainable. Greece's bailout calls for it to cut its debt-to-GDP ratio to 120 per cent by 2020, but that would also be unsustainable for Cyprus.

The International Monetary Fund and EU finance officials say Cyprus needs to cut its debt to 90-100 per cent of GDP before the country is capable of paying back what it owes.

The alternative is to impose losses on investors in Cyprus bloated banking sector, which is more than eight times bigger than the economy. Doing so would greatly reduce the cost of the bank recapitalisation and therefore the overall bailout.

The Cypriot banking system had deposits of €70 billion at the end of December, with a third of that held by non-residents, many of whom are Russian.

Olli Rehn, the European commissioner for economic affairs, has played down the idea of a bail-in of depositors, saying it is not the preferred option. But he still expects a far-reaching overhaul of the island's banking system.

"Our intention is to ensure a fair burden-sharing of the costs of restructuring and/or resolution of banks in accordance with EU state aid rules," he said last month via his spokesman.

One bail-in proposal that has been raised is to freeze all deposits over and above €100,000 -- the amount that is guaranteed by existing EU rules.

That sum would be held in an escrow account for 15-30 years, potentially earning very low interest, with the total used either as collateral against loans or to shore up the banks' capital base.

Another option is to impose a retroactive tax on deposits over €100,000, which many depositors may be willing to pay if the tax is not excessive and allows them to keep funds in Cyprus, where the corporate tax rate is attractively low.

A third option that some officials have raised is to offer Russia, which lent Cyprus  €2.5 billion in 2011, a debt-for-equity swap, with the loan exchanged for ownership of the Cyprus Popular Bank, one of the island's most indebted.

"There are a range of options but nothing specific has been put forward yet," one senior eurozone official whose country favours a bail-in said. "We're not at the stage yet of discussing how exactly it would be carried out."

For their part, Cypriot officials are determined there should be no bailing-in of depositors, fearing any such proposal will cause a flood of withdrawals and undermine the financial model underpinning the economy.

Instead, President-elect Anastasiades has indicated a willingness to study the privatisation of state assets and other measures to make a bailout pay for itself.

Another option would be to convince the Russians to extend their loan, which must be repaid in 2016, possibly for up to five years, or for Cyprus to turn to another close historical ally, Britain, to see whether it can offer a bridging loan.

It will not be all smooth sailing for Anastasiades

PAPHOS police are on the lookout after a spate of burglaries in the district saw €17,000 worth of jewellery stolen from a flat, two laptops and a small TV taken from another house and a paraglider stolen from a Paphos airport store room.

“An action plan is in place and there are increased patrols on a daily basis in the Peyia area,” a policewoman from Peyia police station told the Mail. “The orders came directly from the chief of police and we are taking all the measures possible to prevent crimes from taking place,” she added.

Peyia Mayor, Neophytos Akoursiotis was unwilling to comment.

Jewellery valued at €17,000 was taken from a 67-year-old British woman’s house in Peyia after the woman reported to police that her aluminium bedroom doors had been broken into during the previous two days that she had been away. A British man reported to police that his sister’s house had been broken into and two laptops and a small TV had been stolen. 

Head of Paphos airport’s civil aviation department reported to police that between December 2012 and February 23 of this year a store room at the airport had been broken into and a paragliding machine, valued at €6,000 stolen.

POLICE BELIEVE the recent attempted murder of a 26-year-old Limassol man is related to a money dispute between the victim and assailants. 

On Monday afternoon, two perpetrators tried to intercept the man’s double cabin vehicle on the Moutayiaka to Limassol road, using two Mitsubishi Pajeros. A number of shots were fired at the car but the 26-year-old and a passenger, 50, managed to escape. Police said the car had been hit by a bullet on the rear left door.  

The 26-year-old, who lives in Ayios Athanasios, named two people aged 21 and 23 as suspects, for whom arrest warrants have been issued.  

Limassol CID head Ioannis Soteriades said police were focusing their investigation on economic differences between the alleged target and the two suspects. 

BUSINESS owners in Paphos who are protesting against a 26-year-old plan to build a four-lane road say the idea is outdated and has not taken account of changes to the surrounding infrastructure.

Michalis Michael, chairman of the Union of Tourist Businesses for the Tombs of the Kings Road said: “This dual carriageway was initially designed in 1987. The surrounding area was nothing like it is now - there were hardly any buildings then. You can’t put a four-lane dual carriageway with double yellow lines each side and a four-metre wide central reservation here, it will kill the area.”

A meeting to discuss the issue will be held at O’Neil’s bar on the Tombs of the Kings Road at 3pm today. Concerned parties are being invited to attend.

“We will hear people’s problems over the proposed building of the new road and address their different needs. On Thursday we will meet with the mayor of Paphos and other officials,” said Michael.

Local businesses say they are fed up with their complaints falling on deaf ears and will demonstrate indefinitely against the planned new road by closing it at 11am every Saturday for half an hour.

Michael, who has operated a car-hire shop in the area for the past 15 years said the businesses want  wide pavements created on both sides of the road if the plan is to go ahead. They also want room for pedestrians to walk and sit.

Tombs of the Kings Road is not like Paphos harbour, which is a natural attraction and draws hundreds of tourists at a time, he said. “A new selling point for the area must be created, one which will encourage people to want to spend quality time here. It needs to be pedestrian-friendly.”

Despite the protests, the government, contractors and Paphos municipality recently signed the agreements for the project to go ahead.

“Who will want to sit outside a restaurant and eat next to a busy four lane road? We also don’t want a division in the centre of the road, we need parking and lighting and to upgrade the area,” said Michael.

The Tombs of the Kings road is a prime spot - situated close to the Paphos coast and home to many of the town's hotels and tourist complexes; in its heyday the area was buzzing with life. These days, pockets of well kept frontages are still proving popular with locals and visitors but a growing number of properties lie empty and unkempt.

“Local authorities and town planning gave businesses licences and they have gone on to invest in apartments and shops. The area has changed so much since the road was designed. Nobody will want to stay in a hotel with a view of a dual carriageway. It will also divide the area in two,” said Michael.

He said the road would effectively carve up the area with some businesses and residents being situated between the new road and the sea, and the less fortunate would be ‘trapped’ between the four-lane road and Paphos town causing their property prices to depreciate.

Last Saturday protestors again blocked the road saying that their demands were being ignored. They believe the widening of the busy tourist hub will also hamper tourists trying to cross the busy road and make deliveries to shops almost impossible.

One shop owner said: “These plans were drawn up years ago and the area has changed so much since then. Something needs to be done to invigorate the area and I don’t think a dual carriageway is the answer.”

Local resident Liz Carmichael, 53, said: “I agree that something needs to be done to tidy up the area; its very shabby as it is. I think making this road a four-lane dual carriageway will ensure any character which is left here will be wiped out. The road will be busy with through traffic and I think it’s a waste of money.”

After last weekend’s demonstration, Paphos Mayor Savvas Vergas tried to reassure the protestors.

“I understand that the shop owners’ interests are affected but they will realise its positive effects when the project is completed,” he said.

The proposed dual carriageway will eventually form part of a ring road around the town.

Businessmen say the road plans were drawn up in 1987 and since then the look of the whole area has changed

THE DRUG squad believe they have broken up a drug-ring after two customs officials, aged 58 and 53 were arrested on Monday afternoon, police said yesterday. The arrests came after German authorities were tipped off by Dutch authorities and found more than 12 kilos of cannabis at a courier’s in Frankfurt, on February 2, destined for Cyprus.  The drugs would have a street value going on €400,000 on the island. 

According to drug squad spokesman, Stelios Sergides, INTERPOL and EUROPOL both contacted the drug squad in their attempts to locate the responsible parties. 

After investigations were carried out, warrants were issued for the two men who were arrested on Monday, although a third suspect,  a 34-year-old, is still on the loose. 

Sergides revealed that the 58-year-old injured himself while he was being held and is now in Limassol General Hospital for observation. The 53-year-old was remanded for eight days by Limassol District Court yesterday.

Sergides revealed that local police and police from the British Bases were searching for the 34-year-old as he is believed to live in the Trachoni region of Limassol, which falls under Sovereign Base Area police jurisdiction. The man’s name has also been placed on the stop list.

In another drug-related story, Sergides told the Mail that a 34-year-old Greek-Cypriot contract soldier was arrested at Rome Airport on Monday afternoon after Italian Authorities found 15 kilos of cocaine in his baggage. The man was returning to Cyprus via Rome from Brazil. “The case is now in the hands of the Italian authorities,” Sergides said. “We are in contact with them and if any information comes out about any recipients of the drugs or accomplices we will be informed and will proceed in making the necessary arrests,” he concluded.

NON-GOVERNMENTAL organisation (NGO) Volunteer Doctors Cyprus will start offering free healthcare next month to serve the unemployed, vulnerable and those struggling on a basic salary, they said yesterday. 

The organisation, which is better known for its work in third-world countries and areas hit by natural disasters, has decided, given the economic crisis, to give something back to their own country. 

A healthcare unit will be set up on Antigonou 49 street near the Taht El-Kale mosque, and will be open to the public between 9am and 3pm on the weekends, as of March 9, an announcement from the organisation said. 

“The unit will treat incidents to do with pathology, cardiology and paediatrics, staffed with doctors and nurses of the organisation as well as friends who are volunteering their services free of charge,” the NGO said.  

One of the volunteer doctors, George Macriyiannis, said that one pathologist and one paediatrician would be posted on a given day to treat people who need immediate attention, e.g. are in pain, rather than people who have used state services and want a second opinion. 

The NGO expects to eventually be seeing about 50 people – 15 children and 35 adults – on a single day.  

A total of 11 pathologists, cardiologists and four paediatricians are on board to work on a rota, Macriyiannis said. He added the service would be available “for as long as necessary”.

 But he said their aim was to help everyone and with the financial crisis in Cyprus, the NGO felt they should focus on helping those closer to home. 

“Our missions are usually abroad, in war zones or areas of natural disasters, but this time round we wanted to put in an effort to help the unemployed and low-earners in Cyprus,” Macriyiannis said.

 The organisation said that they would be able to offer free or low-cost specialist services including radiological or microbiological tests, if and when necessary, by mobilising their existing network. 

People are asked to display proof of being unemployed or evidence of earning less than €850 a month. They are also asked to come with documentation on their medical history, including what medications they take. 

Find out more at www.volunteerdoctors.org.cy (Greek only).

PERSONS aged 65 or older in Cyprus were at a higher risk of poverty or social exclusion than at any other eurozone member-state in 2011, the European Commission’s statistical services, Eurostat, said yesterday.

In the rest of the bloc, only Bulgaria, at 61.1 per cent, posed a higher risk for the elderly in 2011.

EU-wide, in Cyprus, the elderly faced a 40.4 per cent risk of poverty or social exclusion, double the EU-27 average of 20.5 per cent.

The UK was also above the average at 22.7 per cent.  Iceland posed the smallest risk to the elderly at 4.5 per cent, followed by Luxembourg at 4.7 per cent and the Netherlands at 6.9 per cent.

Romania – which followed Bulgaria and Cyprus in terms of the risk to the elderly EU-wide – was at 35.3 per cent.

Persons at risk were those who fulfilled at least one of three conditions: living below the risk-of-poverty threshold; being “severely materially deprived”; and having very little work (for those aged 59 or less). 

People who lived in a household with a disposable income set at 60 per cent of the national median after receiving benefits were considered to be living below the risk-of-poverty threshold. The figures took into account the numbers and ages of household members. 

“Severely materially deprived persons” were those who met at least four of nine indicators: 1) inability to pay rent/bills on time; 2)could not keep house warm; 3) could not face unexpected expenses; 4) could not afford meat, fish or protein every second day; 4) could not take a week’s worth of holiday away from home; or 6) could not afford a car, 7) a washing machine, 8) a colour TV, or 9) a telephone. 

Those aged 59 or less, were also at risk if the adults in the household could only work on average at 20 per cent of their total work potential. Students were excluded. 

Across the EU, the average risk of poverty or social exclusion among those aged between 18 and 64 was 24.3 per cent, with Cyprus then lying below the average at 20.8 per cent. The UK was at 21.4 per cent. Bulgaria was again considered the most risky at 45.2 per cent while Switzerland was the least risky at 13.9 per cent although the country was above the EU average for the elderly with 28.3 per cent. 

The risk to children (younger than 18) was 27.0 per cent on average in the EU, with Cyprus well below that at 21.8 per cent and Bulgaria, at 51.8 per cent, marking the highest risk to poverty or social exclusion. At the opposite end of the spectrum was Norway with 13.0 per cent. Some 22.7 per cent of minors in the UK were at risk. 

The average risk across age groups in the EU was at 24.2 per cent with Cyprus just below that with 23.5 per cent. The UK was at 22.7 per cent, Iceland was at the bottom of the chart with 13.7 per cent, while Bulgaria’s population was well above the rest in term of the risks with 49.1 per cent. 

In general, children were at a greater risk than the rest of the population with risks climbing for children whose parents were considered to have a lower educational levels and dropping for parents who had completed university, Eurostat said.

Cyprus has been faring worse economically since 2011 and is now in negotiations for a bailout by its international lenders.

A pensioner rummages through a wheelie bin, unable to make ends meet

CENTRAL Bank Governor Panicos Demetriades is in London for contacts with people who could be interested in investing in Cyprus’ banking sector, the Cyprus News Agency said.

Citing reliable sources, CNA said that while in London Demetriades will have talks with potential investors willing to take a stake in Cypriot banks, which have suffered a heavy blow following the Greek sovereign debt write-down in October 2011.

Excluded from international markets, Cyprus requested financial assistance after its two largest banks sought state aid following massive write-downs of the Greek bond holdings estimated at €4.5 billion. 

Cypriot authorities and international lenders have agreed in principle on a Memorandum of Understanding containing the terms of the financial assistance programme estimated at €17.5 billion, which is equal to the country`s GDP.

In the context of the Cypriot application, the authorities commissioned a US investment consultancy firm to carry out a due diligence review of the Cypriot financial sector. 

PIMCO delivered its final report containing the capital needs on the basis of a baseline and an adverse scenario on February 2.

A reliable source has told CNA that the capital shortfall of the financial institutions which were included in the review reaches €5.98 billion in the baseline scenario, whereas the shortfall in the adverse scenario rises to €8.66 billion.

PRESIDENT Demetris Christofias yesterday spoke of an ‘orchestrated attack’ against the Presidential Palace after the 2011 Mari munitions blast, as he bid farewell to staff ahead of his departure.

Thanking the presidential guard, an emotional Christofias said they were the people tasked with protecting him and his family.

“They are the people who kept the Presidential Palace intact at the time of the great attack, the orchestrated attack, after the Mari accident,” he said. “I want to thank them wholeheartedly.”

The July 2011 blast killed 13 sailors and fire fighters and incapacitated the island’s biggest power station, causing rolling power cuts for around a month.

It sparked daily protests outside the presidential palace, with people demanding Christofias’ resignation.

The second protest, a couple of days after the incident, descended into chaos when a small group of people tried to storm the palace gates, throwing stones at police.

Police responded, firing tear gas at the crowds, which included families and children, causing intense scenes of anger and panic.

An independent inquiry into the blast found Christofias primarily responsible, together with the former ministers of defence and foreign affairs. 

The findings were not legally binding.

The July 11 blast at Evangelos Florakis naval base at Mari was the result of poorly stored deteriorating munitions held in 98 containers.

The containers had been kept exposed to the elements since their confiscation in 2009 from a ship sailing from Iran to Syria. 

Christofias thanked the palace staff for their hard work and his associates and close advisors.

Of his wife Elsi, the outgoing president said she was his heroine who helped people irrespective of their background.

“This is what Elisabeth did these five years; this is what she did when I served as House President,” Christofias said. “Needless to tell you I will love her until the end of my life.”

DISY responded to Christofias’ comments by saying the outgoing president should have apologised for Mari before he left office.

“The outgoing president owes his country the courage of an apology,” the party said. 

“But instead of an apology, Christofias paid tribute to those who "kept together the presidential (palace) at a time of a great attack, an orchestrated assault".

DISY said it was tragic that instead of viewing the demonstrations outside the palace as the spontaneous reaction of the victims' relatives and one of simple indignancy on the part of the people of Cyprus, Christofias had chosen to call the protests an “orchestrated attack” against the presidential palace.

Christofias after his address to palace staff yesterday

EVERY YEAR the government extends the deadline for the renewal of road tax which, in theory, should be done in January. Towards the end of January, it is announced that motorists would have until mid-February to pay their road tax and subsequently they are given a few more days after that. It is the lax way in which the law is enforced, with the government making special allowances to ‘help’ people.

It is not even as if the government has the authority to suspend the law for a month. What it can do and does is to instruct police not to book drivers who had failed to pay their road tax within the ‘extension’ period. But there appeared to have been a poor communication between the government and the police this year, after the police announced that they would not be booking people before the end of March 7.

Yesterday, minister of communications Efthymios Flourentzos told a morning radio show that no such extension had been given by his ministry and the last day for renewals was, as announced, February 25. He explained that he had told police to allow a couple of days to pass before issuing fines, because he did not want everyone rushing to renew their licences at the same time as this could crash the system. 

The deadline had not been extended, according to the minister, but enforcement of the law had been suspended – no fines - for another couple of days, in order to protect the system. He implied that the police had arbitrarily decided to be more lenient, by announcing they would start fining people after March 7. It is all a bit of a joke, but inevitable when the authorities start playing with the law and giving special dispensations to people. 

These may be difficult times, but paying road tax on time is a legal obligation of every car-owner and neither politicians nor the police have the authority to decide when the law would be enforced. The reason there was talk of another extension was the record number of car-owners who had not paid their road tax – there were still 180,000 cars that had not paid road tax, said Flourentzos, whereas in previous years the number was only 40,000. 

But if the ministry wants to help people it should introduce alternative payment terms, instead of suspending enforcement of the law. For instance it could allow people to pay their road tax on a quarterly basis or accept monthly payment by bank standing order. If this is feasible it would be much more helpful to people than the ludicrous practice of extending the period of non-enforcement of the law.