THE EUROZONE'S 17 finance ministers will meet in Brussels tomorrow after an EU leaders' summit to discuss Cyprus’ financial bailout, officials said yesterday, signalling growing momentum for a deal.
The meeting, which follows a mission by the troika of international lenders to Cyprus, raised expectations that the eurozone was close to sealing a package of aid that the island asked for last June.
"Friday 5pm (1600 GMT) extra Eurogroup on Cyprus," Dutch Finance Minister Jeroen Dijsselbloem, who chairs the meetings, said on his official Twitter feed.
"The expectation is that the Eurogroup will discuss the outlines of the aid programme," he said separately in a letter to the Dutch parliament.
The question of a bailout for Cyprus will also be discussed on the sidelines of this week's EU and eurozone summits although it is not officially on the agenda of either meeting, a German official said yesterday.
"Cyprus is not on the agenda, either of the European summit or the eurozone summit," the government official said, speaking on condition of anonymity.
"I don't think I'm telling any secrets.... that talks on Cyprus will take place on the sidelines," the official added, saying therefore no formal decision on any bailout would be taken by the heads of state and government.
The official said the German government would base its decision about a Cyprus bailout on the troika's evaluation and recommendation, which it hasn't received yet.
Crippled by its exposure to Greece, Cyprus needs funds from the eurozone to recapitalise its banks and to finance the government over the next three years.
Without help, it would slide into default, risking the eurozone's credibility and threatening progress made last year in convincing investors that the bloc will not be overwhelmed by its debt problems.
Initial estimates on the size of the bailout have been as much as the whole Cypriot economy produces in a year, some €17 billion, raising doubts whether the island would ever be able to pay back the money.
Officials told Reuters late on Tuesday that Cyprus may require a smaller bailout than that because it could raise money from a levy on deposits and other taxes.
Dijsselbloem told the Dutch parliament yesterday the bailout should be nearer to €10 billion. Reports put the bailout between €10 and €13 billion.
In his letter, Dijsselbloem said a programme for Cyprus must lead to a sustainable public debt level, allow it to repay its loans and revive the economy.
"The programme's size has to be limited," he said.
The troika - the European Commission, the European Central Bank and the International Monetary Fund - have told eurozone finance ministers enough progress had been made in Nicosia to hold the Eurogroup meeting, officials said.
The lenders are also discussing the possibility of Cyprus raising its corporate tax rate by 2.5 percentage points to 12.5 per cent. The lenders would also like to see Cyprus introduce a financial transaction tax, something the country opposes.
Eurozone officials have said they expected a decision on a bailout to be taken before the end of March. One of the most divisive issues is whether to force losses on depositors in Cypriot banks as part of a rescue package, known as a "bail-in".
German officials, backed by the Netherlands and Finland, have pushed for depositors in Cypriot banks, many of whom are Russian and British business people, to help pay for the rescue.
Berlin alleged that Cyprus has become a conduit for money-laundering. Russian individuals and companies have a high level of deposits in the banking sector.
Cyprus said any bail-in will spark the rapid withdrawal of funds from the island and undermine its entire banking system, making the economic situation even worse.
Eurozone leaders are not expected to give guidance at the summit today on whether or not depositors should be targeted, according to one senior eurozone source.
The European Commission, Spain and Italy are against a bail-in, while the European Central Bank has not taken a position, although it is wary of the risks, officials told Reuters.
ECB President Mario Draghi warned not to underestimate Cyprus' importance at his last news conference last week.
"Cyprus is a small economy, but the systemic risk may not be small," he said.
IMF Managing Director Christine Lagarde is not expected at tomorrow’s Eurogroup, prompting some EU officials to suggest the Washington-based lender may not co-finance the rescue package and will only give expertise. The IMF declined to comment.
One solution could be for Moscow to contribute to the bailout if it received the same credit status as eurozone lenders, meaning it gets repaid as a priority.
Officials have also said Russian investors are interested in buying a majority stake in Cyprus Popular Bank and increasing their holdings in Bank of Cyprus - the two biggest banks on the island.
President Nicos Anastasiades is to travel to Russia to meet President Vladimir Putin in the coming weeks to discuss possible Russian help, officials said.
“We need patience and you will see that hard work brings good results,” Anastasiades said yesterday.
His visit to Moscow will be preceded by that of Finance Minister Michalis Sarris on Monday for talks with his Russian counterpart.
The talks will focus on the ways Russia could contribute to the bailout.
Cyprus has asked Russia to extend repayment of a €2.5 billion loan for five years to 2021 and cut the 4.5 per cent interest rate.

Dutch Finance Minister Jeroen Dijsselbloem

A GROUP of non-institutional bondholders held a protest outside the finance ministry yesterday claiming that the current association of bank bondholders does not fully express their position.

The group stated that today’s possible bailout agreement at the Eurogroup would put an end to any hope of renegotiating the terms of their bonds, making hundreds of investors lose their money.

Spokesman for the non-institutional bondholders, Fotos Fotiades, said that banks had  conned people out of their money in the biggest fraud committed in Cyprus.

“There are people who are in a tragic situation; there are people who have been paralysed in accidents who put their money in these bonds and don’t have any food to eat,” he said. “I believe it is a first degree financial crime and those responsible should have taken responsibility for their actions in order to solve this problem,” he added.

Ahead of the Eurogroup meeting today, the non-institutional bondholders felt that the situation was very urgent and for that reason, they created a group so that the whole case can move swiftly forward, according to Fotiades.

“We asked the finance ministry to find out whether the amount of money needed to compensate our group was included in the new bailout deal agreement but we don’t know if it has been included so or not,” he added.

Bondholders from all of the districts met at the ministry yesterday, with the permanent secretary, and with technocrats who dealt with the troika.

“If we assume that they tell us that the amount to compensate us has been put in the agreement then we will say thank you very much but if they tell us it hasn’t then we will proceed in taking stronger measures,” Fotiades said.

Asked why the non-institutional bondholders have broken off and formed their own group, Fotiades said that the association of bondholders has a relatively soft stance.

ENVIRONMENTALISTS yesterday said marine life could have been harmed after a tanker supplying fuel oil to a terminal in the occupied village of Gastria in the Karpas peninsula, spilled at least one tonne of petroleum in the area on Wednesday evening but only reported it yesterday. 

Gastria, known as Kalecik in the north, lies north of Bogazi on Famagusta bay, a busy area with two existing fuel terminals and plans for a third. Environmentalists and locals are already vocal against building an oil terminal with storage capacity of one million cubic metres, further north near the village of Eptakomi, known in the north as Yedikonuk. 

Green Action Group’s Dogan Sahir yesterday said that the oil spill in Gastria validated their opposition. The Green Party did the same, marking their disagreement to the Eptakomi terminal plans “which will increase the dangers of repeating such accidents since supplying fuel to the area will be much more common place.

Turkish Cypriot daily Havadis said the accident in Gastria was the result of negligence, but quoted authorities as saying the spillage was not big enough to cause any real damage to the environment. But Sahir told the Cyprus Mail that with oil spills spreading fast over kilometres, any damage to marine life was already done.

 Part of the concern is the need to use solvents to deal with the spill despite their effect to wildlife – including migratory birds now in the area, Sahir said. But the oil company tried to deal with the problem overnight on Wednesday but only alerted the authorities the following day, he said. “Cases like that should be handled immediately, otherwise there is no chance to solve (the problem),” Sahir said. “(Now), there is no chance to fix things,” he said. 

Another expert said that the technicians and experts on the scene reported that the situation was under control with barriers in place to control spread, and oil absorbent material being used in addition to the solvents.

“The big issue is actually that the area has a number of eastern Mediterranean countries bordering its seas, dumping waste, ships carrying petroleum, a lot of marine traffic and rubbish ending up the shores,” the biologist and marine expert said on condition of anonymity. “In general there are many oil spills that are not being reported,” the expert said but also added that people should pick their battles.

“As I understand it this is a minor problem but when you blame people for even the minor things then when something big happens and there is a real issue they will just claim that you shout every time.”

THE lack of proper protection for some environmentally sensitive areas results in people taking advantage by using wetlands on the island for various water sport activities, conservationists said yesterday.

Greens MP Giorgos Perdikis has called on the government to invest in protecting and safeguarding Cyprus’ nature reserves. This comes after Larnaca Municipality received a number of complaints from residents near the Salt Lake that people were kitesurfing on the wetlands site.

“Plans are in place to solve the problem with the creation of an Environmental Information Centre next to the Salt Lake,” environmental officer at Larnaca municipality, Costas Kokkinos said. 

“The plans have been approved, and everything is in place. Unfortunately due to the crisis we had our funding delayed but we are hopeful that construction will begin in 2014,” he said. Kokkinos said that park rangers would be put in place to ensure that people did not use the salt lakes for recreational purposes but would also be present to inform the public about the importance of the area. 

“Larnaca municipality, the game fund, the forestry department and the police have all contributed in patrolling the area but it’s not enough as most government officials only work till 3pm and the police tend to be busy with other matters,” he added. Kokkinos believes there are not enough sign posts or warnings around the wetlands to warn people not to enter, a matter he plans on bringing up with newly-appointed  Environment Commissioner, Ioanna Panayiotou.

Nicosia Kitesurfing Club released a statement yesterday, discouraging its members from using the salt lakes to practice their sport.

“Because Larnaca Salt Lake as well as other salt lakes and inland lakes in Cyprus are afforded protected status as environmental areas of significant importance due to their

biodiversity, we encourage our friends and members to refrain from practicing kitesurfing in these areas,” the statement said. 

“Our activities are harmful to the wildlife in the salt lakes and in addition, in the case of Larnaca Salt Lake, kite flying in areas adjacent to Larnaca airport creates significant risks to the safety of aircraft which take off and land from the nearby runway,” the statement added.

The club asked its members to inform, educate and encourage others to refrain from abusing the wetlands across the island.

The announcement from the club was welcomed yesterday by BirdLife Cyprus as they believe such activities are simply not in keeping with the protected status of the Larnaca Salt Lake and pose a serious disturbance risk to many of the bird species. The area is a designated Natura 2000 site, which is an ecological network of protected areas in the territory of the European Union. 

“Larnaca Salt Lake is among the top two most important wetland sites on the island and Spyro's pool, where the kitesurfing took place, is a key nesting site for many species,” BirdLife campaign manager, Martin Hellicar said. “What is really frustrating is that there is no effective mechanism in place to ensure such activities are prevented; no sign-posting, no clear response system when such activities are detected. And this holds for most of our Natura 2000 sites across the island,” he added. “We need to move from protection on paper to protection in practice as disturbance poses a serious threat to wildlife, one that is often underestimated,” Hellicar concluded.

Larnaca Salt Lake was designated a Natura 2000 site for birds in 2005, as a site of importance for more than a dozen species, including flamingos, cranes, stilts and other waders. It also regularly holds congregations of thousands of water-birds, especially in winter and spring.

Kitesurfers on Larnaca Salt Lake. Wetlands are for birds, say greens, not for water sports enthusiasts

THE CHURCH will soon be transferring tracts of land to the state, bringing to a close a deal struck some 40 years ago.

The announcement was made yesterday following a meeting between Archbishop Chrysostomos and Interior Minister Socrates Hasikos.

A 1971 agreement between Archbishop Makarios – who was president at the time – and the government gave the state around 15,000 donums (1 donum is around 1,337 square metres) of land in return for the state paying part of rural priests’ wages.

Despite that deal, the land registry department did not give its consent to register this land to the state because it is “the legacy of the Greek Cypriot Orthodox community and should not be managed as state land.”

Around 70 per cent of the land in question is now in the Turkish-occupied areas, and the income from the remaining land is negligible compared to what the state pays.

A third of the land in the government-controlled areas is barren and unsuitable for agricultural purposes. 

Since 1993, the land has been rented out to private citizens by the land registry department through tenders.

But the income received by the state compared to the subsidy paid to priests was negligible, according to the auditor-general.

Between 1983 and 2004, the state paid around €54.5 million in priests’ wages and received only some €536,000 from rent.

As the cost spiraled, in 1992 the cabinet approved disengaging the subsidy from the entry-level teachers’ wage since that was upgraded.

The land had technically always belonged to the state, however up until now no title deeds had been issued on it, Archbishop Chrysostomos told newsmen.

No transfer fees would be paid in the transfer, he added.

“We shall simply go there [to the land registry department] to sign the documents certifying that the title deeds are to be issued to the state, nothing more.”

Responding to questions, Chrysostomos said the latest evaluation of the land in question put its value at some €80 million.

“This is about one-quarter of the entire [Church] property…the majority of the land is unfortunately in the occupied territories, including coastal real estate with huge value,” the Church leader said.

For his part, Hasikos said the deal meant the land could now be counted as state assets, and it was up to the government how to make use of it.

The Church of Cyprus is the biggest landowner and has interests in various enterprises like hotels, beer, wine and water factories.

Interior Minister Socrates Hasikos (left) with Archbishop Chrysostomos yesterday

THERE has been reaction in the co-operative movement over a decision for widespread mergers as part of the island’s bailout deal, it emerged yesterday.

International lenders and Cypriot authorities agreed last November that co-operatives must shrink in number – from 96 to 35 – mainly through mergers.

According to the chairman of the co-operative federation, there has been some reaction inside the movement over the prospect. But Andreas Mouskallis did not appear concerned.

“I think they will agree when the reasoning is explained,” he told state radio. “We are ready to present a merger plan at this moment.”

As part of November’s agreement, supervision of co-operative banks would be shifted to the central co-operative bank from the trade and industry ministry.

The Central Bank of Cyprus will also have a role in the supervision.

Mouskallis said people should show self-restraint and put selfishness aside.

“We should all realise that our country is under siege because of our mistakes, but also because of the troika and our friends the Europeans,” the former AKEL MP said.

Mouskallis said the co-operative movement must be stronger in the coming years to help people going through austerity.

He said delays have been observed in the repayment of loans “but we will be on the side of the people and support them under any circumstances.”

It did appear however that the movement was benefitting from the problems faced by commercial banks and the flurry of negative reports in the past year.

“People have embraced the co-operative movement and raised its deposits by €861 million (in 2012),” Mouskallis said.

FAILURE to secure funding for Cyprus would present "a systemic risk" for the whole eurozone, Central Bank Governor Panicos Demetriades said yesterday.

In an interview with Reuters, although he would not be drawn on details as negotiations were at a delicate stage, Demetriades said that reigniting of debt crisis turbulence was the biggest risk to the eurozone economy.

"The periphery is the biggest risk (to recovery), and at the minute it is Cyprus," the governor said, urging its European partners to conclude a bailout this month. 

Demetriades said the currency bloc's debt-ridden countries had done well in their quest toward balanced budgets, saying they were approaching the end of that road and should now concentrate on structural economic reforms. 

"We have not gone through all the fiscal adjustment, although we are toward the end," he said. "It is essential for governments to continue implementing structural reforms, to build further on the progress made in fiscal consolidation."

UNDER threat of litigation, the Bank of Cyprus (BoC) has awarded former CEO Andreas Eliades compensation to the tune of some €2 million.

The move comes after a majority decision of the bank board last Friday. No money has been disbursed yet; given that the bank has requested state assistance, the final say rests with regulatory authority, the Central Bank.

On resigning his post in July last year, Eliades demanded €3.5m in total. The €2m figure awarded last week is seen as a compromise.

It’s understood that Eliades had taken out a €1.9m loan from the bank; so his compensation covers the amount he owed plus a little extra.

Sources said the bank’s leadership were in two minds, but buckled under pressure from the provident fund committee, which in turn had been threatened with lawsuits by Eliades.

Some in the bank thought Eliades’ demands from the provident fund to be inflated.

Provident fund payouts are based on the salary.  In the past, Eliades had received a bonus – linked to bank profits – that far exceeded the limit set out in his contract. To overcome this restriction in the contract, a formula was devised so that part of the sum would be logged as salary and the rest as a bonus.

But the one-off arrangement had the side-effect of raising Eliades’ salary on paper, and thus also increasing his retirement benefits.

On leaving, Eliades asked for the full provident fund he felt he was entitled to, as per the previous arrangement. Initially the bank was averse, and at that point Eliades sued each member of the provident fund committee individually.

Legal precedent in Cyprus has established that provident benefits must be paid irrespective of any other financial dispute between an employer and an employee.

Apparently faced with the prospect of being dragged to court, the bank’s provident fund committee urged the board not to contest Eliades on this point.

In Eliades’ case, his bonuses have had an impact on the compensation figure, even if in a roundabout way. But some in the bank dispute the very bonuses paid out over the years  to the former strongman.

It’s understood that during his stint as CEO, Eliades received around €1.8m in bonuses.

Sources close to the BoC said at least some of these bonuses were linked to posted bank profits which, in hindsight, were “artificial given what we now know about the last couple of years.”

It would be best for the BoC to have withheld compensation until ongoing probes into possible bank malpractice are completed, the sources said.

They were referring, among others, to an independent investigation conducted by Alvarez & Marsal, a US-based firm hired last August to identify how the island’s largest banks ended up needing billions of euros in bailout money.

The sources even suggested that, should these investigations find that certain people were responsible - through actions or omissions – for the state of BoC today, the bank could ask these people to return their bonuses.

PRESIDENT Nicos Anastasiades said yesterday he was committed to implementing a bailout deal “up to the last iota”, as negotiations appeared to enter the final stretch.

Anastasiades, in Brussels to attend the EU and eurozone summits, reiterated that Cyprus was not asking for preferential treatment.

“I have assumed the post of president 15 days ago and I immediately started negotiations with the troika representatives,” Anastasiades told reporters. “We look forward to finding the best and fairest agreement.”

The Cypriot president said he was committed to implementing a bailout agreement "up to the very last iota," adding that “what we look forward to is not preferential but fair treatment.”

Cyprus’ case was not going to be discussed during the summit although some talks were expected on the sidelines.

An extraordinary Eurogroup meeting will discuss the island’s bailout today.

"No, we will not speak about Cyprus because the troika has not yet finished its work,” German Chancellor Angela Merkel said. “That's why it is important that apart from the growth questions we look towards the finance ministers who will speak about Cyprus, we will not do that here. It's completely impossible without a troika report."

Cyprus needs funds from the eurozone to recapitalise its banks and to finance the government over the next three years. 

Without help, it would slide into default, risking the eurozone's credibility and threatening progress made last year in convincing investors that the bloc will not be overwhelmed by its debt problems.

Initial estimates on the size of the bailout have been some €17 billion, raising doubts whether the island would ever be able to pay back the money.

However, it has emerged that European officials were pushing for a lower bailout – closer to €10 billion

Officials told Reuters late on Tuesday that Cyprus may be able to raise money from a levy on deposits and other taxes.

"We have a known problem in Cyprus - we have a financial sector which is relatively large in comparison with the Cypriot economy," he said. "Any aid we give must be aid towards self-reliance, we must address the causes," German Finance Minister Wolfgang  Schaeuble was quoted as saying by the Wall Street Journal.

Once the causes of the country's problems are addressed, compromise on the manner, speed and time frame of aid will be easier, he said. 

Finnish Prime Minister Jyrki Katainen emphasised the need for Cyprus’ debt to be sustainable.

"We have to find a solution which makes it very clear that Cyprus will end up with debt sustainability and that we need the IMF there also,” he said yesterday. “The main issue is that the solution must be a kind which makes it very clear that Cyprus will end up with a debt-sustainable situation."

One way of reducing the island’s bailout and the size of the banking sector, was getting rid of the Cypriot banks’ Greek operations.

Officials were yesterday negotiating with Greek authorities on how this could be achieved.

Christophoros Pissarides, chairman of the island’s national economic policy council appeared optimistic that a deal would be struck soon.

“The prospects are good,” he said.

The basic idea was to turn the operations over to Greece, which would recapitalise them through its own bailout.

Pissarides suggested that this would shave off some €2.0 billion from Cyprus’ assistance.

Anastasiades in Brussels ahead of a Eurogroup meeting today

FOR YEARS now we have been hearing about the need for politicians to publish capital statements as part of the process to introduce transparency to public life. Draft legislation has been prepared and been found wanting during discussions, with deputies always picking holes in it without ever coming up with alternative proposals. It is the same, negative approach used for proposals relating to the Cyprus problem, by which politicians cite all the reasons why they would fail.

One of the most often used arguments against the publication of a deputy’s capital statement was that it would constitute a violation of the right to privacy. It is a disingenuous argument, considering that the information would not be made public, even though it should be. In fact, releasing, personal assets and earnings should be a legal obligation of everyone who hold public office, be they permanent secretaries, ministers, commissioners or deputies. As these people enjoy a host of privileges because of their positions they should also have special obligations that do not apply to ordinary citizens.

The privacy argument was debunked by the Commissioner for the Protection of Personal Data Yiannos Danielides, on Wednesday, when he accused deputies of hypocrisy. In a written statement he said that the position of several deputies, that they “would publish their capital statement on the condition that others do so” was “a classic example of hypocritical populism.” Danielides concluded that “in reality they do not want to publish their capital statement,” and it is impossible to disagree with him.

Deputies, although they pay lip service to transparency and are supposedly opposed to corruption have always refused to set a good example. And we are not only talking about the submission of capital statements. They do not even declare an interest when a House committee discusses issues in which they may have a direct interest – many deputies are lawyers representing individuals, companies, unions or associations that would be affected by legislation being discussed. 

But it would appear that deputies have a lot to hide. There is no other explanation for their refusal to publish a capital statement or to divulge their professional interests. As regards the latter, the voters have the right to be informed. But if we seriously expect deputies to voluntarily introduce laws that would restrict their activities and make them more accountable to the public we are deluding ourselves. This will never happen. They will pay lip service to the need for transparency, rail against corruption but never pass the necessary legislation. 

Only through public pressure could they eventually be forced to pass legislation, but we are not very hopeful.

CYPRUS, urgently needing revenues from its newly found natural gas reserves, hopes to begin exports by 2018 and will target sales at fellow European Union members, its energy minister said.

George Lakkotrypis also said gas could be sold in advance or used to help the government, which is now negotiating a multibillion-dollar bailout, to issue new debt on international markets in future.

US company Noble Energy and the Cypriot government announced in 2011 that they had discovered gas deposits of around 7-8 trillion cubic feet (200 billion cubic metres), 40 per cent of the EU's annual demand.

Aphrodite, as the gas field is known, has more gas than Cyprus could use in over a century, so the government hopes to boost its revenues through exports to the European Union.

"It is important to us not just economically but also geostrategically," Lakkotrypis told Reuters in an interview, referring to potential exploration partners. "So EU member countries are obviously appealing."

Experts believe Cyprus, an energy sector novice, could be sitting on hydrocarbons worth up to $400 billion. Such revenues would be welcome to a government that is now negotiating a bailout from the European Union, International Monetary Fund and the European Central Bank so it can recapitalise its banks, service debt and support government spending.

But as the gas reserves are still unproven pending an appraisal drilling this year, they have barely been taken into account by lenders discussing aid to the island.

A draft bailout deal calls for the establishment of a resource fund to manage revenue and place debt on a downward course, though the creation of such a fund could be years away.

Lakkotrypis, barely in office two weeks following last month's election, said the financial crisis had made development of the gas fields for exports much more urgent. The new government wished survey work had progressed faster to give Cyprus a stronger economic position and less need for a bailout.

"If it had been a year ahead, it would have made a real difference," he said.

To monetise its deposits as fast as possible, the government was pushing Noble Energy to bring forward appraisal drilling to confirm its gas findings, Lakkotrypis said.

"It's a pity we are under so much pressure. Every week counts," he said.

Lakkotrypis said Cyprus was in the final months of deliberation over deals to run an onshore liquefied natural gas (LNG) plant to process the gas for export by ship.

Lakkotrypis said the government hoped production could begin as soon as 2018. Once an appraisal confirms initial findings there was a range of options on how to use the reserves to raise cash, including advance sales, he said.

Cyprus is not the only country in the region that is hoping to benefit from a gas bonanza.

Geologists believe the eastern Mediterranean could contain up to 122 trillion cubic feet (3.45 trillion cubic metres) of recoverable reserves, enough to cover EU gas demand for around seven years.

The biggest finds have so far been made in Israeli waters, where the Tamar and Leviathan gas fields will cover Israel's gas demand for decades while generating huge export potential.

Because the Leviathan and Aphrodite gas fields lie in close proximity, the governments of Israel and Cyprus agreed on joint exploration of some of the gas, making development more attractive for potential investors.

Earlier this year, Cyprus announced the results of some of the second round of bidding for offshore exploration blocks, bringing France's Total, Italy's Eni and South Korea's KoGas into Cypriot energy exploration.

Cyprus's second licensing round, in which it received 15 expressions of interest by 29 companies either on their own or in consortia for 9 offshore blocks, will be wrapped up by the end of May.

So far five blocks have been awarded in the second round.

Commerce Minister Giorgos Lakkotrypis (left) with Noble Energy's John Tomich on Tuesday

ALTHOUGH consumer rights in Cyprus are not fully protected in practice, some people are learning from the ongoing economic crisis and becoming more savvy.

On World Consumer Rights Day yesterday, George Varnavas, a member of EDEK, asked the new government to support the proposal for a commissioner for consumers to be appointed. During a press conference Varnavas said: “This year’s World Consumer Day is marked by the fact that the Cypriot consumer is currently living in very hard times. Unemployment and rises in petrol prices, leading to an increase in the prices of other essential products, and the reduction of purchasing power due to decreases in income, places the Cypriot consumer in a very harsh position.”

Varnava said that for the first time since 1974, Cypriot consumers were unable to meet their basic financial obligations such as, paying their electricity and water bills.

The theme for the World Consumer Rights Day 2013 is ‘Consumer Justice Now!’ In Europe the theme was ‘Know Your Rights Now!’ 

But Loucas Aristodemou, Chairman of the Cyprus Consumers Union and Quality of Life association said it was time to look at more active measures rather than just the offering of information to consumers. 

“Many people call every day and are afraid to put their complaints down in writing because this may go to court and cause economic and emotional discomfort. This is due to the society around us and our culture. In the end they receive no justice,” he said. 

He also said the crisis had made consumers more aware of how they spend their money.  “Many consumers have come to realise their rights and act differently,” he said citing as an example shopping wisely or taking the bus instead of paying for overpriced petrol.

“Shops are closing down, the market is at a stand-still, consumers need to be respected now more than ever because they are the ones who spend the money,” he said.

He cited a recent complaint where a woman bought a mobile phone and took it back to the shop the next day because it was not working.  “The staff member said that because she got make-up on it, it broke,” Aristodemou said.

Phryne Michael, head of the Cyprus Consumers Association said consumers must continue to insist on their rights. 

“They should not buy products from supermarkets, for example, that are overpriced. Only in this way will they (businesses) understand that they are losing customers and money. Consumers should stand up for their rights by taking faulty products back,” Michael said.

She said the powers that be needed to try harder to make consumers feel more secure in claiming their rights.

Her association runs training seminars every week in all cities, for those interested in knowing their consumer rights, she said.

“Consumers can also become a member of the association and receive newsletters by email. They can ask for advice by ringing us up or contacting us through our website - however the consumer feels comfortable,” Michael added. “Consumer rights need to be protected, especially in this time of economic crisis.”

The UN General Assembly put down eight core consumer rights in 1985. These rights are right to safety, right to information, right to choice, right to representation, right to redress, right to education, right to basic needs, and rights to a clean environment.

THE ECONOMIST will be holding a conference next Friday examining the ongoing battle to save the eurozone, inviting President Nicos Anastasiades as its keynote speaker. 

For the fifth consecutive year, Europe is preoccupied with weak public finances, anemic growth and high unemployment rates.   

The Cypriot economy is also in the midst of the economic crisis. The new government is negotiating with the European Commission, the European Central Bank and the IMF the terms of a “package” bailout, raising questions as to whether Cyprus will succeed, or for that matter the eurozone?

Anastasiades will address the conference on the priorities and challenges of the new government. The event will be held in Nicosia and is being organised in association with the University of Nicosia and the European Parliament Office in Cyprus, with the support of the Cyprus Chamber of Commerce and Industry.

The conference will also host top-flight speakers from Cyprus, Greece, USA, UK, Germany and Switzerland, including Europe Editor of The Economist John Peet, vice-president of the European Parliament Anni Podimata, Cypriot Finance Minister Michalis Sarris, Nobel Laureate economist Christopher Pissarides, Rector and Jean Monnet Chair Holder Michalis Attalides and Head of European G10 Foreign Exchange Strategy of Bank of America Merrill Lynch and Fmr Deputy Division Chief of the IMF Athanasios Vamvakidis.

Key analysts from the American Enterprise Institute, the Transport Infrastructure Commission of the German State of Hessen and the Hellenic Financial Stability Fund will give their views on important aspects of the Cypriot and European economy.   

Other issues on the agenda include a European Banking Union, restoration of stability and competitiveness, developments on the bailout, Cypriot deposits, privatisations, credit risk management for banking and business, and liquidity issues.

For more information on the full agenda, go to www.hazliseconomist.com. 

SEMI-STATE unions said yesterday they were not going to accept privatisations without a fight, announcing a series of meetings to decide future steps as a whole. 

PEO’s Antonis Neophytou said that they would not allow the “selling out” of semi-governmental organisations. “All Cypriots will react and so workers are ready and have decided to respond but unions will have to coordinate and (do so) in collaboration with all unions,” Neophytou said. 

He said that despite the government’s claim to the contrary, no one could be sure that jobs were safe and with “unions not given a chance to discuss this issue” they had a responsibility to put the pressure on to prevent privatisations. 

Starting next week, PEO will have a series of meetings to chart out future actions and “salvage what has been built on over decades in Cyprus”. 

SEK’s Andreas Elia made similar statements but fell short of calling an all-out protest or work stoppages, saying those would be “extreme” measures that unions did not take lightly. 

Elia said that “workers (were) definitely worried” with talks of privatisation “justifiably creating insecurity”.

The Electricity Authority (EAC) said yesterday that the consumer benefited from their status as a semi-governmental organisation, with the EAC board unanimously agreeing this week they should continue being a public benefit body. The board said it would take all necessary action to prevent the EAC’s privatisation.

The draft memorandum of understanding struck between the previous government and the troika said that if “necessary to restore debt sustainability, the Cyprus authorities will consider a privatisation programme for state-owned and semi-public companies”. 

Labour minister Harris Georgiades yesterday said that as far as the draft memorandum agreement went, their hands were tied given the memorandum agreement by the previous government. But he said that President Nicos Anastasiades was trying to see how to handle “this very difficult issue”.

AKEL chief Andros Kyprianou, whose party is now in opposition after five years of government, yesterday repeated accusations that the government did a U-turn and had by now “clearly accepted privatisations” trying to appease workers and the public with “shaky arguments”. 

Ruling party DISY’s Lefteris Christoforou said that Kyprianou was insulting people since “it was they who handed over” a bankrupt economy and an unsigned bailout memorandum. 

“Nicos Anastasiades ‘government has been trying to salvage in 14 days what can be saved from the wreck left behind by AKEL’s populism and five years of (Demetris) Christofias’ bankrupt government,” Christoforou said.  

FINANCE Minister Michalis Sarris is expected to discuss two issues with his Russian counterpart in Moscow on Wednesday; that of Russia pushing back repayment of a €2.5 billion loan, and how Russia can contribute to a Cyprus bailout, analysts yesterday said.

“What is certain is that it is completely necessary to push back payment of the Russian loan and perhaps lower the interest rate,” said economist Sofronis  Clerides. 

Cyprus secured the €2.5 billion loan at a 4.5 per cent interest rate in 2011 to plug its finances after becoming shut out of international markets. The loan matures in 2016, but Cyprus hopes to get it extend the deadline to 2020. 

Delaying repayment would alleviate concern over Cyprus’ debt sustainability, Clerides said. 

President Nicos Anastasiades is also due to visit Russia to meet with his counterpart in the coming weeks and while economists said yesterday it was still too soon to speculate on the upshot, they agreed that the aim was to see how Russia might participate in a bailout. 

One way is to secure a Russian contribution, and another solution mentioned by officials is the possibility of Russia buying a majority stake in Popular Bank, which along with the Bank of Cyprus needs to be bailed out.

Russia also has a motive to protect its depositors who hold an estimated €25 billion in Cyprus’ banks, a third of the deposits in their entirety, Clerides said. 

He added that when Iceland refused to bail out British depositors when its banks collapsed 2008, the UK was forced to bail out its depositors. “Just as Cyprus has an obligation towards its public, so does Russia towards its citizens,” Clerides said. 

But he added that the Russian aspect was only one aspect of a larger jigsaw puzzle that also included what is going on in Cyprus on a domestic level with possible privatisations for example, and what is going on with the Cypriot banks’ Greek operations. 

Conversations on Cyprus’ financial bailout have tended to come in tow with often knee-jerk assumptions that the sizeable Russian deposits in the country are dirty, sheltered by lax financial regulation. 

Claims or data showing that Cyprus complies with international regulations have been quickly brushed aside. A case in point was a recent article in the Financial Times (FT) in which German Finance Minister Wolfgang Schaeuble said: “We need to find out if the regulations just exist on paper, or are really being implemented”. 

Cue a statement about Russian “investment” as the FT put it, and of “round-tripping” dodgy funds, and it is clear that Cyprus needs to do more work to convince it is not a money-laundering haven for scoundrels.

With paymaster Germany having elections later this year and German Chancellor Angela Merkel’s government under fire to show it protects taxpayers, getting Russia to contribute to a bailout would be politically expedient, economist Fiona Mullen said. 

“It will allow Germany to say, ‘we also got the Russians to pay some of the (money)’, so it’s politically important. So the burden is not (only) on EU taxpayers but also on Russia,” she said. 

Mullen said that Russia’s help was important because it could help with debt sustainability and “hopefully satisfy European taxpayers that they are not the only ones paying for a bailout”. 

But in terms of what Russia’s role will be in Cyprus’ bailout, the jigsaw puzzle pieces have not yet fallen into place. 

REPORTS that shipping agents have offered to take over the operation of the Limassol port from the Licensed Porters Association would be a positive development, if they did not have to pay such an extortionate price. The agents have apparently offered the Association €32 million for the monopoly it has enjoyed for years, with the state’s complicity and at the expense of the economy.

But anything would be an improvement on the current regime which has been abusing its monopolistic power for decades, imposing absurdly high charges for the services it was providing – unloading cargo from ships, transporting it to warehouses and delivering it to consignees – and driving away business. As regards imports, the charges were passed on to Cyprus’ consumers in the form of higher prices.

The licensed porters enjoyed a closed shop which they exploited to the full for their gain and at the expense of the economy, but nobody dared take them on. Their charges and restrictive practices were the main reason Larnaca port was closed down, the shipping companies that were using it as a transit cargo centre moving all their business to a much more competitively priced port with more flexible working hours, in Egypt, in the early nineties.

But instead of seeing this as a warning and dismantling the closed shop, the authorities allowed it to carry on operating at Limassol port as a business entity. It was a monopoly that imposed high prices and its only concern was that port workers enjoyed maximum pay for minimum effort. As industry sources told this paper, the port workers had no interest in increasing volume of traffic, because if it dropped they simply increased loading/unloading fees in order to maintain revenue.

This is exactly what the Licensed Porters Association did in the last few years as Limassol port cargo traffic dropped because of the global crisis. It upped loading/unloading fees, a move that maintained revenue but drove away a number of shipping lines and increased prices of imported goods. This scandalous practice combined with porters refusal to work extended shifts was never questioned by the Ports Authority, another so-called profitable semi-governmental monopoly.

But the biggest scandal of all will be that the Porters Association will receive a pay-off of €32 million to give up its monopoly, a fantastic reward for an association that caused only harm to the economy, driving away businesses and contributing to price inflation. It has been said that the shipping agents would make a better job of running Limassol port as they have a direct interest in increasing traffic volume, the implication being they would charge lower fees in order to attract new business. 

But it is unlikely they would be able to lower fees enough to make Limassol port competitive again, given that they would start their operation €32 million in the red.    

THE EUROZONE struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risks of a wider run on savings.

The eastern Mediterranean island becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to the euro zone for financial help during the region's debt crisis.

In a radical departure from previous aid packages - and one that gave rise to incredulity and anger across the country - euro zone finance ministers forced Cyprus' savers to pay up to 10 per cent of their deposits to raise almost 6 billion euros.

Almost half of its depositors are believed to be non-resident Russians, but most of those queuing on Saturday at automatic teller machines to pull out cash appeared to be Cypriots.

"I wish I was not the minister to do this," Cypriot Finance Minister Michael Sarris said after 10 hours of late-night talks in Brussels where the package was hammered out.

"Much more money could have been lost in a bankruptcy of the banking system or indeed of the country," he said, adding that he hoped a levy and bailout would mark a new start for Cyprus.

Without a rescue, Cyprus would default and threaten to unravel investor confidence in the euro zone that has been fostered by the European Central Bank's promise last year to do whatever it takes to shore up the currency bloc.

The bailout was smaller than initially expected and is mainly needed to recapitalise Cypriot banks that were hit by a sovereign debt restructuring in Greece.

The deposit levy - set at 9.9 per cent on bank deposits exceeding 100,000 euros and at 6.7 per cent on anything below that - will take force on Tuesday after a bank holiday on Monday.

To guard against capital flight, Cyprus will take immediate steps to prevent electronic money transfers over the weekend.

In the coastal town of Larnaca, where irate depositors queued early to withdraw money from cash machines, co-op credit societies that are normally open on Saturdays stayed closed.

"I'm extremely angry. I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans," said British-Cypriot Andy Georgiou, 54, who returned to Cyprus in mid-2012 with his savings.

"They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple," said a pensioner.

The levy breaks the taboo of hitting bank depositors with losses. But Dutch Finance Minister Jeroen Dijsselbloem said it would otherwise have been impossible to save Cyprus' financial sector which, compared with national economic output, is more than twice as big as the EU average.

"As it is a contribution to the financial stability of Cyprus, it seems just to ask for a contribution of all deposit holders," Dijsselbloem, who chaired the meeting in Brussels, told reporters. "We are not penalising Cyprus..., we are dealing with the problems in Cyprus."

The island's bailout had repeatedly been delayed amid concerns from other EU states that its close business relations with Russia, and a banking system flush with Russian cash, made it a conduit for money-laundering.

Dijsselbloem said that under the rescue, the island's debt would fall to 100 per cent of economic output by 2020.

In return for emergency loans, Cyprus agreed to increase its corporate tax rate by 2.5 per centage points to 12.5 per cent. This should boost revenues, limiting the size of the loan needed from the euro zone and keep down public debt.

Cypriot President Nicos Anastasiades called a meeting of party leaders for Saturday night to brief them on the bailout.

International Monetary Fund Managing Director Christine Lagarde, who attended the Brussels meeting, said she backed the deal and would ask the IMF board in Washington to contribute.

"We believe the proposal is sustainable for the Cyprus economy," she said. "The IMF is considering proposing a contribution to the financing of the package ... The exact amount is not yet specified."

Cyprus, with a gross domestic product of barely 0.2 per cent of the bloc's overall output, applied for financial aid last June. But negotiations bogged down in the complexity of the deal and reluctance of the island's previous president to sign.

Moscow, which has close relations with Nicosia, is also likely to help by extending a 2.5 billion euro loan by five years to 2021 and reducing the interest rate.

"My understanding is that the Russian government is ready to make a contribution with an extension of the loan and a reduction of the interest rate," said the EU's top economic official, Olli Rehn.

Cypriot finance minister Sarris will travel to Moscow for meetings on Monday to try to pin down the new loan terms.

Cyprus originally estimated that it needed about 17 billion euros - almost the size of its entire annual output - to restore its economy to health.

But because a loan of that magnitude would increase its debt to unsustainably high levels and call into question its ability ever to pay it back, policymakers sought to reduce it by finding more revenue sources in Cyprus itself.

The Greek units of Cypriot banks were excluded from the deposit levy, Greek finance minister Yiannis Stournaras said. 

People queue up at an ATM in Nicosia

PARTIES reacted angrily to the Eurogroup decision, with communist AKEL saying it was contemplating proposing Cyprus’ exit from the common currency, the euro.

However, Communications Minister Tasos Mitsopoulos warned that the alternative was the collapse of the banking sector and bankruptcy.

AKEL leader Andros Kyprianou described Cyprus’ treatment by the troika as “vindictive and neo-colonial,” adding that his party would discuss proposing the island’s exit from the eurozone.

“They are attempting to impose their political options on Cyprus, leading out country and people to conditions that are similar to those in other countries of the European south,” Kyprianou said.

Kyprianou held President Nicos Anastasiades responsible for the developments, saying that his party’s secretariat will recommend rejection of the measures.

Socialists EDEK slammed the EU for “burying the principle of community solidarity” and the government for its “unconditional surrender” to the absurd and outrageous demands.

“Neither the unprecedented and catastrophic measures would be tolerated nor teh humiliation of the Republic of Cyprus and its people,” EDEK said.

Government partners DIKO were cautious in their approach, saying they needed to be briefed on the decision before taking a stance.

The party nevertheless censured the “unacceptable blackmail” that certain EU circles used to force Cyprus to agree.

President Anastasiades will be briefing party leaders at 8.30 this evening, ahead of a cabinet meeting.

“As soon as he returns to Cyprus he will convene a meeting of political leaders to put before them the facts and alternative scenarios,” Communications Minister Tasos Mitsopoulos said. Asked about the alternative scenario, Mitsopoulos was blunt: “It is the closure of our banks on Tuesday and bankruptcy.”

THE solution the government selected was painful but it was the only one on the table, President Nicos Anastasiades said today, as Cyprus found itself before a fait accompli during the Eurogroup meeting.

“The decision we selected may be painful but it was the only one that will allow us to go on with our life without adventures,” Anastasiades said in a written statement. “It is a decision that leads to the historic and definitive rescue of our economy.”

The president said that during the Eurogroup meeting, Cyprus was faced with dilemma of a disorderly bankruptcy on Tuesday or a painful but controlled management of the crisis.

Anastasiades said the consequences of rejecting the deal would be the collapse of the Popular Bank because the European Central Bank had already decided to cut its emergency liquidity while Bank of Cyprus would have been able to avoid the same fate.

“This would have lead 8,000 families to unemployment from one moment to the next,” the president said.

A collapse of the banking sector could have led to an exit from the eurozone and a devaluation of the island’s currency by at least 40 per cent, Anastasiades said.

Nevermind the lost deposits and the billions that the state would have to pay in compensation, he said.

“It is well known that the deep economic crisis and the state of emergency we are in did not come about in the last 15 days when we assumed the country’s administration,” the president said. But “the severity of the situation does not allow me, and anyone else, to engage in a blame game.”

Anastasiades is scheduled to address the country tomorrow.

Anastasiades with German Chancellor Angela Merkel on Friday before the Cyprus meeting

This division 2 European Cup game has taken on an importance far beyond its divisional role, because it is the first time any rugby-playing country has been able to challenge the world record of consecutive wins held by Lithuania (18) which most pundits claimed could never be exceeded. 

Rugby is so controlled, that it is extremely difficult for a single country to dominate the opposition, to the extent that long runs of winning games are impossible. 

However, Cyprus was obviously not taken into the equation, because when they met Bulgaria, a nation they had destroyed on the field by accumulating 149 points against them over the last year, they thought they were about to equal the world record of 18 consecutive wins. 

Until October, the only countries in the rugby world that could challenge the record were New Zealand, the world champions, and the might minnows, Cyprus. 

The All Blacks dominate world rugby and Cyprus doesn’t. 

But, the mighty All Blacks drew with Australia and fell off the tree, leaving the field clear for the Moufflons.

So could Cyprus continue their winning ways against the Bulgarians and equal the world record? 

You bet your life they could - and did.

The Moufflons’ starting line only included one non-Cypriot in the form of the ever reliable but unconventional Marcus Holden. 

There was a degree of understandable nervousness among the Moufflons and inevitably it resulted in a penalty within the first two minutes: 3-nil to Bulgaria.

Within the next minute Cyprus responded with an aborted attempt at goal by Holden that was swiftly followed by a movement from Binicos, the playmaker, which saw Rennos Iouannides cross for the first of his four tries. 

Play continued with a number of penalties and some sloppy play that was soon rectified by the Moufflons taking complete charge of the game, their handling - which many six nations sides would envy - was excellent throughout, and scores tumbled in by Torgut and Loizides and many conversions by the ultra-reliable Holden, enabling the Cypriots to leave the field at half-time with an extra score, Fidias Efthymiou (3) taking the total to 46-3.

The play continued in the same vein with Holden grounding the ball behind the try line and some excellent work by the young giant Frixou, who is one to watch. 

The Bulgarians caused many difficulties in the set pieces and the mauls, but lacked the nous to capitalise on it.  

By now, the Moufflons were rampant, but a break in concentration allowed the Bulgarians to score from a bounce off the post, giving them an easy conversion with a score of 10 points that they never improved on. 

More tries followed from Loizides (2), Binicos (1) . Holden converted 8 times. Final score: Cyprus 79-Bulgaria 10. My man of the match was the amazingly unselfish Gorgious George Agathacleous, whose distribution was first rate.

A magnificent crowd enjoyed a splendid afternoon of carnival rugby and, while believing they were supporting the national side in equalling the world record, were unaware that it has now been established that the previous claim of 18 consecutive wins was flawed because two of the games were friendly and therefore not eligible for consideration in world title claims. 

This means that Cyprus could have claimed the title when they beat Slovenia. 

They now can claim to hold the record for most consecutive wins: most consecutive winning games of margins of four tries or more; most consecutive international winning games by the same coach; and most consecutive wins with the same captain. 

Bravo Cyprus.

Winning ways: the record-holding Cyprus side, which crushed Bulgaria 79-10 on Saturday