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CyBC still suffering 'sick building syndrome'

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Author: 
Jacqueline Agathocleous

THE CYPRUS Broadcasting Corporation (CyBC) may have taken some steps to improve the dire condition of its premises, but the problem has not yet been resolved, the Chairman of the House Health Committee said yesterday.

“Despite some efforts on behalf of the board of directors and workers to improve the unacceptable situation, which still exists in the CyBC today, none of the necessary improvements have been made to finally resolve the problems that the employees are facing at their workplace,” said DISY’s Costas Constantinou.

In June 2010, three CyBC employees were being treated for serious conditions – two of whom in London hospitals – with serious concerns being raised that their problems were related to the state broadcaster’s “sick building syndrome”.

Two of the cases were said to be extremely serious, with one female employee consigned to a wheelchair, while another had reportedly spent over €300,000 on treatments but to no avail. The illnesses in all three cases were believed to be brain-related. Another two employees later fell ill, despite efforts to rectify the problems with the building.

Even though the link to the CyBC buildings was not confirmed, the fact that the employees’ health problems were related and they all worked at the state broadcaster’s, strongly suggested they could be connected.

Constantinou yesterday said the CyBC management was attempting to play down the true dimensions of the problem.

However, CyBC chairman Makis Symeou yesterday said a series of measures were being taken to ensure workers were protected, until the corporation’s new updated building is finished.

But he did admit this was being delayed due to “technical problems of a financial nature”, as the CyBC’s funds were frozen earlier in the year.

“Once the funds are released, the architectural competition will be launched. Based on our plans, the new modern CyBC building, which will be built in the same area as the broadcaster’s current premises, will be finished in the next five years,” said Symeou.

Asked if he could guarantee that CyBC workers and visitors were completely safe health-wise, Symeou said he could so with facts, the results of regular lab tests and other such measures that were implemented.


CY given approval to hire consultants

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Author: 
Elias Hazou

LAWMAKERS yesterday gave the thumbs-up to Cyprus Airways’ (CY) choice of consultants charged with drafting a restructuring plan whose objective is to turn the ailing company into a competitive carrier.

A viable plan was a condition set by parliament before it releases the second tranche of a €31 million share capital increase and would have to be approved by lawmakers before it can be implemented.

With the approval of the House Finance Committee, the airline can go ahead and award the contract to AirFrance-KLM Consulting.

The company was selected from a list of six that included Lufthansa Consulting, KPMG, ICF SH&E, Feuerherd Aviation and Lowdexx Aviation.

The consultants’ brief includes reviews of CY’s management structure, its business model, and determination of personnel requirements and remuneration levels.

The plan must also make the airline attractive to any strategic investor wishing to acquire a majority stake in CY.

The national carrier posted a €32.1 million loss in the first half of the year as passenger and cargo revenues dwindled.

Deputy chairman of the House Finance Committee Angelos Votsis (DIKO) said legislators hope the restructuring plan will be delivered by October 29.

In response to reporters’ questions, he said the main criterion for selection was not the lowest bid, but rather the contractor’s expertise and know-how.

Air France-KLM submitted the fourth lowest bid at €226,175 plus expenses. Under the tender the expenses must not exceed 15 per cent of the initial quoted price.

It’s possible that in the meantime the airline, in consultation with the Finance Ministry, may go ahead with some redundancies even before the rescue plan is implemented, Votsis said.

The brief does not include supervising the actual implementation of the plan; for that, CY will be inviting a new round of tenders.

Commenting on this, Greens MP George Perdikis said the contract should have included the implementation part: “Rescue plans are a dime a dozen. Many have been drafted, many have been implemented, but unfortunately they were implemented wrongly, and here are the results.

“Had earlier plans been implemented correctly, today Cyprus Airways would not have a large number of excess personnel. Previous plans should have removed all the fat from Cyprus Airways,” he remarked.

Facebook app allows power comparisons

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Author: 
Poly Pantelides

FIND OUT how much electricity you consume compared to your friends, those in your neighbourhood, or even your district with Facebook application ‘Social Electricity’, which uses data from the Electricity Authority of Cyprus (EAC) to help people save energy.

“The goal is to help Cypriots understand their electricity consumption by comparing it to their friends’ equivalent consumption and the total consumption in their neighbourhood, street, village or district,” said the application’s creator Andreas Kamilaris.

The University of Cyprus, where Kamilaris is a PhD student, has teamed up with the EAC.

All of the data used comes from the EAC, which provides anonymous consumption data on a two-monthly basis for domestic usage on Cyprus’ streets.

Users input their post code to register (but can keep their street name private) so they can compare their friends’ consumption on a map of the island, check most and least consuming areas in districts and neighbourhoods, and compare statistics. 

“Consumers can only understand what their energy consumption means by effective and realistic comparisons,” Kamilaris said.

Take a street in the Nicosia municipality of Engomi for example.

On that street, consumption over two months varies between 2902kWh and 860kWh with an average of 1881kWh or €473.88. 

The application assumes all household units use the EAC’s standard domestic tariff.

A sidebar menu option, called Red Areas pulls up the most energy hungry areas in Nicosia, among them Engomi.

Among the Green Areas is the neighbouring municipality of Ayios Dhometios whose residents consume less on average than most Nicosia areas. 

Users can compare energy use with their neighbourhood streets as well as their friends. 

To keep data representative, 10 per cent of homes have been excluded because they represent new or occasional users whose consumption data can be misleading. 

The application also claims that small streets with six residences or fewer have been excluded to ensure the privacy of homeowners.

The EAC’s data pertains to the May-June period this year.

The application is still new and Kamilaris has asked Facebook users to use the application to help evaluate it but also to help consumers become aware of how much energy they use. 

It is available in Greek and English. 

Social Electricity won an international competition this year by the UN’s International Telecommunications Union. 

The application works on Macs and most commonly used Windows systems, and requires a Facebook account.

Go to http://apps.facebook.com/socialelectricity to find out more or email socialelectricity@cs.ucy.ac.cy 

'How I found out my son had died at Mari'

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Author: 
Poly Pantelides

AN EMOTIONAL Larnaca district fire chief told the court during his expert testimony yesterday about how he found out his son was among the six fire fighters killed in the 2011 Mari blast.

Fire chief Michalis Theofilou testified during the trial of six men – former ministers, army and fire officials – who are facing charges relating to events leading up to the munitions explosion at the Evangelos Florakis naval base.

Seven sailors and six fire fighters were killed, among them fire fighter Panayiotis Theofilou, Michalis Theofilou’s son.

Michalis Theofilou – who was a station master at the time - was asked to report for duty around half an hour after the blast, at around 6.30am. 

The news reported that people had died and his son was not answering his phone, which was out of character, he said. Theofilou was among those responding to the incident with the disaster response squad EMAK. But when he called EMAK, no one would say what happened.

Theofilou tried Larnaca general hospital but did not find his son so he went to the station, where he discovered his son had driven the response vehicle earlier that morning.

Theofilou then went to the naval base where his son had gone, and asked some officers in a room whether his son was dead but no one responded, Theofilou said. Among those officers was one of the accused, deputy fire chief Charalambos Charalambous.

Theofilou stepped outside and found the assistant fire chief at the time crying, but he also would not respond to the question of where Theofilou’s son was.

Theofilou then asked if all six fire fighters were dead, and the man told him they were.

Another officer then approached him shouting: “They are all to blame, they should all quit”.  Theofilou said he then tried to get to the scene but there was a lot of debris and he couldn’t get any further, so he got out of his car and walked. From a distance, he saw that the vehicle his son had been driving was crushed, and he saw sheets placed over bodies.

“I did not go closer [but] went back to the car and told the driver, let’s go to the station, I want to go home,” Theofilou said.

Theofilou was not testifying as a victim’s father but as an expert in handling fires involving chemicals and explosives.

He had earlier testified in that capacity and spoke of how he found out his son had passed away because the prosecution had asked him to. 

Though Theofilou said he was able to carry on, the defence asked the court to call it a day, asking for more time to prepare.

The munitions at Mari had been exposed for over two years, in 98 stacked containers, confiscated by the state from a vessel going to Syria from Iran as per UN sanctions.

Theofilou said that an emergency response guidebook – used as reference in Cyprus and available in electronic and paper versions in all fire stations – states that in the case of a munitions’ fire, everyone including fire fighters should keep a safety distance of at least 1.6km. 

This is to protect people from flying debris, he said.  He said also that normal fire extinguishing methods should not be used. 

Those safety precautions were not followed on the day of the blast. 

“The key to dealing with a serious incident is being informed,” said Theofilou who is also suing the state for over €2 million in damages.

The defendants in the Mari trial are former foreign minister Marcos Kyprianou, former defence minister Costas Papacostas, former National Guard deputy chief Savvas Argyrou, former fire service chief Andreas Nicolaou, deputy fire chief Charalambos Charalambous and former disaster response squad (EMAK) commander Andreas Loizides.

They are accused of causing death by want of precaution, and homicide by gross negligence in relation to the 13 deaths.

The trial continues today.

Culture capital face off

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Author: 
Jacqueline Agathocleous

THE MOMENT of truth has arrived: who will be crowned Europe’ Capital of Culture 2017, Paphos or Nicosia?

After visiting both cities on Wednesday and yesterday, the 13-member committee of EU experts is expected to make a decision today.

Both mayors were yesterday optimistic that their intensive efforts would finally pay off.

Nicosia Mayor Constantinos Yiorkadjis’ proposal is to use culture to promote efforts for residents in the capital – of all nationalities and religions – to become more accepting of each other. He said the aim was to help Nicosia reshape its future.

“Nicosia does not have the luxury of exploiting the rich tourist industry potential, nor the critical space to build airports or golf courses,” Yiorkadjis told the Cyprus Mail.

So he said the capital’s economic revival had come to depend on cultural tourism.

“Building the infrastructure to make that possible is a matter of life or death for the city,” said Yiorkadjis.

“Our advantage (over Paphos) is our proposal, which talks of reshaping our future,” he added. “We need to change how people perceive each other. Our vision is to help people accept the different and help them see each other as the different side of the same coin. We hope that by helping people to overcome their personal buffer zones we will change the way they think, and by doing so, we will change our future.”

Yiorkadjis said culture was the vehicle towards achieving this goal. “Culture provides the platform for the contact, the cooperation, the dialogue, the co-development of new ideas and participation, through which people will come to know each other, trust each other a little more and change their perceptions of each other.”

He said this was what made Nicosia’s proposal so different.

“We are using culture as a spark to ignite an integration project that will lead to social inclusion, cohesion and inclusive growth,” said Yiorkadjis. “We view culture as a great unifier; the common denominator that resolves the paradoxes of the city’s geography and helps towards social cohesion.”

Paphos Mayor Savvas Vergas said he was very optimistic that his town would win the bid.

“We embarked on this dream journey a year and a half ago; we now have 24 hours left for the result,” said Vergas, who added that the town had stepped up efforts over recent months. 

“Our difference with Nicosia is that all organisations, clubs, bodies and residents in Paphos got involved. All events in the summer were under the auspices of Paphos ’17,” said Vergas.

The mayor said the town’s key proposal was the idea of an Open Air Factory, which calls for cultural events to take place in open areas, like parks. “This seems to have caught the attention of the committee (of EU experts).”

Vergas added, “As mayor of the town, I am very optimistic. We are a town that provides culture all year round, we have ancient culture and character, and we are a town that wants this very, very much”.

The two town’s delegations will have one final meeting with the EU committee today at lunchtime, before the final decision is announced at an Education Ministry event later in the day.

In December last year, Nicosia and Paphos were selected to fight it out for the title, outbidding the third candidate city Limassol.

The city to host the European Capital of Culture is expected to be ratified in May 2013 by the Council of Ministers of the EU. 

A Danish city will also be designated as European Capital of Culture in 2017, along with the winning candidate city from Cyprus.

The idea of designating a Capital of Culture every year started in 1985, upon the initiative of former Greek Minister of Culture Melina Mercouri. The aim was to celebrate the cultural links that bring Europeans together and form a European citizenship. Athens was the first city to become Europe’s Capital of Culture.

Popular Bank state aid wins EU regulatory approval

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CYPRUS Popular Bank gained EU regulatory approval yesterday for €1.8 billion in rescue capital granted by the Cypriot authorities to ensure its financial stability.

The European Commission said it was giving approval for the scheme for a period of six months, but that Cyprus would need to present a restructuring plan for the bank during that time.

"The Commission found the measure to be in line with EU state aid rules because it is limited to the minimum necessary and provides safeguards to minimise distortions of competition," the executive Commission, which acts as state aid regulator in the European Union, said in a statement.

Cyprus became a majority shareholder in the bank through underwriting a share issue earlier this year.  

CB boss hopes bailout agreed soon

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CENTRAL Bank Governor Panicos Demetriades said he hopes Cyprus will agree on a bailout with its lenders as soon as possible, though he does not expect it to happen this month.

The island applied for financial assistance in June, but has not yet come to an agreement with its lenders on the conditions of the bailout, is still unknown.

The application was prompted by the need to recapitalise the Popular Bank, the island’s second-biggest, which took a hammering due to its exposure to Greece. 

Popular needed €1.8 billion, which the cash-strapped state did not have and could not raise from international markets due to the high yields on its bonds.

The biggest bank, Bank of Cyprus subsequently sought a €500 million state injection, despite initially saying it only needed €200 million, which it would have raised from private funds.

In July, Demetriades told lawmakers that the banking sector may need €12 billion euros in external aid. But in an interview with Bloomberg, published yesterday, he said it would be premature to talk about numbers “because we have to wait for the completion of the diagnostic check by independent assessors.”

“What we need to do in the euro area is decouple sovereign risk from bank risk,” Demetriades said. “For countries like Cyprus with large banking systems, it is particularly important. A central bank has to have powers. That’s critical for monetary union. I don’t see that as a danger.” 

According to Bloomberg, the EU on Wednesday unveiled proposals that would give the European Central Bank oversight of all eurozone banks. 

The central bank would become the top-level supervisor, with powers including the ability to fine non-compliant banks, issue banking licenses and instruct lenders to carry out stress tests.

Though the government has always been quick to point out that it was the banks that forced Cyprus to seek a bailout, it is certain that several billion euros would also be necessary to shore up public finances.

The bailout will certainly come with strings attached.

Demetriades said he hopes one will be agreed “as soon as possible,” though he didn’t expect it to happen this month.

The lenders, the so-called troika, tabled a series of suggestions at the end of July, which call for cuts in the state payroll and other structural changes and austerity measures, which are not particularly welcome.

The government says it is trying to avert the severity of austerity measures that have crippled Greece and is currently trying to put together a counterproposal.

State scrambles to finish its own economic plan

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Author: 
George Psyllides

THE government has almost finished drafting its own austerity package, its spokesman said yesterday, as parties and unions voiced their opposition to measures proposed by Cyprus’ lenders.

“The biggest part of this work has been already done through successive meetings and we are now heading towards the end,” Stefanos Stefanou said.

On Wednesday, Web-based InBusinessNews published a list of measures proposed by the troika, including a 15 per cent cut in the state payroll by 2013 and scrapping wage indexation (CoLA) and 13th salaries in the wider public sector.

They also propose cutting 13th pensions of between €1,000 and €1,500 by 50 per cent, and those over €1,500 by 75 per cent, taxing allowances in the public sector, extending a wage freeze until the end of 2015, and introducing pension contributions for all public servants.

The troika, a collective of the IMF, the ECB and the European Commission, presented their draft proposals at the end of their second mission in July. 

A new round of consultations is expected to take place later this month or in October.

Stefanou said the government will negotiate hard for a balanced support programme, which “does not abolish workers’ rights and creates prospects for the economy by investing in growth.”  

He said the programme should be based on financial consolidation, growth and social cohesion.

“This policy is promoted and enforced through our package,” Stefanou said.

The spokesman also rejected opposition criticism that the administration has left political parties in the dark.

Stefanou said the government chose to prepare a comprehensive package, present it to the parties and the unions with the aim of finding common ground and if possible, to reach an agreement.

Main opposition DISY did not comment on the measures but they repeated their call to President Demetris Christofias to call a party leaders’ meeting immediately with a view to ironing out a joint action plan “which we would all pledge to promote and enforce.”

DISY spokesman Haris Georgiades said responsible negotiation is not done in public.

“Leaks concerning such a critical matter increase the people’s insecurity and uncertainty,” Georgiades said, accusing the government of being unable to tackle the economic problems it created with its policies.

DISY’s cautious stance was not emulated by EDEK and DIKO which rejected the troika’s proposals.

EDEK MP Nicos Nicolaides said they have no official information on the proposals, as he rejected the measures that were published on Wednesday. 

“We want the loan to get out of the crisis and not sink deeper,” Nicolaides said. “It is obvious we cannot accept these measures.”

DIKO’s response was similar: “We will not accept a memorandum of tough austerity … that harms social cohesion,” spokesman Fotis Fotiou said.

The rejection from unions, which in the past resisted smaller changes, did not come as a surprise.

“Our approach is that there are proposed measures, which we need to discuss,” left-wing PEO said. “But there are measures which are unacceptable and will suffocate the economy.” 


Our view: Reported troika measures seem to be reasonable and logical

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NOBODY knows who leaked the document containing the troika’s proposed measures for the Cyprus economy, but whoever it was has performed a useful service. Now people do not have to rely on speculative reports by newspapers or alarmist revelations by pro-government politicians who believed that demonising the troika was a national duty. 

And the government can no longer mislead the public with claims that the troika had only submitted some ‘ideas’ and that consultations were ongoing. As the document showed, very specific proposals were made on how to cut spending and increase state revenue, exposing the wishful thinking of our politicians about the troika funds being used for development and growth.

Predictably, political parties reacted angrily to the measures, describing them as harsh, but what did they expect? Did they seriously think that we would be loaned five to 10 billion euro to spend without making the spending cuts that would enable us to repay the loans? Would Cyprus have been the first country in the world to be bailed out without the lenders setting any conditions?

Under the circumstances, the measures proposed by the troika are not too harsh. If anything they are quite reasonable and nothing more than any person who knows a few things about economics would have expected, given the state of public finances. We all agree that the state payroll needs to be reduced and this could only be done through pay cuts. 

The troika suggested a four-year wage freeze, non payment of the 13th salary for four years, abolition of CoLA, scrapping of allowances paid to state officials and the payment of monthly contributions by public employees towards their pensions. It also suggested the abolition of a range of untargeted benefits as well as bonus welfare payments. To increase revenue, it proposed a small increase to VAT and increases of taxes on petrol, tobacco and alcohol.

The measures were kept simple so they would be easy to implement and their effects would be immediate. Workers in the private sector would not be affected apart from losing out on CoLA – a good thing for the economy – making a mockery of the government’s rhetoric about defending the ‘conquests of the workers’. And it is only fair that cuts would be restricted to the public sector, which is the root cause for the bankruptcy of the state.

Nobody knows what President Christofias plans to do, but on Wednesday night he told a group of civil servants that “we will not manage without sacrifices,” thus indicating that he was finally coming to terms with reality. How long it would take him to take a decision, however, is another matter. 

Troika leaves no stone unturned

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Author: 
Elias Hazou

AS EU finance ministers began converging on the island for crucial debt crisis talks, fresh details emerged of a 20-page draft calling for sweeping changes to Cyprus’ imploding pensions system, privatisation of certain semi-governmental organisations, tighter budgetary controls in the broader public sector and labour market reform.

Last night President Demetris Christofias met briefly with IMF Managing Director Christine Lagarde, here attending the Eurogroup and the informal economic and financial affairs council (ECOFIN) taking place today and tomorrow. 

Speaking after the meeting Christofias said Lagarde listened “with understanding” to the government’s views on the terms of a bailout.

Asked when Cyprus would sign a bailout deal, Christofias said: “When we are ready.”

Meanwhile, web-based ‘InBusinessNews’ yesterday published a follow-up on the troika’s proposed austerity measures for Cyprus, whose overriding objective is to slash the public deficit to 4 per cent of GDP by the end of this year, and to 2.5 per cent by 2013, enabling the island to balance its books by 2015.

The draft was submitted to the government late July at the end of the troika’s second fact-finding mission here.

It proposes pension reform that would bring civil servants’ retirement plans in line with those of the private sector, and cuts to those pensions that are above the national average.

On the banks – the immediate cause behind Cyprus’ request for a bailout – the troika proposes that all financial institutions on the island should come under a single supervisory body and be subject to the same regulations. Currently, cooperatives fall under the ‘umbrella’ of the Commerce Ministry, not the Central Bank.

The troika calls for legislation enabling banks to sell property held as collateral against loans deemed non-performing for a maximum period of one-and-a-half years.

It also wants to alter the definition of non-performing loans (NPLs) so that it includes loans that have not been serviced in 90 days but are fully secure. Currently, Cyprus banks do not count these as NPLs. Recalculating NPLs could significantly increase the bailout amount needed by the banks.

International lenders also call for a due diligence report covering up to 75 per cent of the total assets held by Cypriot banks, as well as periodic stress tests.

And in a bid to buttress banks’ capital adequacy, the troika proposes raising the Core Tier 1 capital ratio from 8 per cent currently to 10 per cent by the end of next year.

The document leaves almost no stone unturned, zeroing in on the social security fund (SSF) among others. It calls for a new actuarial study into the viability of the fund, raising retirement age and linking this to life expectancy, and for civil servants to pay into the SSF.

Moreover the leaked draft calls for the enactment of legislation making the balancing of budgets mandatory, the establishment of an independent body to administer the public debt, and the complete privatisation of some SGOs such as Cyprus Airways and partial privatisation of others like the Cyprus Telecommunications Authority.

It further advocates scrapping wage indexation in the private sector as well as in the public sector, altering the method used to calculate the minimum wage, and opening up so-called ‘closed’ professions such as law, engineering, architecture and real estate.

In the health sector, Cyprus’ international lenders propose enhanced controls to minimise wasteful expenditures, and an increase in contributions by those eligible for public health care.

A mix of spending cuts and revenue raising, the measures include, but are not limited to: a 15 per cent cut in the state payroll by 2013; scrapping of 13th salaries in the public sector; cutting 13th pensions of between €1,000 and €1,500 by 50 per cent, and those over €1,500 by 75 per cent; taxing allowances in the public sector; extending a wage freeze until the end of 2015; a rise in taxes of tobacco, cigarettes, alcohol and fuel; an across-the-board downsizing of the civil service; and abolishing the heating fuel allowance and reducing other allowances such as the Easter and Christmas bonuses.

A new round of consultations is expected to take place between the government and the troika later this month or October.

The austerity measures were leaked to the media amid mounting criticism that the administration is delaying the bailout request process for fear of the public backlash.  The government has been avoiding having to touch the public sector, especially with national elections looming next February.

Today Christofias will be receiving Jean-Claude Juncker, President of the group of eurozone Finance Ministers, and later Mario Draghi, President of the European Central Bank. Tomorrow he meets with European Economic and Monetary Affairs Commissioner Olli Rehn.

In Nicosia EU finance ministers will have their first chance to discuss the ECB’s new bond-buying programme and the outcome of a German court ruling on the eurozone's permanent bailout fund.

They will also discuss Spain and whether it will make a formal request for assistance beyond aid for its banks, Cyprus' need for help, and how Greece, Portugal and Ireland are faring in meeting their bailout obligations.

President Demetris Christofias greets IMF chief Christine Lagarde at the Presidential Palace last night

Greens decide to wait a little longer to pick a side in election

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Author: 
Jacqueline Agathocleous

THE GREEN Party will next month choose whether to back main opposition DISY’s Nicos Anastasiades or independent candidate Giorgos Lillikas in February’s presidential elections, it said yesterday.

The decision was made by the party’s political bureau, which convened yesterday to discuss the results of an internal referendum carried out last Sunday.

According to Greens’ spokeswoman, Eleni Chrysostomou, the party plans to hold meetings with the two candidates before announcing its final decision on November 4.

“In the meetings with Misters Lillikas and Anastasiades, further discussions will be held on the main political issues, such as the Cyprus problem and the economy, with special emphasis on the candidates’ positions on the memorandum,” said Chrysostomou, referring to the austerity measures to be negotiated with international lenders the troika.

Chrysostomou said the Greens also discussed the possibility of going it alone at the elections, but decided that this was not feasible. Meanwhile, the party yesterday said there was a serious issue of credibility in government-party relations.

She said this was due to “the continuing erratic policy followed by the government” in informing the parties, “on time, in depth and with validity”.

She said there had been rumours circulating that the troika – European Commission, European Central Bank and International Monetary Fund – already had the government’s formal austerity proposals and that the parties had been given mere drafts.

Chrysostomou said the party planned to take specific proposals to the parties’ meeting with the government on Monday to discuss the package.

She added that she was saddened by the fact that the government allowed the economy to hit rock bottom without being in a hurry to take necessary measures.

“Every day that goes by, our country is sinking deeper into recession and the forecasts are bleak,” said Chrysostomou. She added that Moody’s decision to cut the island’s bond rating on Tuesday only underlined how urgently corrective measures were needed.

“And then we have the International Monetary Fund’s predictions for unemployment rates to shoot up, for the recession to be extended, the social problems of poverty and unemployment to get worse, which only makes the future look even grimmer,” said Chrysostomou.

Cyprus faces crippling fines for landfill failures

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Author: 
Stefanos Evripidou

CYPRUS COULD face crippling fines for failing to get rid of the 60 landfill sites still in operation across the country, parliament heard yesterday. 

Interior Minister Eleni Mavrou yesterday briefed parliament on the situation regarding the pending closure of landfill sites and their replacement with waste management plants. 

Last June, the European Commission launched legal proceedings against Cyprus for failing to meet the relevant EU directive deadlines. Cyprus and Lithuania are the only countries that have failed to meet the directive’s requirements. 

As a result, Cyprus could face “huge sums” in penalties, said Mavrou.  

Some years ago, Greece was fined by the European Court of Justice (ECJ) €15,000 a day for failing to close a landfill site in Crete. More recently, the Court has been considering fines of up to €35,000 a day.   

Should the ECJ fine Cyprus the same for each landfill still in operation, the near-bankrupt island could be facing a fine of up to €1 million a day until it meets its EU obligations. 

According to Mavrou, if tenders are not invited before the end of the year for new waste management plants, then Cyprus also risks losing access to EU funding, which covers two thirds of the cost of the plants.

However, if the ball gets rolling before Cyprus is called before the ECJ, it will be in a better position to argue against the imposition of crippling fines.  

Assuming the tenders process starts before the end of the year, then Cyprus could possibly limit the number of penalties to cover only three or four landfills, as opposed to the 60 still in operation. This would still cost the cash-strapped country around €7-8m a year in penalties. 

Even if tenders are launched before the end of the year, contracts will not likely be signed until next April, meaning projects will not get completed until mid-2015. 

Mavrou put the delays down to endless dialogue and public presentations. She called for an end to dialogue with all interested stakeholders, saying now was the time for decisions. 

Teachers insulted by 'twisted' wage figures

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Author: 
Jacqueline Agathocleous

PRIMARY school teachers’ union POED slammed reports saying they were the third best paid among 34 states, describing the news as “criminal misinformation”.

The union was referring to coverage of the annual Eurydice Report on teachers’ pay across the EU and among other Eurydice members, which was released by the European Commission.

The report presented data showing that Cypriot teachers on the minimum wage ranked the seventh highest paid and those on the maximum salary the third best paid.

The head of POED, Filios Fylactou, yesterday said even though the comparative figures did indeed show Cypriot teachers were among the highest paid, other aspects of the report were not taken into account.

“For example, the fact that Cyprus is one of only two countries where teachers do not receive added benefits,” said Fylactou. “Or the fact that a German teacher may start off with a much higher basic salary – on top of the benefits – but get smaller wage increases. Also the working hours differ.”

He added: “When you isolate the numbers and interpret them like that, then the wrong impression is being sent out”.

In its announcement, POED condemned the “criminal misinformation and alteration of data”. “It is unacceptable, during such a sensitive time for Cyprus, for some to attempt to create wrong impressions of teachers.”

According to the report, Cypriot teachers’ minimum wage (€29,614) ranked seventh of the 34 countries, while the maximum salary - €64,839 – was the third highest, falling behind Luxemburg and Liechtenstein, with €110,132 and €85,210 respectively.

Luxemburg topped all the lists, with the average teacher’s annual salary reaching €86,745, though the cost of living there is considerably higher.

“It is a general admission that the specific report does not take into account non-statistical elements, such as the extent of preparation that goes in, the degree of difficulty faced in teaching in underdeveloped areas, and administrative demands,” said Fylactou.

“We demand respect for our members and state our readiness to take measures against the underhanded and dark acts against the teaching world.”

Teachers in Cyprus work at the most until 1.30pm and it is well known that many state teachers illegally provide afternoon lessons.

'Private and public workers should unite'

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Author: 
Jacqueline Agathocleous

THE PRIVATE and public sectors need to work together to fight against the unfair austerity measures being promoted by the government, and not battle against each other, the head of primary school teachers’ union POED said yesterday.

“We must not fall in this trap of going against each other; this is what they want. We need to be united,” Filios Fylactou told the Cyprus Mail, referring to the ever-increasing chasm between the two sectors.

“The problem with the public service is that every time there is an election period, the payroll increases by over 10 per cent, because it is a well known fact that parties sort their own out once elected to power,” said Fylactou.

He added that in a meeting with former finance minister Kikis Kazamias – who was appointed briefly by the government but resigned a few months later – POED was presented with official ministry data, which showed that the payroll always increased by around 10 per cent following presidential elections.

“These same people who drove us to this situation are now calling for us to pay the damage,” said Fylactou. “And then we have the banks, who again we are all being asked to pay to bail them out; private workers by losing their jobs, their 13th salaries and so on, and us by enduring cuts,” he added. “As this continues, the hole just gets bigger.”

Workers in the public sector, including school teachers, have been up in arms over recently-announced cuts in their salaries and benefits, as part of the government’s proposals to international lenders who have been invited to bail out the island’s economy. These were added to further cuts a year and a half ago.

However, as the recession really started to set in, the excessive privileges enjoyed by public servants started coming to the forefront – such as contributing half of what private workers did to the social security fund, yet enjoying almost double the pensions; the end-of-service one-off payment they receive from the state, with amounts reaching €100,000 or more.

A sense of resentment started building up among private workers, who started feeling the effects of the crisis a good two years before the public sector – with people being laid off, businesses closing down, 13th salaries not being paid out and pay freezes, and even cuts.

And with the new proposed measures, which among others call for a slew of new taxes to increase state revenue, things are only expected to get worse.

But Fylactou yesterday said the two should work together to fight what he called “this attack on the workers”.

"Things will only get worse for both the private and public sectors,” said Fylactou. “The only way to avoid this is if we all fight this battle together.”

He said the government was trying to fix decades of wrongdoing by politicians by getting the workers to pay.

“The problem is, we are all turning against each other. We should be united,” said Fylactou.

Apart from added taxes and VAT increases, the government’s counterproposals to international lenders, the troika – European Commission, European Central Bank and International Monetary Fund – include scaled pay cuts in the public sector, 9.0 per cent for those earning between €1,000 and €3,500, and by 11 per cent for salaries over €3,500.

As of 2014, civil servants will start contributing 5 per cent to their pension plans (up from 3 per cent) – compared to 6.8 per cent contributed each by private workers and employers.

The government’s plan envisages a virtual freeze on new hiring in the public sector, with a 4:1 ratio of retirements to new hires.  The number of people employed by the government is to be gradually slashed by some 5,000 over the next five years, including halving the number of temps.

Working hours will be reshuffled (from 8am to 3.30 pm) so as to bring them more in line with the private sector and in a bid to cut back on overtime pay – a major drain on the state payroll.

The benefits and allowances of senior state officials (such as the representation allowance), which thus far were tax-free, are to be taxed, while disincentives will also be put in place for early exit from the civil service, with those choosing early retirement paying a ‘penalty’.

Ankara under fire over Cyprus, and EU reforms

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THE European Commission has serious concerns about Turkey’s statements and its threats against the Cypriot EU presidency, Enlargement Commissioner Stefan Fule said yesterday.

Speaking at a news conference in Brussels, where he announced the Commission’s Enlargement Package for 2012, Fule said: “The Commission repeats its serious concerns about Turkey's statements and threats about the rotating Presidency of the Council of the European Union and calls on Turkey to fully respect the role of the Presidency of the Council”.

He described Turkey as a key country for the European Union considering its dynamic economy, strategic location and important regional role. “It is in our interest and Turkey's interest that accession negotiations regain their momentum”, he said.

Fule said the Commission recommended that work resume on negotiating chapters, interrupted in recent years because of a lack of consensus amongst member states. Fule was referring to the chapters which Cyprus and France have unilaterally frozen.

Replying to questions, Fule said the EU and Turkey had the power to put the accession negotiations back on track so that the EU continued to be a benchmark on Turkey’s reforms.

The Commission, in its report on Turkey said yesterday that progress towards the normalisation of Ankara’s relations with Cyprus was urgent and could provide new momentum to Turkey’s accession negotiations.

It stressed that concerns were growing regarding Turkey's lack of substantial progress towards fully meeting the political criteria, and the situation regarding fundamental rights on the ground remained a serious concern”. 

“Full implementation of the obligations under the Customs Union and progress towards normalisation of relations with Cyprus are urgent and could provide new momentum to accession negotiations,” the Commission said. Turkey does not recognise the current Cyprus EU presidency.

"The situation regarding the respect of fundamental rights on the ground continues to be the source of serious preoccupation," the Commission said.

Rights to liberty, security, fair trial and freedom of expression, assembly and association were of particular concern. As a consequence of government policies, it said, self-censorship by the media was increasingly widespread.

Turkey's EU Minister Egemen Bagis said the report had failed to be objective, ignored the expansion of rights for religious minorities and had criticised the judiciary too sweepingly.

"We are extremely disappointed with this year's EU progress report, especially the part on political criteria," he said.

The Commission criticised Ankara for poor cooperation with the EU in the second half of this year, as Cyprus has held the rotating presidency.

Fule said “the very next day that Turkey delivers on its commitment stemming from the Ankara Protocol the Commission would propose to the member states to make available the eight chapters which are frozen by consensual decision of the member states.

He furthermore said that Turkey's active support for the Positive Agenda and its European perspective remained essential and welcomed the commitment of the Turkish government to swiftly present the fourth judicial reform package which should address all the core issues which are presently affecting the exercise of freedom of expression in practice.

Accession negotiations with Turkey began in October 2005. Turkey has so far managed to open 13 of the 34 chapters. Only one chapter has opened and closed, the chapter on science.

In December 2006, due to the Turkish failure to apply to Cyprus the Additional Protocol to the Ankara Agreement, the European Council decided that eight relevant chapters would not be opened and no chapter would be provisionally closed until Turkey had fulfilled its commitment. 

The eight chapters are: Free Movement of Goods, Right of Establishment and Freedom to Provide Services, Financial Services, Agriculture and Rural Development, Fisheries, Transport Policy, Customs Union and External Relations.

In addition, France has frozen five other chapters, while Cyprus froze in December 2009 six other chapters.

The last time that a negotiating chapter opened was during the Spanish EU presidency in June 2010.

Three more chapters could open but the Commission believes they are too difficult for the current stage of negotiations, while Turkey believes that the cost of opening them is not affordable for now.


Over €3b in late payments lost in past 12 months

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BUSINESSES in Cyprus lost €3.3 billion in the last 12 months due to late payments in commercial transactions, creating a vicious cycle of debt that is hampering economic growth and competitiveness.  

A seminar hosted by the EU Commission Representation in Cyprus yesterday highlighted that the EU’s new directive on combating late payment in commercial transactions is expected to alleviate liquidity problems faced by small and medium-sized enterprises (SMEs) and boost their competitiveness at a time of unprecedented economic crisis in the EU.

According to the latest figures from the European Payment Index 2012 presented yesterday, the written-off debt suffered by Europe's businesses has grown to 2.8 per cent of total receivables, to reach the unprecedented level of €340billion. 

A total of €3.3 billion was lost in Cyprus in the past 12 months due to late payments, an increase of 50 per cent on payment loss in 2008, according to the same Index.

Head of the Commission Representation Georgios Markopouliotis said 57 per cent of European businesses claim to have liquidity problems due to late payments, an increase of 10 per cent since last year. 

Every day across Europe, dozens of SMEs go bankrupt as their invoices are not paid, he said, noting that in southern Europe business to business transactions are paid in 91 days time on average, while in northern countries it takes 31 days.

These practices harm the Single Market, aimed to offer businesses and entrepreneurs equal opportunities in all countries of the EU, said Markopouliotis.

He stressed that the directive is an important tool in order for SMEs, which account for 99 per cent of European companies and employ 67 per cent of the European workforce, to continue supporting the efforts for growth in the EU.

Commission deputy head for Enterprise and Industry Antti Peltomδki said the new directive will make available for businesses additional liquidity amounting to €180 billion per year. 

By incorporating the directive into national legal systems, member states will enhance growth and boost competitiveness, Peltomδki said, adding that late payments in commercial transactions are a major obstacle to the free movement of goods and services in the Union.

The Commerce Ministry’s Director of Industrial Development, Yiannis Kontos said SMEs suffering cash flow problems are forced to borrow at unaffordable interest rates, which in most cases lead to their decline, closure and inability to pay loans.

The late payment directive will put an end to overdue payments, help SMEs improve their liquidity and competitiveness and enhance healthy competition in the consumers’ interest, said Kontos.

Cyprus was the first EU member to transpose the EU directive into national law last July.

According to the directive, public authorities must pay for goods and services they procure within 30 days or, in very exceptional circumstances, within 60 days.

As far as business commercial transactions are concerned, enterprises should pay their invoices within 60 days, unless they expressly agree otherwise and if it is not grossly unfair to the creditor.

Enterprises are automatically entitled to claim interest for late payments and can obtain a minimum fixed amount of €40 as compensation for payment recovery costs. They can also claim compensation for all remaining reasonable recovery costs.

The statutory interest rate for late payment is increased to at least 8 percentage points above the European Central Bank’s reference rate. Public authorities are not allowed to fix an interest rate for late payment below this threshold. In Cyprus the interest rate for late payment has been set at 9 per cent.

Putting the squeeze on Swiss accounts

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Author: 
George Psyllides

THE government is trying to strike a deal with Switzerland that would enable it to tax deposits by Cypriots in Swiss banks, which reportedly exceed €100 million, it emerged yesterday.

Government spokesman Stefanos Stefanou said an agreement already exists concerning Cypriots with deposits in Switzerland.

“But we are interested to know, and tax, what capital there is in Switzerland. It is something we are working on,” the spokesman said without offering more details.

Reports said the cash, which exceeds €100 million, was taken out of Cyprus during the 1999-2000 stock market (CSE) bubble and the construction boom that followed.

It is understood that the current agreement – an EU directive -- provides for Switzerland to pay some form of compensation to Cyprus but apparently the government wants a stricter deal.

Under the current scheme, the tax is withheld at source and passed on to the EU country of residence without disclosing the holders’ names.

The government will try to strike an agreement that is similar to the one between Switzerland and the UK, reports said.

That deal includes a one-off tax ranging between 19 per cent and 34 per cent depending on how long the cash has been in the bank.

The 1999-2000 CSE fiasco saw thousands of people lose their life's savings by investing in bubble shares.

The market gained 688 per cent in 1999 as its capitalisation bulged to around €18 billion (CYP11 billion) at one point.

All those gains were wiped out a year later by a rash of new issues that drew a stampede of uninitiated investors on borrowed funds and led to a subsequent liquidity squeeze.

 Almost 12 years on, Cypriots continue to harbour a sense of injustice for the scandal that brought the CSE into disrepute and triggered a painful restructuring to regain investor confidence.

Woman killed after wind hurls crane onto car

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A WOMAN was killed last night and her husband injured in a freak weather accident when strong winds hurled a 50-metre crane onto a car driven by a couple on the popular Phinikoudes promenade in Larnaca. 

The 50-metre crane was located outside the Larnaca Municipality where it was being used to construct an additional two floors on top of the town hall. 

As the heavy rains and strong winds sweeping across the island reached Larnaca, the crane was seen last night twisting around as a result of the wind’s force. 

At around 8.15pm, the strong winds hurled the crane onto the ground. The 50-metre metal tower crashed onto two cars, one moving and one parked. 

According to reports, a British couple, permanently resident in Vrysoulles village, was inside the moving car when the crane landed. 

The acting chief of the Larnaca fire service, Marcos Trangolas, rushed three fire engines to the site and led the effort to free the couple who were trapped in their car by the crane.  

The fire service had to use the services of a private crane vehicle to lift the fallen crane while firefighters got the woman out of the car first, followed by her husband. 

According to Larnaca Press Agency, they both suffered injuries below their waist. 

Ambulances waiting on site took the couple to Larnaca general hospital where medical staff were waiting for them.  

However, the woman, reportedly 65 years of age, was declared dead soon after. Her husband was being treated for injuries. At the time of going to press, doctors at Larnaca hospital were not able to say what condition he was in. 

Our View: Indecision and procrastination have made a bad situation worse

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THE GOVERNMENT spokesman Stefanos Stefanou immediately seized the part about the banking sector, in Moody’s latest report downgrading Cyprus, in order to repeat the official message that the banks are to blame for economic meltdown. Stefanou almost adopted a triumphant tone, in referring to Moody’s observation that the public debt could be unsustainable because of the recapitalisation needs of the banks.

“Moody’s also note that even if measures are taken by the government it is doubtful the debt would be made viable,” said Stefanou before repeating the same old tune about the mistakes made by the bank boards and the inadequate regulations by the former Governor of the Central Bank. It is as if he was happy that the public debt would not be viable, because it would help the government’s propaganda.

Yet the truth was that Stefanou carried out a very selective reading of Moody’s report which also noted the government’s “slow response to its current grave fiscal difficulties” and its failure to act swiftly and decisively. It added that “the delays experienced in agreeing a package of fiscal and economic reforms with the troika illustrate institutional weaknesses founded on a lack of political consensus on the overall direction of fiscal and economic policy.” 

In short, government indecision and procrastination have made a bad situation much worse. Time is fast running out and the government has still not prepared all its counter-proposals for the troika which would reportedly return in the latter third of October, assuming the government is ready for it. The memorandum of understanding with the troika must be signed before the November 12 meeting of the Euro Group ministers who would have to approve it before it is ratified by national parliaments. If we miss the November 12 deadline, we would receive no money until next year.

So far we have not even decided among ourselves what shape it would finally take. President Christofias still has to meet union bosses, who are vehemently opposed to the government’s proposals, followed by the party leaders on Monday. And then it would also have to negotiate with the troika that is unlikely to agree to the government’s half-baked proposals focused on higher taxes.

There was at least one positive development yesterday. Stefanou repeatedly gave assurances that the president would sign a memorandum even if he did not secure the consensus of the unions. At least this was a step in the right direction, suggesting Christofias may have finally realised the gravity of the situation and that he can no longer put off decisions. We just hope there is enough time left to finalise a memorandum by early November. 

Cabinet approves €300m for new jobs

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Author: 
George Psyllides

THE government yesterday announced a €300 million stimulus package aimed at creating jobs and boosting the construction, housing and energy sectors.

The package, approved by the cabinet yesterday, will be funded by the proceeds of the second hydrocarbon licensing round and the European Investment Bank.

“It includes programmes to improve the potential of unemployed people to find work … (and) assistance to small and medium businesses (SMEs), the backbone of the Cypriot economy,” which are suffering due to lack of funding from banks, government spokesman Stefanos Stefanou said.

The package is also aimed at boosting construction, renewable energy sources, research and education.

The largest chunk, around €200 million will be funded by the proceeds the state expects to make from the second licensing round for offshore hydrocarbon exploration.

Some €100 million will also be secured from the European Investment Bank to support SMEs.

Stefanou said the government wants to roll out the measures as soon as possible.

In June, Cyprus became the fifth country in the 17-nation eurozone to seek international aid, when its banks needed state support to cover massive losses on their exposure to debt-crippled Greece.

Cyprus is in the process of ironing out an adjustment programme with its international lenders, the troika, who had submitted their recommendations at the end of July.

The government has since prepared its own counter-proposals and had said it would also draft measures aimed at boosting growth.

Stefanou said the troika programme effectively lacked stimulus measures.

The package will be given to the parties today, ahead of a meeting with the government on Monday.

The spokesman said no date has been set yet for negotiations to start with the troika.

“But we want to conclude as soon as possible and I emphasise that we can close the discussion and negotiation as soon as possible,” Stefanou said.

President Demetris Christofias will be meeting trade unions on Friday, as disagreements persist on reforming the wage indexation system CoLA.

Stefanou said if there is an agreement on CoLA, it would have a better chance of being accepted by the troika, which has proposed its abolishment.

However, an agreement on CoLA did not look likely yesterday, after employer organisations OEV and KEVE rejected a labour ministry proposal.

The two organisations decided that CoLA payments must be frozen for the duration of the adjustment period – expected to take between three and five years.

After that, payments should be made once a year, rather than twice, and any readjustment must be linked to an increase in productivity, growth and competitiveness.

“If there is no economic growth in the preceding year, the readjustment will not be made,” OEV and KEVE said.

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