Attempts to broker a deal for national carrier Cyprus Airways (CY) continue today as unions and government conceded there may be room for discussion on some aspects of a government proposal to restructure the company.

A meeting was due to take place at the labour ministry today with the CY board, the unions, the ministers of labour, commerce, and communication and the finance ministry’s permanent secretary.

With the exception of the pilots’ union, PASYPI, who have accepted the restructuring proposal, most of the other CY unions have taken issue with some of the terms. Measures – based on a draft plan by Air France Consulting – include cutting staff by 650, across the board salary reductions of 17 per cent and reducing the fleet size.
All staff needs to agree to the proposal, if it is to go through.

Under the measures, staff will not be getting redundancy compensation.
Communications minister Tasos Mitsopoulos said that the European Union would not allow them to give redundancy compensation, but that even if they wanted to break the law and compensate staff to the tune of an estimated €30 million, the government could not afford to.
The head of union SEK, Nicos Moyseos, said that it was not clear that the EU would object to the redundancy package but suggested that negotiations would focus on introducing staggered wage cuts rather than across the board.

Head of PEO union Pambis Kyritsis that “take it or leave it” proposals had failed.
Meanwhile, CY chairman Stavros Stavrou said in a written statement the board was “doing whatever was possible” to find the best solutions for those staying behind and for those to be made redundant under the plan.

The European Commission is investigating the government’s multi-million assistance granted to CY over years, and has said the government can give no more help without prior approval.
CY lost close to €80 million in 2011-12.

IN light of the serious economic crisis sweeping the island, the energy regulator (CERA) decided to cut the price of electricity by 5.0 per cent, it was announced today.

The reduction will be temporary and will be reviewed every two months, CERA said.

The reduction follows a recent decision to scrap a 5.75 per cent surcharge on electricity bills imposed after the Mari naval-base munitions explosion incapacitated Cyprus’ largest power station.

 It had been introduced in September 2011 to help the electricity authority (EAC) cope with the destruction.

FORMER PRESIDENT Demetris Christofias came out of the woodwork yesterday to say he felt “embarrassed” for those spreading nasty rumours about him and to confirm he has not applied for political asylum in Cuba. 

Speaking from AKEL headquarters, he said: “What you see before you is not the ghost of Christofias, but the same Christofias who not once left Cyprus, not even for a moment.”

The former president has come under repeated attack from the current government which argues he unnecessarily delayed signing a memorandum with the troika during his presidency, resulting in the country’s banks becoming indebted to the tune of billions of euros, and bringing the Cypriot economy to its knees.

Blasting the “mudslinging” and “nasty whispers” circulating against him and his family, Christofias, speaking in the third person, said he decided to speak out against the rumours that “Christofias supposedly has a flat in Havana or is planning on going or went to Cuba to seek asylum, or that he has a luxury flat in London, or that his children, his daughter Christina for example, from the millions received from her wedding has made deposits in Switzerland, or the other daughter in London and her husband etc”. 

Christofias said he was preparing a declaration of his financial interests which he would make public. 

The calculations will show he is in debt, “not imaginary but real debt”.  

He added: “I am truly embarrassed for those who are behind this mudslinging. Psychological war is worse than physical assassination.”

Christofias brushed off criticism against his leadership in the last five years, saying that over the years successive AKEL leaders have received threats, been undermined and even faced even attempted murder. “People need to understand that we left with our heads held high and they will remain high.” 

Former president Demetris Christofias bemoans psychological warfare

THE ENERGY regulator (CERA) decided yesterday to cut electricity bill prices by 5.0 per cent because of the economic crisis.

The reduction across all basic Electricity Authority (EAC) tariffs will be effective from the end of April for monthly bills and in May for two-month bills, CERA said. The cut will be temporary and will be reviewed every two months to take into account the country’s economic situation and the EAC’s commitment to reducing expenses, the regulator said. CERA has asked the EAC to submit a monthly report.

“The decision was due to the economic crisis sweeping the island (and) the need to temporarily mitigate the serious consequence of the economic crisis to consumers,” CERA said in an announcement.

CERA has already scrapped a 5.75 per cent surcharge on electricity bills imposed after the Mari naval base in 2011 which incapacitated Cyprus’ largest power station. It also reviewed in February a formula for calculating fuel costs to the EAC which has seen a 4.0 per cent bill reduction, CERA said. CERA reviews the fuel cost formula at the end of each month. 

CERA also announced a new net metering scheme for small systems to which vulnerable groups will be given priority. Under the system, photovoltaic panels’ energy production is fed back to the grid and is offset against the overall electricity consumption. So a consumer who uses up 1,000kWh and produces via photovoltaic panels some 200kWh will be charged just for the 800kWh. This benefits the consumer because the EAC charges consumers more after their consumption exceeds a set threshold. 

The regulator also said it will introduce a scheme for businesses and industrial consumers to power their buildings with photovoltaic panels, reducing costs.

None of the schemes for consumers and business will be subsidised, CERA head Giorgos Shammas said during a news conference. But CERA official Kypros Kyprianides who also present at the press conference said they were hoping – if authorities agreed – to subsidise vulnerable groups who could with install a small system €5,000. “So a subsidy of €1,500 or €2,000 would be a significant amount,” Kyprianides said. 

 CERA said it will expedite the processing for applications to install photovoltaic panels. With applications piling up and funds drying up, CERA stopped accepting new applications last year.

Electricity Authority

JEFF Berwick has been a regular on the TV talk-show circuit in the US ever since revealing three weeks ago plans to install the first bitcoin ATMs in Cyprus and Los Angeles. The 42-year-old entrepreneur is looking to shift bitcoin to the next gear.

Bitcoin is digital or virtual currency. Unlike typical currencies, it has no central bank or central organisation. Instead, it relies on an Internet-based peer-to-peer network. So far bitcoins could be traded over the Web and used to buy stuff online or even at certain retail outlets.

Bitcoins are stored in anonymous “electronic wallets,” or code, and can travel from one wallet to another by means of an online peer-to-peer network transaction.

The techie jargon may sound daunting, but getting started is pretty straightforward: download the free client (software) and install it on your computer. The software automatically creates a wallet or account for you. Once your wallet is set up, you'll get your first bitcoin address (like an email), which means you're ready to receive bitcoins.

The system has been set up so the global money supply is automated and finite. The number of bitcoins in existence will never exceed 21 million. There are currently around 11m bitcoins in circulation, giving a market value of around $2bn. Twenty-five new bitcoins are “mined”, or produced, by servers every 10 minutes, and they are traded through online exchanges. Also, the more bitcoins are produced, the more complex the mathematical calculations used to render them, requiring ever greater processing power and electricity.  So there’s a cost, and the price has previously moved in relation to that. Most users buy them.

Previously, individuals who wanted to purchase bitcoin privately without revealing personal details had to arrange face-to-face meetings through real-life exchanges; visit online marketplaces where participants take counterparty risk and rely on user reputations measured by an e-Bay-like ratings system; or make a cash deposit at a bank or retail location, under the watchful eye of security cameras.

That’s where the ATMs come in. They operate similarly to vending machines; you punch in a code or insert or swipe a card. Now, with a device that directly converts paper cash to bitcoin anonymously, the interaction is between human and machine.

What makes Berwick’s product hot is that his machines will be bi-directional. Instead of connecting to your bank account, the software he and his team has developed is installed on an ATM and converts cash to bitcoins stored in a bitcoin ‘wallet’ or extracts cash based on what's stored in your personal bitcoin account.

Conventional digital payment systems (credit cards etc) don’t offer this degree of anonymity. It’s this privacy that’s got advocates excited. “Bitcoin is freedom,” declares Berwick, a self-styled anarcho-capitalist and libertarian.

Though bitcoin has been around since 2009, it has gained a lot of traction over the last few weeks. Analysts attribute this to waning faith in banks, especially in the wake of the unprecedented raid on Cypriot savers. But the e-currency has its fair share of critics: some say the system is all too vulnerable to hackers who deliberately seek to cause panic-selling and thus manipulate prices; others dismiss it as no more than a speculative bubble. Mid-week, the currency hit a new high of $255 (€(203) before falling to $105 and then bouncing back to $130. Two months ago, a bitcoin was worth $20.

The Mail  got in touch with Berwick who took time to answer questions by email:

Q: Was the Cyprus crisis really the trigger for your idea?

A: No, we had completed the world’s first bi-directional ATM and we wanted to announce it. At the same time, every bank and ATM was closed in Cyprus so we decided to announce that we’d put the first one there as a humanitarian effort against the oppression of the governments and central banks.

Q: How are your plans going for installing ATMs in Cyprus (and elsewhere)? Have you reached out to anyone here yet, and who, and what was the response?

A: Our plans are going well. There are a number of logistical items we are dealing with but we should have our first bitcoin ATM machine live in the next 1-2 weeks. We are, however, thinking of putting the first one in Los Angeles just because of the proximity to our operations. We are in contact with numerous people in Cyprus about getting an ATM over there as soon as possible but we’ve been inundated with orders for machines from over 200 people in over 30 different countries and are scaling up to meet that demand. 

Q: What's the deal with the ATMs: is there a working prototype yet?

A: Yes, we’ve had a working prototype for about a month but we’ve just recently decided to upgrade it dramatically because of the demand. We’re now working with some of the most high-tech ATM machine companies on earth to provide an even better product. That has been the slight delay. We happily misjudged the interest of the market and are now scaling up to meet demand. We expect we will have the first fully operational, upgraded machine working in the market within two weeks from today.

Q: Won't the ATMs run out of bitcoins at some stage?

A: There is constantly a market for bitcoins. All we do is act as a transferring agent from the market to consumers and from consumers to the bitcoin market. At the market price there is always liquidity in bitcoins and local fiat currency. We are just a transfer agent or market maker for bitcoins for fiat currency or fiat currency for bitcoins. We have nothing to do with mining.

Q: I’m guessing that ATM operators will charge a fee for using the ATMs, and you'll be making a percentage off that fee, is that how it works?

A: Yes, of course. We aren’t doing this for free. We aren’t capital-destroying communists. We’re producing wealth to willing, voluntary customers who desire our product. We are still working through the profitability but our aim is to make the transactions as cheap as possible while still creating a profit for our organisation.

Q: What about arguments that bitcoin has no intrinsic value, and could end up just another bubble?

A: Fiat currencies have zero intrinsic value. They are just pieces of green paper with dead criminals painted on them… and a pyramid with an all-seeing eye…which no one seems to notice. Gold, too, has no intrinsic value. Everything is subjective and bitcoin has value because of its decentralized, unregulatable, untaxable nature.

Q: I watched you on the ‘Santelli Exchange’ on CNBC, and you sort of dodged a question as to what happens when/if something goes wrong with bitcoin, since there's no one you can call.

A: As a Cypriot, you should know there is never anyone you can call in government or central banks. That is a facade. I don’t dodge questions, I answered honestly that the private enterprise market can come up with better solutions than any thieving, confiscatory government or central bank.

Q: What’s your broader take on bitcoin; would you advise people to put a lot of money into this or just part of their savings as a backup? 

A: I personally don’t “invest” in bitcoin. I don’t invest in any money. Money is not meant to be invested in as it does not have an investment return. But I do recommend that all people take a look at bitcoin as a way to transact. You can open a Bitcoin account in about three seconds. You can then receive bitcoins from someone in another few seconds. And you can buy something with those bitcoins in another few seconds. That total time, if you were to do it through the fascist western monetary system would take weeks if not months and a number of charges and people asking you what you are doing and why. Bitcoin is freedom.

Bitcoin ATM

LENGTHY NEGOTIATIONS on the future of the ailing national airline Cyprus Airways (CY) between the government, CY board and unions ended in agreement last night, giving the airline a glimmer of hope for the future. 

Attempts to broker a deal on a government proposal to restructure the company resulted in a compromise agreement last night at the labour ministry, involving the unions, ministers of labour, commerce, and communication and the finance ministry’s permanent secretary. 

After lengthy negotiations, the various stakeholders agreed to offer a redundancy package for 490 members of staff, from the 560 earmarked in the original restructuring plan for the airline.  

Agreement was also reached on providing redundancy compensation for the 490, with the level concluded at 50 per cent of the compensation paid in the last redundancy plan. 

Redundancies will take effect from January 1, 2014, while payment will be divided in to six instalments during a three-year period. 

CY staff have seven days to register an interest in a redundancy package, though the airline’s management will have the final word on redundancies. 

Regarding the airline’s provident fund, €6m will be covered by a general finance ministry plan on provident funds, while the remaining €12m will be covered through the sale of CY property. 

The payroll will also be reduced by 17 per cent in total. CY chairman Stavros Stavrou said the company has already introduced a 9 per cent cut, meaning an extra 8 per cent cut will now be implemented. 

All pilots will receive a horizontal pay cut of 17 per cent while the remainder of the staff will see staggered wage cuts, starting from 7 per cent for those earning under €1,000, going up to 20.5 per cent for high-earners. 

With last night’s agreement, CY could now “spread its wings”, said Stavrou. 

Labour Minister Zeta Emilianidou said CY would continue to exist, thanks to the agreement. 

Pilots’ union PASYPI head Petros Soupouris said following last night’s deal on implementation of the restructuring plan, CY could continue flying, taking its 65 years of operation to 100.  

Before the deal was reached, government spokesman Christos Stylianides repeated the government’s position yesterday that the restructuring was necessary for the national carrier to stand a chance at finding a strategic investor to potentially take it off the state’s hands. 

“If we do not meet this condition (for restructuring), unfortunately we cannot move onwards,” Stylianides said.

With the exception of the pilots’ union, PASYPI, who have accepted the restructuring proposal, most of the other CY unions had taken issue with some of the terms. Measures – based on a draft plan by Air France Consulting – include cutting staff by 560, across the board salary reductions of 17 per cent and reducing the fleet size. 

All employees need to agree to the proposal, if it is to go through. 

Under the original measures before last night’s agreement, staff were not due to get redundancy compensation.

Communications minister Tasos Mitsopoulos said that the European Union would not allow them to offer redundancy compensation, but that even if they wanted to ignore EU regulations and compensate staff to the tune of an estimated €30 million, the government did not have the money.  Any redundancy compensation would be investigated by the European commission who is looking into whether previous state assistance complied with EU rules.

The European Commission is investigating the government’s multi-million assistance granted to CY over years, and has said the government can give no more help without prior approval. 

CY has post a loss of close to €80 million in 2011 and 2012. 

PRESIDENT NICOS Anastasiades yesterday appointed the members of the advisory National Council for the Economy, headed by Nobel prize winner Christopher Pissarides. 

The other nine members are: Stavros Zenios (University of Cyprus [UCY] professor of finance); Louis Christofides (UCY professor of economics); Alecos Michalides (UCY professor of finance); Sofronis Clerides (UCY associate professor); Marios Clerides (senior general manager of risk management and strategy at the Hellenic Bank Group); Marios Zachariades (UCY associate professor of economics); Alexander Apostolides (European University Cyprus lecturer in economics and economic history); Marianna Pantelidou (finance ministry consultant); and, Panayiotis Theodossiou (professor of finance and dean of the faculty of management and economics at the Cyprus University of Technology). 

FORMER finance minister Michalis Sarris yesterday sought to set the record straight regarding a controversial deposit haircut bill, saying it was in fact legislation to tax gains from interest.

The bill however did include a condition to tax part of deposits if the capital was withdrawn before the end of the year, he told reporters.

The issue came up after Attorney-general Petros Clerides revealed he received instructions from the finance ministry on the morning of March 15 to prepare a bill concerning a haircut on deposits.

Late that day, the Eurogroup decided to tax depositors as part of the island’s bailout deal.

The opposition accused President Nicos Anastasiades of knowing about the haircut, a charge he categorically denied.

Anastasiades also demanded to know who had instructed the attorney-general to prepare the bill.

Sarris, whose official reason for resigning ten days ago was to facilitate an investigation into the bank debacle, said yesterday that the bill focused on taxing gains from interest.

But there was a safeguard “to tax part of the deposits if the capital was withdrawn before the end of the year,” he said.

Cyprus’ proposal was for a 50 per cent tax on the interest collected from deposits.

And to prevent people from withdrawing their money, a provision had been included that if any deposits dropped below 70 per cent, then the interest, or 2.5 per cent, would go to the government in the form of tax.

“This is where the confusion was,” the former minister said.

“All officers had general instructions that the necessary bills must be prepared,” he said. “This was our general direction, without accepting a haircut, but be prepared with alternative solutions.”

Sarris said that from the beginning, despite the reports and the insistence of the IMF and Germany on some sort of depositor participation in financing the bailout for Cyprus, “we were strongly against and were trying to find alternative solutions with the help of the European Commission.”

Sarris said Cyprus believed €3.0 billion would be enough but the IMF and Germany insisted on €6.3 billion.

The first Eurogroup decision on March 15 called for a tax on all deposits – 6.7 per cent on those under €100,000 and 9.9 per cent on anything over that amount.

“I believe if the agreed solution had been adopted things would be much better,” Sarris said.

Without having a plan B, parliament rejected the decision, prompting a lengthy bank closure and a new scheme, which called for the resolution of Laiki and a haircut on uninsured Bank of Cyprus deposits – over €100,000 -- that could reach 60 per cent.

Sarris described the developments as an assault of seismic proportions on the island’s banking system, which meant that growth rates in the next two to three years would be extremely negative.

Former finance minister Michalis Sarris

THREE Central Bank of Cyprus (CBC) board members resigned yesterday, in what could only be interpreted as a motion of no confidence in the governor who has been under fire over his handling of the banking debacle.

Demetriades claimed the CBC’s independence was being attacked by the government while at the same time his family was being threatened by people who lost money in the crisis.

The three members, Haris Ahniotis, Andreas Matsis and Louis Christofides, quit the seven-member board, leaving Governor Panicos Demetriades alone with one remaining member.

Another member resigned a few months ago while the government recently rescinded the appointment of Sypros Stavrinakis to the post of deputy governor.

The CBC has no executive powers but yesterday’s resignations can ne interpreted as a motion of no confidence to Demetriades who has been under increasing pressure to resign over his handling of the banking crisis.

None of the members made public the reasons for their resignations although reports said that Ahniotis and Matsis were displeased with the largely ‘ceremonial’ role of the board.

One source however suggested Demetriades had asked the board to approve hiring Stavrinakis as his adviser but they refused.

The pair’s resignations could be linked with that, the source said.

Demetriades has been under fire over his handling of the banking crisis, which some believe had been exacerbated by his actions.

In an interview with Bloomberg, Demetriades accused the government of attacking his institution’s independence.

 “The independence of the central bank of Cyprus is being attacked at this time,” Demetriades said in an interview in Dublin.

His ability to manage the situation being made more difficult by “death threats not only to myself, but toward my children and my wife,” he said. 

“The government seems to have committed to a sale of state gold without consulting the CBC,” Demetriades said, adding there has been “constant interference in relation to the management of the banks under resolution.”

Parliament has said it will examine his actions mainly over an investigation into the banks.

Some accuse the governor of misleading parliament regarding the mandate of the investigation by Alvarez and Marsal (A&M) into the activities of the island’s two biggest banks which have led Cyprus to the brink of bankruptcy. 

His critics argue that the A&M investigation was restricted mainly to investigating the Bank of Cyprus rather than Laiki, despite parliament being told otherwise in a letter sent by Demetriades to House President Yiannakis Omirou last November.

Cyprus Central Bank

WHAT ARE CYPRUS' TOTAL FINANCING NEEDS?

Cyprus' total gross financing needs are estimated at €23 billion from the second quarter of 2013 to the first quarter of 2016. This includes recapitalisation of the banking sector, the redemption of maturing medium- and long-term debt including loans and fiscal needs.

Of this amount:

- the euro zone bailout fund will provide €9 billion 

- the International Monetary Fund will provide €1 billion

- Cyprus will come up with €13 billion 

WHAT THE 10 BLN FROM INTERNATIONAL LENDERS WILL BE SPENT ON

- €2.5 billion will be spent on recapitalising what is left of the Cypriot banking sector after the closure of Laiki bank and the restructuring of the Bank of Cyprus. The recapitalisation will be financed by the eurozone bailout fund ESM through its bonds, without raising the cash on the market.

-- €4.1 billion will be spent to redeem maturing government debt.

- €3.4 billion will cover the fiscal needs of the government in the three-year period.

HOW CYPRUS WILL MAKE UP ITS CONTRIBUTION

- resolution of Laiki bank, losses imposed on junior bondholders and deposit for equity swap of uninsured depositors at Bank of Cyprus - up to €10.6 billion 

- corporate tax hike by 2.5 points to 12.5 percent and a doubling of a capital gains tax to 30 percent - up to €600 million 

- gold sales - approximately €400 million 

- roll-over of debt held by domestic investors - up to €1billion

- privatisation - estimated €1.4 billion 

-  lower interest, longer maturity of €2.5 billion borrowed from Russia - up to €100 million

LOAN MATURITY

According to a proposal by the eurozone bailout fund, the European Stability Mechanism (ESM), loans to Cyprus will have a average maturity of 15 years and a maximum maturity of 20 years.

GERMAN lawmakers on a visit to the island this week probably received a rude awakening on realising the sense of betrayal felt by most Cypriots towards their EU partners. 

They now have to go back to Berlin and decide whether to vote in favour of the Cyprus rescue package but before judging Cypriots for their emotional response to what is in essence a ‘Cypriot mess’, they should remember that for the last six months, German media and politicians have talked up the ‘dirty money’ of Russian oligarchs being washed in Cypriot banks, hence the misguided perception among ordinary Germans that most of the money in the banks was Russian. It was not.

Following the Eurogroup’s decision to impose a massive hit on depositors, German Finance Minister Wolfgang Schaueble told us not to worry, because those who created the crisis were the ones being asked to pay for it.  

Everyone accepts that bad government, bad banks and speculators were responsible for what has happened but the argument ‘Germans good, Cypriots bad and Russians everywhere’ has become a bit of a convenient mantra in justifying the unprecedented raid on deposits, as has the notion that only the wealthy have been stung, that the Cypriot taxpayer, not the EU taxpayer must pay, and that hard-working German taxpayers are tired of bailouts, even though a bailout is actually a loan repaid with interest.

It may come as shock to many Europeans but there is such as thing as a hard-working Cypriot taxpayer. However it seems everyone in Cyprus has been lumped into one big population of moneygrubbers who ‘gambled’ their hard-earned money in the island’s ‘casino banks’. 

If putting your savings into a bank for safekeeping is considered gambling then are all EU citizens guilty and deserve what they get when their banks fail? No because only Cypriot banks were the devil in disguise. 

Let’s look at Deutsche Bank however. It’s embroiled in a slew of disputes, including a carbon trading scandal. It is also one of a number of banks under investigation for allegedly rigging benchmark interest rates, including the Libor scandal, and stands accused of tax evasion, failure to report money laundering, and obstruction of justice.

Would ordinary hard-working German taxpayers, if they saw their savings disappear overnight and were plunged into a ruinous bailout, take it lying down? 

According to an article in Spiegel Online yesterday, Christoph Schwennicke editor-in-chief of the German political magazine Cicero, they would not.  If Angela Merkel were to force Germans to endure the kinds of measures she has been demanding from the rest of Europe, they too would take to the streets, he says.

“The chancellor speaks with a forked tongue and applies double standards. While she wants other Europeans to make do with less, she wants her own people to have their cake and eat it too,” he says.

And while Merkel is grinding the rest of Europe under the boot of austerity, her government has launched a €50 billion economic stimulus programme for investments in roads, buildings and “seemingly everything else imaginable”.

“But when it comes to Germany's suffering neighbours, Merkel adamantly opposes the use of economic stimulus. In her view, they need to make cuts until it hurts,” says Schwennicke.

EUROZONE finance ministers yesterday backed a €10 billion bailout for Cyprus, after commending the Cypriot authorities for their “demonstrated resolve” and the “efforts” of Cypriot citizens the last few weeks. 

The ministerial support now opens the way for several eurozone countries, including Germany and Finland to seek approval for the three-year bailout in national parliaments, so that loan agreement with Nicosia can be signed by April 24.

The first tranche of the loan - €9 billion of which will come from the euro zone and €1 billion from the International Monetary Fund (IMF)- will flow to Nicosia in mid-May, following the conclusion of the independent anti-money laundering audit by Moneyval and Deloitte. 

The €10bn eurozone loan will have an average maturity of 15 years and maximum maturity of 20 years.

According to a statement issued by the group of eurozone finance ministers in Dublin, the Eurogroup expressed satisfaction with the Cypriot authorities for implementing “decisive bank resolution, restructuring and recapitalisation measures to address the fragile and unique situation of Cyprus' financial sector”. 

It commended the authorities “for their demonstrated resolve in implementing these important measures in a tight timeframe and reiterates its appreciation for the efforts made by the Cypriot citizens over the last weeks”.

The Eurogroup said the “necessary elements” were now in place to launch the relevant national procedures for the formal approval of the €10bn loan subject to the IMF’s contribution. 

The IMF’s board is expected to consider its €1bn contribution to the international bailout in early May. 

Meanwhile, an agreement on the restructuring of the €2.5bn loan granted to Cyprus by the Russian Federation remains pending.

Cyprus, meanwhile, is expected to come up with €13.5 billion of its own money to cover its financing needs over the next three years, which include paying for banks’ recapitalisation needs from an estimated €10bn in November 2012 to €13.5bn), government debt (€5bn) and public finances (increased from €2.5bn to €5bn in the last five months). 

Government spokesman Christos Stylianides yesterday argued that the delay in signing a memorandum agreement by the previous government resulted in a rapidly deteriorating banking and fiscal environment which in turn has had a massive impact on forecasts regarding government finances and bank recapitalisation needs.  

The amount that Cyprus would need to contribute on its own to the rescue package had been estimated a month ago at around €7.5bn. It now stands at €13.5bn. 

Given the massive blow to the economy, which currently remains in the freezer, and the huge applications for deposit outflows pending at the banks in recent weeks, both the public deficit and banks’ recapitalisation needs had to be revised upwards. 

The original sum of €7.5bn and later €13.5bn that Cyprus has to come up are not directly comparable, EU Economic and Monetary Affairs Commissioner Olli Rehn told a news conference yesterday.

“People have been comparing apples with pears and coming up with oranges,” Rehn said, adding, “they are ... not strictly comparable because the construction of the first and second, or final package are different”.

The €17.5bn is related to net financing needs, while the larger figure of €23.5 is a gross financing concept, he said. The larger number also includes additional buffers to allow for weaker fiscal developments and additional costs in banks, added Rehn.

Stylianides argued that the government would be able to come up with the extra cash without further haircuts or measures than those already included in the memorandum of understanding (MoU) with the troika.

The bulk of the €13.5bn will come from the closure of Laiki bank and the restructuring of the Bank of Cyprus (estimated to bring in €10.6bn).

The government hopes to raise €1.4bn through privatisations, €1bn by rolling over debt and €0.1bn through the restructuring of the Russian €2.5bn loan.  

A further €0.6bn is expected to be raised through austerity and tax revenue measures included in the MoU, and €0.4bn by selling most of the gold reserves at the Central Bank. The extra amount will be used as a buffer, said the government spokesman. 

Cyprus will also raise taxes, cut spending and implement structural reforms to improve its public finances and to be able to eventually repay its debt, that is to fall to 104 percent of GDP in 2020 from a peak of above 126 percent in 2015.

International lenders now forecast the Cypriot economy will contract almost 9 per cent this year and almost 4 per cent next year before returning to weak growth in 2015 and 2016.

Central Bank of Cyprus (CBC) Governor Panicos Demetriades was yesterday quoted by Bloomberg accusing the government of preparing for the sale of gold without consulting first with the supervisory authority which is the competent body to deal with such matters. 

European Central Bank (ECB) President Mario Draghi yesterday gave his view on what constitutes respect for the independence of the CBC: “What is important however is that what is being transferred to the budget, to the government budget... Out of the profits made out of the sales of gold should cover first and foremost any potential loss that the central bank might have from its ELA (emergency liquidity assistance).

“To me that is the evidence that the independence of the Central Bank is being respected,” said Draghi.

Demetriades has recently confirmed that the CBC withdrew over €9bn from the ECB’s ELA to keep Laiki afloat until after the presidential elections in February. 

International lenders insisted in the bailout negotiations with the government that the Bank of Cyprus be lumped with the massive ELA debt owed to the ECB. 

President Nicos Anastasiades yesterday said he appealed to European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy to do more to help revive growth in Cyprus, possibly through the use of the EU’s structural funds.

Such funds are paid out from the EU’s long-term budget- for which European Parliament approval is pending- to all of its underdeveloped regions to co-finance projects with national authorities that help them expand and bring their wealth to the EU average.

Rehn said the European Commission  would try to help the island's economy grow again with better use of EU structural funds: “We stand by the Cypriot people and we are committed to providing support and technical assistance to help Cyprus to get through the tough times and overcome the current difficulties.

“We will try to reallocate structural funds so that we can use them as effectively as possible to support the kind of economic activities in Cyprus that will help the country to return to recovery ... for growing and investment and employment,” Rehn said.

The flow of such funds is spread over the seven years of the EU budget, but can be accelerated to increase the amount of money in the earlier years at the cost of the outer ones -- this method has been employed to help Greece already.

Finance Minister Harris Georgiades, following his first Eurogroup meeting, welcomed the political endorsement of the MoU as a “significant development for Cyprus”. 

He noted that the Eurogroup’s approval of the MoU without any further amendments “constitutes a powerful signal for stabilisation, while at the same time being an acknowledgment of the efforts of Cyprus and its people”.

Georgiades expressed satisfaction with the European Commission's intention to provide technical and financial assistance to help Cyprus hasten its path towards recovery and growth. 

Meanwhile, Moody`s Investors Service yesterday downgraded the deposit rating of the Bank of Cyprus to Ca with a negative outlook from Caa3 while downgraded the bank’s unsecured debt to C from Caa3. 

The ratings agency also confirmed its deposit rating for Hellenic Bank at Caa3 with a negative outlook.  

Finance Minister Harris Georgiades (centre) with Eurogroup President, the Dutch Finance Minister, Jeroen Dijsselbloem on his left

OVER 2,000 applications for food aid have been submitted to the community market set up by the Larnaca municipality to help the poor, resulting in the need for a stricter screening process. 
Larnaca mayor Andreas Louroudjiadis told Cyprus News Agency that the large number of people needing help has forced the local authority to enforce a stricter application process.
Only those who have filled in the relevant application form will have access to the free food supplies, said Louroudjiadis.
Forms can be found at the community market while a special committee is responsible for evaluating each application. Those who are approved will receive a card to be presented when picking up food every Friday, said the mayor.

KOUKLIA local council has requested the creation of a community medical centre to carry out basic medical checks on pensioners and prescribe them medication.
Local community leader Michalakis Solonos sent a letter to Health Minister Petros Petrides stating that the local council is prepared to organise the collection of medication from the Paphos general hospital and distribute it to the area’s pensioners.
He added that the Kouklia council could provide the building and equipment to set up a local medical centre but lacked the expertise and presence of a doctor to carry out their duties in the village.

 THE HEALTH ministry has put one psychologist on-call for its round-the-clock hotline for people suffering from depression due to the financial crisis until the effects of the crisis become more apparent.
 “It is a known fact that when a crisis situation hits the public will go through psychological problems such as depression and anxiety. Such cases may lead to medical problems if not treated. This is why people affected by the crisis who ask for an appointment with the psychological services are prioritised on the waiting list,” senior clinical psychologist Pantelis Panteli said.
Immediate appointment services began on April 4. A person, couple, family or group can be directly seen by an official without having to register on a waiting list.
“Each area has its own waiting list that is normally not very long. People on the list may have to wait a week or two, depending on the circumstances. Patients influenced by the economic crisis will be seen immediately and this may mean that the waiting period for other patients on the list will be slightly extended,” Panteli said.
The 24-hour support hotline began on Monday. One psychologist will be on-call each day and will be able to transfer the hot-line to their mobile phones so no calls are missed.
“For the time being we have appointed one psychologist to be on-call but if we see that more people are in need of support, more professionals will be put on-call,” Panteli added.
The extent of the effects caused by the crisis will begin to show with time. It is not like the Mari naval base tragedy where the consequences were instant and people needed psychological help as soon as the accident happened, Panteli said.
Callers may remain anonymous but the psychologists prefer to have a more personal approach with callers. If a caller shows suicidal signs the department will contact the police or social services and refer the case to them.

For the hotline call 22-603263 if you are in Nicosia, Larnaca or Famagusta. For Paphos and Limassol call 25-801107/106.

A NEW website has been set-up devoted to helping freelance professionals in creative industries on the island find employment. WebPlay CMS launched IndiGO, the Cyprus Freelancers Online Directory on Monday.
“It is a good opportunity to gather as many freelancers in one directory as possible,” Project Manager, Andreas said. “This will offer advantages to the freelancers who are going to be promoted for free and for the managers of companies who are going to save time when they are searching for a freelancer,” he added.
IndiGO is a free service, designed for freelancers in Cyprus and will provide them with the opportunity to extend their networks and income. They will have the opportunity to create and edit their personal profile, including samples of their work.
“In these harsh times of our economy, IndiGO gives the opportunity to Cypriot freelancers to make a new beginning and extend their networks,” a statement from Webplay CMS said.
On the IndiGO website, visitors can find a brief fees guide and general advice guides which have been developed to help those searching for employment.
The name of the directory was inspired from the name of the colour indigo.
“Indigo or deep midnight blue is a powerful colour related to the right side of the brain. It resonates to the 'New Age' way of thinking,” a statement on the website said.
“So we have decided to label our directory with the word indigo, indicating our desire to change the world and strengthen the importance of the term in the difficult days of the recession (economic crisis),” it added.
According to IndiGO a large number of people are losing their jobs on a daily basis which is leading them down the freelance path.
“What are the creative industries? Well by the term creative industries we mean anything that has to do with the term “creative”. For example, graphic designers, animators, web designers, web developers, musicians, photographers, programmers, web developers etc.” IndiGO said.
It is the first time a directory dedicated to freelancers on the island has been created.

For more information:
http://www.indigo-cy.com
http://www.facebook.com/indigocy
http://www.twitter.com/IndigoCyprus

DELOITTE Financial Advisory has been selected by the Central Bank of Cyprus (CBC) as the independent firm to evaluate the implementation of Cyprus’ Anti-Money Laundering (AML) framework, together with Moneyval of the Council of Europe.
Preliminary key findings are expected by April 20, while reports from Moneyval and the private auditor will be delivered to the CBC, the finance minister and the troika by April 24, when the €10 billion Cyprus bailout is expected to be signed.
International lenders will then report to the Eurogroup on the level of implementation of preventive measures by financial institutions, based on the findings of the two parallel reports by Moneyval and Deloitte.
Moneyval already completed its visit to Cyprus from March 19 to 31, and is now in the process of completing its report in accordance with its terms of reference. Deloitte is now in the process of carrying out their review.
According to a CBC announcement, Deloitte will carry out the review “in relation to the effective implementation of Customer Due Diligence (CDD) measures by a sample of major Cypriot banks with regards to deposits and loans”.
Deloitte Financial Advisory S.r.l. is an affiliate of Deloitte Italy S.p.A., the Italian member firm of Deloitte Touche Tohmatsu Limited.
The same announcement notes that Moneyval will focus on the effectiveness of anti-money laundering implementation while the independent auditor will look at the measures implemented by the credit institutions to prevent criminals from being the beneficial owners of customer deposits in, or loans from, Cypriot credit institutions. It will also present a report containing comments and conclusions with regard to both the overall credit sector’s and individual institutions’ level of compliance with the Cypriot legislation.
All credit institutions in Cyprus with a threshold of over €2 billion of total deposits by the end of 2012 will be included in the exercise.
Due to time constraints, the audit will not cover the adequacy of the internal systems in place in credit institutions to detect Money Laundering/Terrorist Financing (ML/TF), said the CBC.
The findings of the two reviews will not contain any confidential information and will only be shared within Moneyval, the auditor, the CBC and program partners (European Commission/ European Central Bank (ECB)/ International Monetary Fund).
An independent audit of Cyprus’ implementation of AML measures was set as a precondition of any international bailout of the country by its international lenders.
Allegations of Russian money laundering were a dime a dozen in the foreign- mostly German- media in the run-up to the Eurogroup decision last month which concluded on a Cyprus “bail-in” to trigger an international bailout.

THE EUROGROUP’s endorsement of the €10 billion bailout package for Cyprus provides “relief” but is no cause for celebration, said government spokesman Christos Stylianides yesterday.
Now is the time for responsibility and hard work by all, he added.
The spokesman welcomed messages of support from the European Commission regarding substantial EU structural funds- potentially up to one billion euro- that could be used to help Cyprus get out of the current stalemate. 
“Approval of the loan agreement puts a definitive end to the uncertainty since 2011” when Cyprus was excluded from international markets, said Stylianides, adding that for the first time since 2011 Cyprus has secured its debt and financing needs.
Friday’s Eurogroup approval of the international bailout, which provides for a €10 billion troika loan and up to €13.5 billion ‘bail-in’ by Cyprus, has “rescued” the country “from the risk of bankruptcy and ensured its continued presence in the eurozone”.
“The approval of the loan agreement by the Eurogroup provides relief, but does not encourage celebration. The situation would have been very different if timely measures were taken,” said the spokesman. 
“For the government, now is the time for responsibility and hard work by all without exception.”
This week, cabinet will hold two all-day meetings to decide on a package of measures to reorganise and kick-start the economy.
The government will call on all parties without exception to participate in the effort to return to growth, he said.
President Nicos Anastasiades has already written to top EU officials with regard to Cyprus’ urgent need for greater assistance from EU structural funds.
According to the spokesman, judging from initial EU responses, it appeared there was “fertile ground” for additional funds to flow towards Cyprus, noting however, this was completely separate to the €10 billion bailout procedure. 
He welcomed recent comments by European Commission President Jose Manuel Barroso on an increase in structural funds to Cyprus, as well as encouraging statements from the EU’s economic commissioner Olli Rehn.
Talking to Bloomberg in New York on Friday, Barrroso said he believes it is “fair” to consider an increase of structural funds to Cyprus, adding that he has some ideas which he is going to present very soon.
“I’m considering the best way to support Cyprus because of the realities and when the budget for the next seven years for the EU was designed we were not having the figures we have now for Cyprus,” he said.  “Now we need more solidarity for Cyprus because certainly it is difficult to estimate what can be the impact of the adjustments in Cyprus in terms of the real economy,” he added.
Stylianides explained that while Cyprus could not expect more than a €10 billion loan from the troika, it could, under the current circumstances, seek help - up to a billion euro- in EU structural funds assistance.
For example, countries that enter into a memorandum of understanding with the troika have a number of new options.
First, instead of the government providing 50-60 per cent of the total cost of projects co-funded by EU structural funds, it could apply to follow the example of Greece, Ireland and Portugal and seek a 20-80 per cent ration.
Second, there is a substantial amount of money in the EU’s social cohesion fund which can be utilised for emergencies like Cyprus’ overnight economic disaster. 
And third, there is a lot of funding for cross-border projects.
“It is up to us to work in horizontal projects in the Middle East and Africa, but it requires a lot of preparation and work from us, and our ministries. This is where we should be judged in a year or two.
This is what we’ve got left, this and foreign investments,” said Stylianides.

European Commission President Jose Manuel Barroso

THE GOVERNMENT expects Central Bank Governor Panicos Demetriades to “correct” reports in the international press which quoted him as saying his independence was under attack, said government spokesman Christos Stylianides yesterday.
In an interview with Bloomberg from Dublin, Demetriades accused the government of attacking his institution’s independence.
At the same time, his ability to manage the situation was being made more difficult by “death threats not only to myself, but toward my children and my wife,” he said.
The under fire governor further claimed the government appeared to have committed to a sale of state gold without consulting the Central Bank of Cyprus (CBC).
Demetriades added there has been “constant interference in relation to the management of the banks under resolution”.
Speaking to reporters yesterday, Stylianides said he expected the governor’s comments about coming under attack by the government to have been misinterpreted by the authors of the news article.
“We expect and hope for a corrective statement,” he said.
At the time of going to print, no such statement was issued by the CB governor.
The spokesman maintained that despite differences over issues like capital controls and delays in appointing a chairman and board for the Bank of Cyprus, the government “continues to show full respect to the independence of the institutions”. 
Regarding a provision for the sale of state gold to raise €400 million as part of the government’s need to raise up to €13.5 billion to meet financing needs and banks’ recapitalisation needs, Stylianides insisted this came under the sole responsibility of the CBC.
However, the finance ministry did discuss the issue with the European Commission as one of the options for raising much-needed funds to repay debts.
He added that the final decision ultimately rests with the supervisory authority.
European Central Bank (ECB) President Mario Draghi appeared to give a nod towards the possible sale of gold on Friday, despite Demetriades’ protestations.
He noted that as long as the proceeds from the gold sale went towards repaying the €9 billion-plus in emergency liquidity assistance provided by the ECB to Laiki, then the independence of the CBC would be considered respected.

Central Bank governor Panicos Demetriades

 PEOPLE must be mightily depressed with the news they have been reading and hearing in last month or so. Apart from the odd, outrageous sound-bite from the Archbishop there has been absolutely nothing to make us smile, let alone laugh. It has been justified anger, misery and tears for weeks.
It might seem in bad taste to raise the matter, but there have been a few pluses to the catastrophe that hit our Kyproulla. One of them has been watching the self-important union bosses lose their swagger and militancy and sounding like mental cases whenever they do try to use the outdated rhetoric of the good old days in our post-apocalyptic times.
On Thursday, the biggest Cyprus Airway union Synika, rejected the government’s proposal for keeping the bankrupt airline afloat for a few extra months, announcing that the issues at stake were too important to be the subject of an ultimatum.
The Synika leadership wanted dialogue while an AKEL-controlled union said the government was blackmailing the workers and its rescue plan was unacceptable. It also wanted dialogue in order to bash out a better deal.
The unions had their dialogue requests satisfied and Friday night a deal was reached that was not very different from the one they had called unacceptable on Thursday.
Union bosses who secured their members’ conquests, over the decades, by resorting to blackmail and ultimatums should have known, better than anyone, that an ultimatum is a take it or leave it choice that precludes dialogue.

IT MAY sound mean, but it is difficult to feel a hint of sympathy for these overpaid, underworked, parasitic Cyprus Airways employees who have been sucking our blood for decades and want another gallon as compensation.
The main dispute with the government is over the redundancy compensation that should be paid to the 560 (later cut to 490) employees who would be laid off as part of the so-called rescue plan. Unions want compensations over and above what employees that are made redundant are entitled to by law.
It was not enough that staff plundering of the company had driven it to bankruptcy, its workers want to be paid a ‘bonus’ compensation to accept redundancy which is the main reason the ‘rescue plan’ that was prepared seven months ago was never implemented - greedy CY staff were holding out for higher compensation packages.
As finance minister, Vasos Shiarly, had offered them 20 per cent more than they were entitled to but his colleague at the labour ministry, the clueless, big-spending commie, Sotiroulla promised the CY bloodsuckers pay-offs 50 per cent higher than their legal entitlement. The village idiot’s cabinet approved her insane proposal just before leaving office, but had no time to send it to the legislature.
The deal agreed Friday will keep the airline going for a few more months, after which anything is possible.

SPEAKING of greed and selfishness, our judges would give the Cyprus Airways employees a run for their money. I would have thought that after the meltdown the country has suffered our wise and learned judges would have withdrawn their appeal from the Supreme Court against the pay cuts imposed on them.
I had credited them with too much public spirit and common sense. The case continued on Thursday, with the lawyers representing the penny-pinching judges union putting the case against the pay cuts on the grounds that they were in violation of the constitution.
One of the main arguments of the judges’ lawyers was that the pay cuts would destroy the independence of the judicial authority, permitting the legislature and the executive to interfere in the independence of the courts. And as the super-sharp lawyer Polys Polyviou argued, it was wrong to treat judges as public employees, because they were independent state officials.
But all other independent state officials had their wage cut in the austerity drive, without their independence being affected. How would a judge’s independence be destroyed if he gets paid a few hundred euro less a month? I have been racking my brain for an answer but cannot think of one.
I hope Polyviou who is much brainier will offer me a rational explanation as to why judges would cease being independent if they get less money? Surely they would be more independent, when they would have no reason to keep their paymaster - the government - happy.
There would have been a real risk of them losing their independence if the government offered them 20 per cent pay rises, but I am sure they would not have appealed to the Supreme Court against such a decision.

THE MEDIA did not make anything of the Attorney-General Petros Clerides’ admission on Sigma TV on Monday night that in some instances he chose not to uphold the rule of law. It was quite an astonishing admission by the top state official responsible for law enforcement and bringing criminals before justice.
In November 2011 Clerides suspended prosecution against his son Christodoulos who had been caught driving over the alcohol limit. His boy’s car had no MOT and the road tax was unpaid. The story was hushed up until it appeared in Greek newspaper To Ethnos last Sunday, but even then it was not picked by Cyprus’ media.
Reports were everywhere in social media but none of the papers deemed it newsworthy enough to cover. Is it because the AG had not prosecuted hacks driving over the limit in the past or because he was a good source of stories for them?

ON MONDAY night, Sigma TV presenter Chrysanthos Tsouroullis asked Clerides to comment. He confirmed the story and boasted that he had not swept the case under the carpet, but allowed it to go to court before suspending prosecution. And as if to confirm his suspect intellectual powers he said:
“I don’t feel shame or anything else for what I’ve done. I’ve done it for many children and it would not be justifiable exempting my child simply because he was my own child,” Clerides said. At the time of the offence his child was 32 and a practising lawyer.
We certainly did not want the attorney general to discriminate against his own flesh and blood, when he was letting off all youngsters driving under the influence of alcohol. Having an AG who does not believe in enforcing the law is a novelty even by Kyproulla standards. But, to his credit, he treats everyone equally - he does not prosecute anyone’s child (even if the child is 50 years old) who is caught driving over the limit. Orphans, on the other hand, feel the full force of the law because the AG cannot make exceptions for drunk drivers who are nobody’s child.

SOME state sector unions remain untouched by the crisis. Earlier in the week it was reported that Limassol dock workers, who have been successfully plundering the state for decades, had rejected a proposal for a 50 per cent cut of their 14th salary. They felt that losing half of their 14th salary would destroy their independence and subjugate them to the executive authority. They threatened to take their employer to court, feeling certain their case would be won as it would be tried by a sympathetic, fellow-sufferer.

EVERYONE laughed when they heard the once mighty ETYK boss Loizos Hadjicostis declaring that he would not allow a single bank job to be lost. “And all refugees will return to their homes,” retorted a cynical bank employee.
Hadjicostis, one of the biggest fans of Andreas Vgenopoulos, has earned his members a stay of execution by arranging for all Laiki staff to be taken on by the B of C, until the high-achieving nerds of Alvarez and Marsal, who are currently running the bank, decide how many employees will be kept on, at drastically reduced wages and benefits.
It goes without saying that Hadjicostis will not allow any reduction in bank employees’ wages either and will bring back Vgen to save the B of C.

IF YOU had no deposits over 100 grand at the B of C, were not a shareholder and did not bank with it, you would feel some sympathy for the way it has been turned into the dumping ground for all the economy’s toxic problems.
First it was lumbered with Laiki’s €9.2 billion debt to the European Central bank (ECB). Why the ECB was not bailed in like everyone else, for unwisely lending billions to an insolvent bank for inadequate collateral, only the fascists of the troika can tell us. In addition, the B of C was told that Laiki’s collateral was inadequate and it would have to up the security for the debt that had nothing to do with it.
Second, as some kind of compensation it was given all Laiki’s operations in Kyproulla - the good and bad banks. Third, it was forced by the troika fascists to sell its operations in Greece for peanuts and the ruthless buyer, Piraeus Bank, is now - quite disgustingly - demanding it pays an even lower price, on some lame grounds.
Fourth, it was forced to take on all Laiki’s staff, which it will have to pay until a redundancy programme is put in place by A&M and then compensate them to leave. And fifth, our government also added to the B of C’s problems by exempting a range of deposits from a hair-cut, which means the haircut on the remaining uninsured depositors would be even bigger.
The only thing the government and the troika have not yet thought of doing is to give the B of C ownership of Cyprus Airways as well. It is as toxic as Laiki, so I would not rule it out.

DEPUTIES unable to engage in any form of populism these days have been persisting with their farcical witch-hunt aimed against people who had the sense to move their money out of Laiki and B of C before March 15 Eurogroup meeting.
The House ethics committee which has initiated this ridiculous campaign was informed this week that 6,000 people had moved money out of the two banks in the first 15 days of March. Had they all been tipped off by President Nik?
But 6,000 names were not enough for the ethical deputies. Now they want the names of the people who withdrew money from the beginning of the year. And what would they do once they have 10,000 names, considering these people/companies had done nothing illegal, unlawful or irregular?
They would serve society better if they demanded the names of all the children that were caught driving over the limit, but were not prosecuted because the AG does not like enforcing the law.

IF ANYONE wants to have a laugh during these depressing times I suggest they go to YouTube and type in ‘Bank of Cyprus adverts’. You will get an entertaining account, as long as you are a Greek speaker of how the once mighty bank was encouraging people to give it their money.
A classic is of a man at work and the solemn voiceover saying poetically, “For things you have worked hard for; for the late nights and stress; for those that support you (picture of family); for what will come. Safeguard your dreams with the deposit schemes of the Bank of Cyprus. The sure choice.”
A more appropriate ad for today, which could be described as prophetic when it was made in 2011, has a man arriving with a crate of olives to an olive press, telling the person in charge, “I came to deposit my olives. And when do I get my oil?” He is told he could have his oil in advance, in monthly instalments, at the end of the year ... “Deposit schemes from the Bank of Cyprus. We give value to your choices.”
The bank could re-run this ad soon, as payment in olives is certain to catch on.

HOWEVER, the advert that perfectly illustrates the folly and recklessness dates back to 2007 and features a sexy woman dancing ecstatically in the wilderness, in front of a standard lamp. The reason for the B of C customer’s joy was that she had just been give a housing loan plus “almost free insurance” plus money on her credit card to “spend on her house”. The gifts the bank was offering with housing loans amounted to €1300. Watch it and weep on http://www.youtube.com/watch?v=FyzXKa03kdA.
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