THE PRESIDENT of the European Central Bank Mario Draghi was quick to come to the defence of Cyprus’ Central Bank Governor Panicos Demetriades. In a letter sent to President Nicos Anastasiades, Draghi warned that the Governor could only be dismissed on the grounds specified by EU law and even then the action would have to be reviewed by the EU’s court of justice.  

Anastasiades responded with a six-page letter, denying that any proceedings for the sacking of Demetriades had been undertaken but also listing some of the dubious policies implemented by him since he was appointed by the Christofias government last May. Demetriades’ has been responsible for many ill-conceived decisions that caused harm to the country, but his decision to carry on providing emergency liquidity assistance to the insolvent Laiki Bank was catastrophic and could be described as criminally negligent.

Should a Governor whose appallingly poor judgment has cost us billions, be kept in his position to cause more harm to the country because he has the support of the ECB president? And was Draghi not concerned that Cyprus has a Governor who was taking billions of ELA for an insolvent bank, without receiving adequate security from it, building up a debt in excess of €9.2 billion? Obviously not, as the ECB has arbitrarily passed on this debt to the Bank of Cyprus and demanded additional collateral from it to cover Demetriades’ blunders. We would have thought the ECB would have wanted him out, instead of standing by him and issuing warnings to the government.

Demetriades has also tried to turn opinion abroad against the government telling Bloomberg that the Governor’s independence was under attack. He told the news agency that there had been “constant interference in relation to the management of the banks under resolution,” which was a bit rich, considering how Demetriades had obeyed all the diktats of Christofias government without ever complaining that the Governor’s independence was being undermined. He publicly admitted that he carried on sanctioning ELA for Laiki because the previous government wanted any decision on the bank to wait until after the elections.

The Anastasiades government has been absolutely right to interfere for the very simple reason that the Governor has shown he cannot be trusted to take decisions that are in the best interest of the country. Was it not Demetriades who wanted to re-open the banks on the Tuesday after the first Eurogroup meeting? If the government had not prevented him from doing so there would have been a bank run that would have made things even worse.

Of course it should be said that he was merely following the instructions of the ECB, which, as Demetriades pointed out a couple of weeks ago, has full confidence in the Governor. President Anastasiades has every right to have no trust or confidence in a man who acts as the ECB’s loyal agent, because as events have shown the last thing the ECB is interested in is the good of the Cyprus economy.

BORNE aloft on the shoulders of eight military servicemen, the coffin of Margaret Thatcher was carried up the steps of London's main cathedral on Wednesday for a funeral service attended by  Queen Elizabeth, Britain's political elite, and global dignitaries.

In life, the woman the Soviet Union christened the "Iron Lady" divided the British public with her free-market policies which sometimes wrought wrenching change on communities. In death it is no different.

Thousands of supporters lined the streets of London as her casket made its final journey from the centre of British political power in Westminster to the service on top of a gun carriage draped in the red, white and blue British flag.

Most people clapped in respect but about two dozen opponents turned their backs on the procession.

One man held up a placard reading "Boo!" and some shouted "scum", while supporters threw flowers along the route and cheered for Britain's longest-serving prime minister of the 20th century.

Thatcher, who governed Britain from 1979 to 1990, died on April 8 after suffering a stroke.

Polls have shown that many are unhappy that the estimated 10-million ($15 million) pound bill for the ceremonial funeral is being picked up by the taxpayer, while some left-wing lawmakers say the pomp-filled event is excessive.

Honoured with a gun salute from the Tower of London every minute and the silencing of the Big Ben bell, British soldiers played Beethoven, Mendelssohn and Chopin to accompany the grandest funeral for a British politician since that of Thatcher's hero, Winston Churchill, in 1965.

"She was the first woman prime minister, she served for longer in the job than anyone for 150 years, she achieved some extraordinary things in her life," said Prime Minister David Cameron, leader of Thatcher's Conservative Party.

"What is happening today is absolutely fitting and right," he said, dismissing concerns by some Thatcher critics about the cost and pomp of the event.

A handwritten note placed on a wreath of white flowers on her coffin read: "Beloved mother - always in our hearts".

More than 700 armed forces personnel from units Thatcher led to victory in the 1982 Falklands War lined the streets. Police stood every 5-10 metres along the route.

People gathered along the funeral procession route early in the morning with placards that reflected a range of views.

"You gave millions of us hope, freedom, ambition," read a placard held up by one man, while a short distance away another man held one that read: "Over 10 million pounds of our money for a Tory funeral". Tory is another word for Conservative.

"This country was pretty well down on its knees in the seventies," said Roger Johnson, who stood in central London.

"Margaret Thatcher came along and sorted everything out. Her legacy is that she put the word "great" back into Great Britain," he said.

Her admirers, of which there are many in her party and in southern England, argue that she merits a funeral on a par with Churchill.

"Some people say she divided the country: but if she was so divisive, how did she win three elections?" said Joseph Afrane, 49, a security officer from south London, who wore a cowboy hat, jacket, shoes and even watch emblazoned with the British flag.

More than 2,300 mourners are attending including 11 serving prime ministers from around the world, the British government's entire cabinet, two heads of state and 17 foreign ministers.

But there were notable absences. Former Soviet leader Mikhail Gorbachev and Nancy Reagan, the widow of Thatcher's great US ally Ronald Reagan, are too frail to attend.

Thatcher struck up a close relationship with Reagan during the Cold War and was among the first to decide that Gorbachev was a man she could "do business with".

The guest list for her funeral has prompted talk of diplomatic snubs. A spokesman for Cameron denied the United States had snubbed Britain by not sending anyone senior from the administration of President Barack Obama.

The Argentinian ambassador refused to attend after Britain said it would not be inviting Argentina's President Cristina Fernandez, following a request from the Thatcher family, amid increased tensions over the contested Falkland Islands.

Relations between the two countries remain strained after the 1982 war over the South Atlantic islands which Thatcher ordered a task force to retake after Argentinian troops seized it.

Mourners at the funeral heard her favourite hymns, including "To Be a Pilgrim".

St Paul's, the 300-year-old cathedral where her funeral will take place, played host to the funerals of Nelson, the Duke of Wellington and Churchill as well as to the wedding of Prince Charles and Lady Diana Spencer.

The abiding domestic images of her premiership will remain those of conflict - huge police confrontations with mass ranks of coalminers whose year-long strike failed to save their pits and communities, Thatcher riding a tank in a white headscarf, and flames rising above Trafalgar Square in the riots over the deeply unpopular "poll tax" which contributed to her downfall.

But Cameron said that Thatcher's battles, particularly her crushing of trade unions that dramatically cut the number of days lost to strikes, had in fact reduced divisions.

"She was a bold politician who recognised the consensus was failing...She took tough and necessary decisions and in many ways created a new consensus...So in the end the breaking of the mould ... led to less division, less strife," he said.

Even Thatcher's critics concede that - for better or for ill - she transformed the face of Britain.

In 1979, when she came to power, Britain was in the grip of a long post-war decline with notoriously troubled labour relations, low productivity and was being outperformed by continental rivals France and Germany.

Data show she turned that around by boosting home ownership and the service industry, breaking the power of the unions, and deregulating financial services.

But the price - growing inequality and the closure of large swathes of the country's industrial base - left parts of the country struggling to create new jobs and rebuild decimated communities, leaving a bitter taste which endures.

FARMERS’ organisations protested yesterday against the purchase of types of imported goods Cyprus already produces, saying people should opt to buy local.

“During these troubled times it is a patriotic act to support Cypriot goods,” General-secretary of Farmers’ union EKA, Panicos Chambas said.

They said while importers were being paid in cash by supermarkets, Cypriot suppliers, who are owed millions, have been left unpaid. They said this was blow to the farming sector.

“We are appealing on the public, when they go shopping, to buy Cypriot goods,” Chambas said. 

The farmers urged the public to ‘turn their backs’ on foreign produce and not to be fooled by low prices set by middle-men who were working against their fellow countrymen and against Cypriot goods.

In a show of good faith, farmers gathered produce and handed them over to the Famagusta Metropolis to help the church continue its charitable work.

General-secretary of  farmers’ union Panagrotikou, Nectarios Karyos said the unions had written a letter to the relevant ministries, with suggestions on how to deal with the problems faced by the farming industry. 

“We are waiting for them to pass through a bill which will prioritise Cyprus produce,” he added. Karyos believes it is unethical and damaging to the farming industry and the economy in general that suppliers are using cash they have received from local supermarkets and grocery stores to purchase imported goods.

“I’d like to call on consumers to buy Cypriot produce as foreign produce is not natural, and can be unhealthy,” a protesting farmer said. 

“We ask the government to support us as we have not been paid for 3-4 months now and without their support we will not be able to survive,” he added.

The groups later travelled to the villages of Ormidia and Avgorou to assess the damage done to crops by the hailstorm on Tuesday night.

A 22-YEAR-OLD Limassol man was yesterday jailed for 15 years for killing his neighbour over the way he had parked his car.

Eleftherios Constantinou, who suffers from mental problems, stabbed Apostolis Athanasiou, 23, in November last year because the latter had parked his car outside his Kato Polemidia home.

After an exchange of words, the victim moved his car, but Constantinou came out with a knife and stabbed the 23-year-old in the heart and lungs.

The Limassol Criminal Court took the defendant’s mental state into account, but pointed out that he had not been complying with his doctors’ orders regarding his medicinal treatment.

After his arrest, police had said the defendant had been involved in similar incident in 2011. Constantinou had stabbed and injured a 48-year-old man under “similar circumstances”. 

After being examined by a psychiatrist, he was referred to Athalassa Psychiatric ward in Nicosia where he remained for some time.  That case was set to go to trial in March 2013.

After the November stabbing, the welfare services said they had taken all steps stipulated by the law

The case bears similarities to a murder that took place in Nicosia in January, 2012, when a 25-year-old man, who was also under the care of the welfare services, killed his sister following an argument over a laptop. He was sentenced to 12 years in jail in May.

FINANCE Minister Harris Georgiades said yesterday he anticipated the sale of part of the island’s gold reserves "during the next months", but the final decision rested with the Central Bank.

Cyprus has to sell some of its gold reserves to raise about €400 million to finance its part of a €10 billion euro EU/IMF bailout, according to an assessment of financing needs prepared by the European Commission.

The government confirmed last week that a sale of gold reserves was among the options for its contribution towards the rescue package.

"In the case of the gold, it's the board of the Central Bank. It's perfectly understandable. They have the final say," Georgiades said in an interview with Bloomberg TV. Georgiades did not elaborate on how much gold Cyprus might sell nor at what price.

Asked if the government had the support of the Central Bank to go ahead with the sale, Georgiades said: "It's something that will be examined soon, I hope."

A Central Bank spokeswoman said last week the sale of gold reserves was not presently on the board's agenda. 

Whether or not it happens, the Cyprus gold sale proposal opened the floodgates to the biggest drop in gold prices internationally in 30 years, and most experts failed to see the collapse coming.

A Reuters poll in January of 37 banking analysts and consultants forecast another year or two of average record highs for gold, after 12 years of unbroken annual average gains from a spot low of around $250 per ounce.

A long list of banks forecast gold would average more than  $1,800 per ounce, up from $1,668 in 2012. They included ANZ, BNP Paribas, Bank of America/Merrill Lynch, Deutsche Bank, Commerzbank, Macquarie, Morgan Stanley, Standard Chartered and Goldman Sachs. Only one, National Australia Bank, predicted below $1,600.

And even though banks had started back-pedalling on those forecasts, most still favoured the fundamental case for holding gold as an alternative currency and hedge against inflation. And then came Cyprus.

On the same day as the news broke, last Wednesday, gold fell 1.6 per cent, but appeared to stabilise the following day before plummeting around 5.2 per cent and 8.4 per cent last Friday and Monday, respectively, as selling triggered more selling - the biggest two-day move in 30 years.

Having cratered to $1,321/oz on Tuesday, bullion was priced near $1,380 yesterday, having started Friday above $1,560.

Investors in gold-backed exchange-traded funds in particular have exited in hordes.

"I don't think anyone thought we'd see the enormous move and volume of selling that we did see. It's done a great deal of damage to investors' confidence," said Sean Corrigan, chief investment strategist at Diapason Commodities Management in Switzerland.

The scale of the decline suggested gold's reputation as an alternative store of value has been undermined.

Those who remain constructive on the metal's future say the official sector - central banks - are still keen buyers of gold, and its usefulness as a liquid store of value in difficult times is indeed demonstrated by the Cyprus proposal.

"The body language of central banks doesn't seem on the whole to be sellers," Deutsche Bank analyst Daniel Brebner said.

"I'm doubtful that gold's role would be seriously strained by these three days of extreme volatility. I think there will be certainly a number of institutions that will rethink the wisdom of using gold as an investment, but time will tell if gold is truly a barbarous relic."

The sale of gold falls under the Central Bank

A RULING party bill that puts a halt on public sector promotions was yesterday rejected by unions which suggested it will not yield any significant savings but it will create operational problems.

DISY deputy chairman Averof Neophytou, who tabled the proposal, said the objective was to send a message of social justice, as unemployment – currently close 15 per cent -- could double in the next year. 

The bill could affect around 1,000 vacant positions in the public service.

The House Finance Committee heard that under current legislation, it would be impossible not to give a promotion without a pay rise.

Pay increases have been frozen in the public sector, as was recruitment, in en effort to shore up the island’s economy on the brink of collapse. 

No figures were given concerning the potential savings.

Committee chairman Nicolas Papadopoulos said that most unions had expressed their readiness to discuss alternative solutions such as promotions without the accompanying pay increase or returning the money to the state in the form of a contribution.

PASYDY, the union of central government workers, said structural problems would not be solved if promotions were frozen.

The union’s senior secretary Andreas Louka also suggested that it would be wrong to pass the bill but exempt certain sectors.

Such sectors could be the armed forces and the police whose representatives asked to be exempted due to the nature of their duties.

“If we do not want a National Guard just say so,” one army official said. “The army needs a hierarchy to function,” he added, warning lawmakers that it would deal a blow to morale.

Police officers too want to be exempted, claiming that a freeze in promotions would essentially break up the force.

Unsurprisingly, teachers also strongly opposed the bill, suggesting it will hurt education.

Responding to criticism by the head of the secondary education teachers’ union, Neophytou said when it came to educators, promotions also entailed less working hours.

AN ELECTRICITY Authority of Cyprus (EAC) machine operator who risked his life to save an amateur fisherman from drowning a month ago was yesterday awarded in Parliament for his valour and altruism. 

The modest ceremony took place in the House President’s office, on the initiative of the Friends of Police association, to honour Stelios Stylianou, a 48-year-old father of three who saved the life of Giorgos Georgiou on the morning of March 16. 

Stelios Stylianou was working his shift on the Saturday morning at the EAC’s Vassilikos power station in Mari when,  at around 11.30am his shift manager, Christos Paparistodemou, rushed in the control room saying he had received word that a man was in trouble in the stormy waters, unable to get to safety. It was a windy day and the sea was choppy, Stylianou told the Cyprus Mail during a telephone interview yesterday.

The fisherman, Giorgos Georgiou, was spotted by a worker at the nearby desalination plant who called the shift manager at Vassilikos to inform him. Stylianou remembers his shift manager saying: “We can’t let this man die”.

“I’ve been swimming in the sea every evening for about a year and a half now for three hours every day. I believed I had the strength to take this man out of there,” Stylianou said. 

After the event, there was criticism by some about a family-man risking his life, and about him being allowed to jump in the choppy waters before official help had arrived. 

But at the time and later in retrospect Stylianou said it was an acceptable risk given his daily swimming routine and his ease in the water. 

Decision made to go in himself and not wait for help to arrive, Stylianou ran to the beach and stripped to his underwear. Spotting the fisherman some 300m or 400m off the shore and judging from his lack of movement that he needed to get to him as soon as possible, Stylianou did not wait for the gates to the fenced-off beach to open, but jumped over it.

“I didn’t even feel the cold, I was pumped with adrenaline,” Stylianou said. 

As Stylianou tried to reach the fisherman, people were trying to get through to authorities and get help. The Vassilikos power station had its own ambulance waiting for them, with a trained member of staff. Georgiou – the fisherman – had been in the water for over three hours by that time, and Stylianou remembered his orders to keep the man awake at all costs. 

While in the water, with Stylianou dragging him to safety, Georgiou’s speech was distorted but he had enough strength to plead with Stylianou to keep moving.  According to the met office, sea temperatures of 16-17 degrees Celsius is low enough to pose a risk after a few hours because water conducts heat away from the body faster than air does. 

Georgiou later told his saviour that he had been ready to give up “and sink to the bottom of the sea”. Although a strong swimmer himself, Georgiou’s fishing boat had capsized too fast and despite his efforts, he could not take off his heavy clothing, which had weighed him down further as he tried to swim to shore. As a thank you, Georgiou later gave Stylianou a crucifix which was handed down to him by his mother

The media – engrossed in unfolding drama over a Cyprus bailout deal and deposits’ haircuts on March 16 – missed the story altogether with the exception of daily Haravghi, which reported it around a week after the event. 

 “I was just happy with what I did,” Stylianou said, adding that he was happy to get a mention from his shift manager that will go on his permanent record, and to be congratulated by the police.

After a few weeks, when the commotion with the bailout that had kept everyone so fixated on other news subsided, the Friends of Police proposed an award ceremony. Yesterday EAC and police brass awarded Stylianou for his valour in the presence of his family and of Georgiou whose life he saved. 

“As long as there are people like Mr Stylianou, then despite the country’s difficulties there is hope that we will recover, that not everything is lost,” said House President Yiannakis Omirou.

“The dignity, selflessness and humanity that characterises our people have been subject to no haircut and no cutbacks,”  he added.

Stelios Stylianou (centre) with his youngest child and the rest of his family yesterday. The man he saved is on his right

THE €10 billion aid deal to save Cyprus from bankruptcy has been thrown into fresh uncertainty with news that the island’s  fractious parliament will vote on the final package.

The surprise vote has only just been scheduled, and early signs are that nearly half the members of the 56-seat parliament may oppose the bailout, seen as vital to keep Cyprus in the euro zone.

The Greens Party said yesterday its sole parliamentarian would vote to reject the deal, becoming the first party to announce its intentions.

However, the Communist AKEL and Socialist EDEK parties, which together have 24 seats, have been vocal in their opposition to the bailout, and are seen as likely to vote against, although there is some chance they may abstain instead.

"We've fought for freedom, we've fought to maintain the Cypriot Republic," Greens MP George Perdikis said in statement.

"It is, in my opinion, a crime and wrong to deliver Cyprus into the hands of the troika and allow it to become a colony," he said, referring to the country's European Union, European Central Bank and International Monetary Fund lenders.

The parliament shocked Europe by voting unanimously in March against an initial bailout plan which featured controversial demands that bank depositors including small savers should have funds seized to pay towards the cost.

The final version of the bailout agreed with the European Union and International Monetary Fund, forced massive losses on big depositors in the island's two major commercial banks, triggering economic turmoil likely to sink the country deeper into recession.

The deal, which still requires ratification by parliaments in some EU member states, must also be put to Cyprus's parliament for a vote - a previously unscheduled plan - according to Attorney general, Petros Clerides.

"Whoever is prepared to vote against the loan agreement should at the same time propose where this €10 billion will be found," government spokesman Christos Stylianides told state radio yesterday.

“They should also propose how we would deal with issues such as paying wages and pensions, and how we would deal with the international uproar caused by a possible rejection of the loan agreement," he said.

The bailout agreement was expected to be put to the assembly at the end of the month, once it has been approved by the cabinet, parliament's acting permanent secretary, Socrates Socratous, told Reuters yesterday.

Ruling DISY, and coalition partner DIKO, even if their parliamentary votes are combined, will fall short of a majority.

"It's time to face this critical situation for the salvation of our country and everyone needs to take responsibility," said  DISY’s Lefteris Christoforou.

SOME sections of this society will never learn. Despite everything Cyprus has been through over the past month, and everything that is yet to come, semi-government organisations (SGOs) still want to have their cake and eat it at the expense of everyone else.

On Monday,  the Cyprus Telecommunications Authority (Cyta) and Cyprus Ports Authority (CPA) criticised the troika’s demands to come up with €1.4 billion through SGO privatisations, saying they believed they  could use their own resources to cover the amount demanded by the troika as part of Cyprus’ bailout agreement.

Cyta chairman Stathis Kittis said Cyta and other SGOs could commit themselves to pooling resources to come up with a certain amount every year in order to collect over the next eight to ten years up to €2 billion to cover the €1.4 billion requested by the troika from privatisations. This was echoed by CPA chairman Chrysis Prentzas.

What they seem to fail to understand here is that as far as the troika is concerned, privatisations are a must for Cyprus, not just about selling them off to raise money but because they are bloated, inefficient and endemic of the ‘me, me, me’ culture that pervades the public service in general. It’s hard to forget how much was budgeted for chairs for EAC Paphos staff.   

The MoU with the troika clearly states that international lenders want Cyprus’ SGOs to conform to international best practices.

What these SGOs did not exactly make clear to deputies on Monday was how they were going to come up with the €1.4 billion that would allow them to remain untouched by the troika. 

In the case of Cyta, the CPA, and also the EAC, the only way to make more money is off the backs of consumers and businesses. Essentially they want us to pay for them to carry on working in the style to which they have become accustomed. 

They might argue the consumer/taxpayer would not be affected but judging by a telling incident last week, it is clear what they think about the people who have been carrying them all these years. 

Limassol dock workers rejected a proposal for a 50 per cent cut of their 14th salaries.  Really? Does anyone in the private sector even remember what a 13th salary looks like, let alone a 14th?  If these people are not willing to give up half of half a month’s salary, which is a perk in the first place, what hope is there? 

The MoU also provides for scaled salary cuts in the public service from 0.8 per cent up to 2.0 per cent for the highest paid.  In the private sector people are taking salary cuts of up to 40 per cent in some cases. 

There are a lot of bitter pills to swallow in the bailout deal but the privatisation of the SGOs has got to be the least painful for the majority of the Cypriot population.  The SGOs need to come back down to earth, preferably with a bang.

ANGRY European lawmakers yesterday roundly condemned the handling of the Cyprus bailout programme, blaming the Eurogroup for its appalling communications, the Commission for not defending insured depositors, and some member states for their “colonial” approach to addressing eurozone troubles.

During a debate in the European Parliament (EP) on the Cyprus bailout, MEPs accused the Commission and its troika partners, the IMF and European Central Bank (ECB), of creating a “fiasco” and “disaster”, with much wider implications than Cyprus.   One went as far as to call for the disbanding of the troika. 

Taking the floor to open the debate, EU Commissioner for Economic Affairs Olli Rehn said the Commission would have preferred a more gradual adjustment for Cyprus but since member states were only committing €10bn this was not possible. 

“This (financial) constraint severely limited the options available,” he said. He went on to say that it was time to stop the blame game. Rehn acknowledged that the Cyprus agreement had been “very difficult, and not without mistakes”. 

He argued that the Cypriot authorities, member states and EU institutions had to find unique solutions to exceptional problems.  “They had to do so without previously tested instruments and – in the final stages of negotiations – under enormous time pressure.” 

Two key lessons can be learnt from the process, he said. “First, there must be absolute clarity about secured deposits. In this respect, the Eurogroup and Cyprus took rapid corrective action and underlined that secured deposits indeed are secured in Europe.”

Rehn failed to mention that it was the Cypriot parliament that rejected the Eurogroup’s initial decision to tax all depositors big and small, forcing a second all-night meeting which led the eurozone finance ministers to change their position. 

“Second, the developments in Cyprus demonstrate the reasons why a Banking Union is a necessary element of a true European Monetary Union. We need a well-functioning Single Supervisory Mechanism with a single rulebook to prevent the emergence of an unsustainable banking sector like in Cyprus,” said Rehn. 

The EU commissioner noted that Cyprus’ problems-mainly an oversized banking sector- built up over many years. Poor practices in risk management heightened the banks’ problems while a lack of “adequate oversight” allowed the two largest Cypriot banks to build up “by far too concentrated risk exposures”. 

The Commission had alerted Cyprus on its problems as early as May 2011, he said.

“Then, in November 2011, we communicated to the Cypriot authorities that a financial assistance programme would be unavoidable, unless the persistent economic problems were immediately addressed.

Eventually, Cyprus asked for financial assistance, but only in June 2012.” 

Following half a year of talks, a draft agreement was reached with the Cypriot government. 

Given the financial constraint of a €10bn bailout, despite Cyprus’ needs being larger, the scenario of more gradual economic adjustments for Cyprus was not on the cards anymore, argued Rehn. 

It soon became clear that Laiki had to be resolved immediately: “The risk of a complete collapse of the entire banking system – and thus a sweeping loss of deposits and savings and a disorderly default of the sovereign – was indeed very real.”

In his address, the Commissioner avoided comment on the decision to transfer Laiki’s €9 billion-plus debt to the ECB on to the restructured Bank of Cyprus, leaving its prospects of survival shaky.  

Rehn- standing in for Commission President Jose Manuel Barroso who attended Margaret Thatcher’s funeral- then received a barrage of criticism from MEPs as the debate got into full swing. 

Head of the Socialists and Democrats group, Austrian MEP Hannes Swoboda called on the Commission to disband the troika.

He told Rehn: “You are responsible to this parliament, the troika is not, stop the troika - we don't need it.”

He added: “You know how they treated the elected president of Cyprus? And their rude behaviour to the elected representatives of Cyprus? It's not acceptable.

“The Commission needs to help the people of Cyprus not dominate them. There has been a lack of transparency in the Commission's actions,” he said.

Swoboda criticised the Council and more particularly Germany for behaving in a “near colonial way”.  

French MEP Jean-Paul Gauzes from the centre-right EPP (European People’s Party) said the Eurogroup's “poor communications” and behaviour resulted in a “fiasco”. 

He accused the EU of not effectively intervening “to limit risks that were foreseeable” while also blamed Cypriot banks for having built up too much risk.

Belgian MEP and head of the Alliance of Liberals and Democrats Guy Verhofstadt said it was essential to find out exactly what went wrong. He described the EU’s handling of Cyprus “a disaster”. 

“It gives the impression that Europe is failing – what’s failing is the bad inter-governmental system we have today,” he said. 

The Liberals head criticised the way the Eurogroup took bailout decisions, “meeting at the end of the week, under pressure of the Monday opening of markets”. 

Verhofstadt also questioned where the idea to impose a haircut on EU-guaranteed deposits of under €100,000 came from. 

“Cyprus is proof a mechanism needs to be put in place and not use a case-by-case approach. Who proposed a levy on all deposits? It was the worst idea ever.”

He said the ECB, troika and Eurogroup President Jeroen Dijsselbloem had difficult questions to answer. If these answers were not forthcoming then the EP should set up a committee of inquiry, said Verhofstadt.

AKEL MEP of the European United Left, Takis Hadjigeorgiou, whose party was in power when a draft agreement was reached with the troika last November, accused the EPP of double standards, with support for the Cypriot cause given within the EP but not within the Eurogroup. He also criticised the Commission for ignoring the people’s representatives and imposing measures on Cyprus which it would never apply to larger countries. 

“In difficult times there was no solidarity…would the Eurogroup do it for bigger states?” he asked. 

The Cypriot MEP added that once Cyprus manages to get back on its feet again it will look into leaving the EU.

The Eurogroup decision on Cyprus was “an assassination of the Cypriot financial sector,” equivalent to killing off the German car industry, he argued.

DISY MEP Eleni Theocharous expressed Cypriot people’s disappointment with the perceived lack of EU solidarity shown towards Cyprus. 

While mistakes were made within Cyprus, the fatal blow dished out to the financial sector and treatment of the troika towards Cypriot citizens was unacceptable, she argued.

Theocharous accused ECB chief Mario Draghi of green-lighting €10bn in liquidity to Laiki (Popular) Bank through emergency liquidity assistance without any restrictions, adding that it is not the depositors who should foot the bill for this.

Greens MEP Daniel Cohn-Bendit said the real solution for Cyprus was to reunite the island in order to unleash growth potential and investment.

European Conservatives and Reformists’ Jan Zahradil from the Czech Republic said the real problem was much wider than what was happening in Cyprus. He said Cyprus was being used as an excuse to attack national fiscal sovereignty.

Leader of the UK Independence Party (UKIP) Nigel Farage accused the Commission of criminal behaviour, robbing people to prop up the euro project. No one has confidence in the euro, said the co-chair of the Europe of Freedom & Democracy group.

“Never could have imagined that the troika would have resorted to the level of common criminals by taking people’s money” and particularly from small investors, he said.

Farage called the Cyprus crisis “the death knell of the euro”. 

“A precedent has been set and you can see how the Eurogroup plan to deal with other bailouts,” he said. 

“The message to investors, loud and clear, is get your money out of the eurozone before they come and get it. The European Union is the new communism,” said Farage.

Non-attached Laurence Stassen from the Netherlands who hails from Geert Wilders’ Party for Freedom said the only solution for Cyprus was to leave the eurozone. She added that the Netherlands should not be paying out further for the country.

Members of the Group of European United Left of the European Parliament hold posters with the slogan "Hands off Cyprus, Portugal, Greece, Spain, Ireland" during the debate (R)

An explosion tore through a fertilizer plant and leveled dozens of homes in a small Texas town late on Wednesday, killing a number of people, injuring more than 160 and spewing toxic fumes that forced the evacuation of half the community.

Officials declined to say how many people died in the explosion in the town of West but said they expected to find more bodies as search teams combed through the rubble of the plant and surrounding homes.

"I've never seen anything like this," McLennan County Sheriff Parnell McNamara said. "It looks like a war zone with all the debris."

The blast, triggered by a fire at the West Fertilizer Co. plant, was reported at about 8 p.m. CDT (0100 GMT on Thursday) in West, a town of about 2,800 people about 80 miles (130 km) south of Dallas and 20 miles (32 km) north of Waco.

The cause of the fire was unknown, officials said. Waco police Sergeant W. Patrick Swanton said investigators would examine whether the blaze originated from "criminal activity or whether it ... got sparked from some type of chemical reaction".

"We do have confirmed fatalities," Texas Public Safety Department spokesman D.L. Wilson told a news conference early on Thursday, about four hours after the explosion. "The number is not current yet. It could go up by the minute."

West Mayor Tommy Muska told Reuters that five or six volunteer firefighters who were among the first on the scene were missing.

Officials said flames that continued to smolder inside the plant posed two threats - the possibility of setting off further explosions and the emission of hazardous fumes into the town.

Swanton said a residual fire burning underneath additional chemical tanks had been brought under control "and I don't think that is any longer a threat".

Wilson said about half the town, about eight to 10 blocks, had been evacuated and that "we might even have to evacuate on the other side of town" if winds shift overnight as expected.

Firefighters had been battling a fire at plant and evacuating nearby residences and a nursing home for about 50 minutes before the blast occurred.

CNN reported that at least two people had been killed, but that figure could not be independently confirmed.

Wilson said 50 to 75 homes were damaged by the explosion and a fire that followed, and that a nearby 50-unit apartment complex had been reduced to "a skeleton standing up." Muska put the number of destroyed homes at between 60 and 80.

Wilson said 133 people had been evacuated from the nursing home, which was heavily damaged, but it was not immediately clear how many residents of the facility were hurt.

Three hospitals in Waco and Dallas were receiving the bulk of patients from the disaster. "We are seeing a lot of lacerations and orthopedic-type injuries ... things you would expect in an explosion," said David Argueta, vice president of operations at Hillcrest Baptist Medical Center in Waco.

U.S. Representative Bill Flores, whose district includes West, said he doubted any foul play was involved. "I would not expect sabotage by any stretch of the imagination," he told CNN.

Video footage showed a large fire burning at the scene before exploding into a fireball. The blast produced ground motion equivalent to that of a magnitude 2.1 earthquake, according to the U.S. Geological Survey.

A middle school and several homes were severely burned. Dallas television station WFAA reported from helicopters that a three-block area of West appeared to have been flattened.

The air in town remained thick with smoke hours after the explosion, and the area around the blast site was littered with shards of wood, bricks and glass.

Jason Shelton, 33, a father of two who lives less than a mile (1.6 km) from the plant, said he heard fire trucks heading toward the facility five minutes before the explosion, and felt the concussion from the blast as he stood on his front porch.

"My windows started rattling and my kids screaming," Shelton told Reuters. "The screen door hit me in the forehead ... and all the screens blew off my windows."

Governor Rick Perry issued a statement saying his office had "mobilized state resources to help local authorities" deal with the incident.

A White House official said the Obama administration was aware of the situation and monitoring local and state response through the Federal Emergency Management Agency. 

The remains of a fertilizer plant burn after an explosion at the plant in the town of West, near Waco, Texas early on April 18, 2013

Germany's lower house of parliament voted overwhelmingly on Thursday in favour of a bailout for Cyprus.

Of the 602 lawmakers in the Bundestag who voted on the €10 billion rescue, 487 backed it, while 102 opposed it and 13 abstained.

Earlier, Finance Minister Wolfgang Schaeuble urged German lawmakers to approve the bailout, warning that Cyprus posed a systemic risk.

"Step by step we are winning back confidence. If you look at the markets, there is still nervousness and uncertainty. But it is considerably less that three years, two years or one year ago," Schaeuble said in his speech.

"The aid for Cyprus secures the successes we've already achieved in the eurozone. We must prevent the problems in Cyprus from unleashing new problems in other eurozone countries."

He added that if Cyprus were allowed to go bankrupt, there was a "significant risk" of contagion to Greece and other vulnerable eurozone member states.

Responding to Schaeuble, the leader of the centre-left Social Democrats in parliament Frank-Walter Steinmeier said his party would support the bailout, but attacked the government for initially backing a plan to hit small savers in Cypriot banks.

That proposal was scrapped after a major backlash and the new bailout only hits people with deposits over €100,000.

"Mr. Schaeuble, whether you asked for this or simply joined others in supporting it, it was a huge mistake. It stoked fear and insecurity in Europe," said Steinmeier.

German Chancellor Angela Merkel (C) casts her vote

TO MARK International DNA Day on April 25, The Cyprus Institute of Neurology and Genetics (CING) announced ten of its most important achievements in the last year, including the discovery that Cypriot women are more susceptible to breast cancer if they do not follow the Mediterranean diet. 

The research for this discovery was done by Professor Kyriacos Kyriacou and was published in the Biomed Central Cancer magazine.

“2013 marks the 60th anniversary of the discovery of the double helix of DNA by James Watson and Francis Crick and the 10th anniversary of the first sequencing of the human genome,” chief executive Medical Director, Professor Philippos Patsalis said. 

International DNA Day commemorates the day in 1953 when James Watson, Francis Crick, Maurice Wilkins, Rosalind Franklin and colleagues published papers in the journal Nature on the structure of DNA. On the same day in 2003 it was declared that the Human Genome Project was very close to completion.

The Human Genome Project was the international, collaborative research programme whose goal was the complete mapping and understanding of all the genes of human beings. All our genes together are known as our "genome".

Patsalis went on to reveal the other major discoveries the institute had made including the start of gene therapy to cure inherent neuropathy and encephalopathy with the use of virus’ that can replace the missing genes. The study was developed by Professor Kleopa Kleopa. 

“Dr. Savvas Papacosta and his team worked on pain relief for Parkinson’s Disease sufferers. They completed the first two operations in Cyprus to implant electrodes into the brain to combat pain which cannot usually be cured with the use of pharmaceuticals,” Patsalis said.

A team of doctors headed by Dr Marios Pantzari have internationally patented a pharmaceutical supplement which helps battle multiple sclerosis, with their research published in the British Medical Journal.

“Dr. Marina Kleanthous team applied a prenatal cure for the prevention of thalassaemia by replacing faulty genes with genes taken from the mother’s umbilical cord of a previously born child. They also managed to apply the non-operational diagnosis of thalassaemia in pregnant women,” Patsalis added. Their work was published in the European Journal of Human Genetics. 

By using the molecular technique, array-CGH, Dr. Carolina Sismani’s team managed to detect chromosomal defects in unborn children, proving more effective than pathological diagnosis of such defects. Biomedical Research International published their work.

Professor Leonidas Fylaktou’s research team found genes in the blood linked with muscle degeneration that are linked to muscular dystrophy. This discovery will help doctors diagnose the problems earlier and will help sufferers deal with it more effectively. 

A team from the department of neurogenetics headed by Professor Kyproulla Christodoulou have recently finished a study on Charcot-Marie-Tooth syndrome, which is a genetic disorder of the peripheral nervous system characterised by progressive loss of muscle tissue and touch sensation across various parts of the body. Their research on the incurable syndrome was published in the European Journal of Medical Genetics.

Patsalis’ team recently finished their clinical trial on non-invasive the prenatal diagnosis of Down’s Syndrome, with 175 cases and almost a 100 per cent success rate. Their work was published in Prenatal Diagnosis and Nature Medicine.

“Only through better knowledge will we be able to make quick and exact diagnoses to prevent or radically cure the diseases which are the scourge of mankind,” he concluded.

A REFUGEE who left behind his wife and four children in Syria was driven to suicide on Wednesday, in what migrant support group KISA said was just another example of the inability of Cypriot authorities to respond to desperate calls for help. 

Mohammed, a Kurdish resident of Syria, fled from Syrian authorities and sought asylum in Cyprus some three months ago. He lived in the Paphos village of Arodes and was given the run-around by the labour office and the social welfare department, KISA said. 

“What seems to have led the unfortunate refugee to suicide was the heartlessness to which Cypriot authorities responded to his desperate call for help, but also his intense worry for his life and his family’s fate,” KISA said.

Asylum seekers do not have access to the labour market for the first six months of their stay in Cyprus, but are instead entitled to benefits, according to KISA’s information guide to asylum seekers. After six months in the country, they are allowed to work in farming and agriculture. 

But KISA said some people have to wait for months to receive benefits payments because of Parliament’s “racist decision” to examine the list of refugees receiving benefits, including those whose asylum applications have been accepted.

The migrant support group said Mohammed’s suicide was indicative of the situation for refugees and asylum seekers in Cyprus, especially the Syrians who are often forced to flee their country and “are the most vulnerable of all social groups in (Cyprus)”.

The state is making it increasingly hard for people to obtain asylum in Cyprus, KISA said, claiming that the authorities try in various ways, not all of them legal, to prevent assigning people with asylum status. 

People such as Mohammed become isolated, humiliated, and desperate, KISA said.

Many are eventually forced to leave to seek protection in other countries in Europe, KISA said. 

KISA said they understood the financial and social situation in Cyprus, but said that democracy and human rights was in danger from racism and discrimination splitting groups into two: Cypriots and all others. 

The government has been looking into switching from giving financial help to handing out goods to asylum seekers. From spending €23.5 million in 2010, the state spent €10 million in 2011 for asylum seekers and people protected for political or humanitarian reasons.

Asylum applications have been dropping steadily over the years. Between 2002 and 2012, some 25,500 people have had their asylum applications rejected in Cyprus and there are currently about 1,300 people with pending asylum appeals before the reviewing authority, according to the UN refugee agency, UNCHR.  Cyprus’ university of technology, TEPAK, and Enoros Consulting have launched a psychological and social support programme for asylum seekers and those entitled to humanitarian protection. The project is funded by the government and the European Commission’s refugee fund. For more information call during the week, between 8am and 5pm at the following numbers: Nicosia, 99-299497; Limassol and Paphos, 25-002300; Larnaca and Famagusta, 99-119235. 

THE ISLAND’S tax authorities will begin contacting people hired between 1999 and 2004 by the Cyprus Sports Organisation (KOA) as they attempt to recoup around €200,000 in unpaid taxes. 

KOA paid the individuals between CYP£200 and CYP£300 a month depending on their travel costs but never declared it to the taxman. 

“KOA had the responsibility of paying income tax on travel expenses between 1999 and 2004 for people not on the organisations books, although it was merely an oversight and not done knowingly,” KOA accountant and deputy-head Vassos Koutsiountas said.

He told the Cyprus Mail that individuals were hired by KOA to visit clubs that had received sponsorship from the organisation to ensure the money was not squandered elsewhere, and were compensated for their travel expenses, although Koutsiountas revealed that the majority had full-time jobs elsewhere.

“The tax authorities contacted us and informed us that they were owed around €200,000 in pay-as-you-earn income tax from KOA, which had covered travel expenses for certain people,” he said. “The amount of money is still outstanding from those persons involved and tax authorities will be contacting each individual in their attempts to recoup the amount,” he added. 

Koutsiountas explained that despite reports in the local media, KOA had not initiated legal action against anyone. He said that KOA had changed its procedures since 2004 and had begun paying income tax on travel expenses, deducting it from the salaries it was paying.

This appears only to be the tip of the iceberg as sources within KOA were more scathing of the Organisation’s policies regarding the hiring of already employed personnel. Wanting to maintain their anonymity, the source revealed that knowingly, KOA has been hiring civil servants who were employed elsewhere. 

“KOA is a Semi-Governmental Organisation (SGO) and knows the law regarding civil servants and that they can only have one job but still proceeded in giving high-ranking jobs to people who were already working in the government,” he said. He revealed that there is a high level of back-scratching going on within the organisation with one case in particular seeing an inspector from the education ministry receiving a large salary from KOA also. 

“With the vast numbers of unemployed, KOA could have easily hired someone to fill positions within the organisation but because of the relationship of certain high-ranking individuals with others within the government, they decided to give big salaries to people who were already well-paid,” he added. “They knowingly broke the law when they could have chosen to give jobs to unemployed individuals,” he concluded.

THE ECONOMIC crisis will force some parents to remove their children from private schools while new enrollments are expected to drop.

Many private schools are offering discounts and renegotiating fee payment structures in an attempt to stem the flow. 

Even the island’s most famous fee-paying school, The English School in Nicosia, is “facing vast economic difficulties”, according to Andreas Lordos, a member of the board of governors. 

A recent letter from the parents association to The English School board and headmaster urged the board to press for a reduction in fees.

“Certain measures must be taken now to provide the necessary support to parents that will enable them to continue to send their children to the English School next year. We have been the recipients of numerous letters and phone calls requesting your immediate actions as regards reductions in school fees,” the letter said.

The English School’s chairman Antonis Valanides was more upbeat, saying it was too soon to tell if parents would have problems paying tuition fees next year. “Students have already taken the entrance exam and classes have been organised. Up until now we have not heard of parents who are thinking of taking their children out of the school,” he said.

But he added the school had allowed an extension for fees to be paid. “Fees that should have been paid by the end of March can now be paid at the end of April,” he said.

The Pascal English School was one of the first private schools to announce the reduction of fees due to the economic crisis. 

“The school will offer a reduction of €2,000 for students who will enter the first class next year and this reduction will continue until they graduate,” said Pantelis Andreou, executive chairman of the Pascal English School.

“If parents are having problems paying fees, we will offer them a ten per cent discount for the school year,” he added.

Despite the discounts, Andreou said he did expect the number of new enrollments to fall as a result of the crisis.

A teacher at another private school in Nicosia, who did not wished to be named, said their school did not have actual figures yet for registrations for next year but many parents were thinking of taking their children to public schools because they cannot pay the fees. 

“Students have not left during the year, but we have heard that parents with two children in the school will be removing the youngest. Students who are towards finishing school are more likely to stay on and their younger siblings will be taken out,” said the teacher.

Emilios Hadjipetris, director of the GC School of Careers said that his school is also taking measures to help parents with any financial difficulties. 

“We will give an increased discount to families that have more than one child in the school. Also, we will deduct some extra charges from certain subjects such as, science,” he said.

Chairman of the Junior School and Senior School board Nick Papandreou said the board is currently reviewing what they can do to reduce school fees. 

“We have to be wise about how we will reduce fees as we are a non profit organisation. It is a balancing act situation as any cuts we make to the school budget will have an effect on the students and may reduce their learning experience,” Papandreou said.

The school was hit particularly hard as it had deposits of above 100,000 euros in Laiki Bank and was originally subject to a haircut under the terms of the island’s bailout.

The government has said educational institutions were to be exempt from the haircut but, according to Papandreou, the school has received no confirmation of this.

At tertiary level, the future of private education is less bleak, though universities are still taking precautions.

Fees for private universities in Cyprus are not cheap, averaging around €9,000 per year (though some charge as little as €6,000). Universities in Britain, for example, charge only a little more, £9,000 or €10,500. But the cost of rents and other living expenses pushes the overall bill for those studying abroad much higher, and this is to the advantage of local private universities.

“Before they would send them to a university abroad without going over the budget in detail but now this will all change. Many students will prefer to stay in Cyprus because the overall expenses are cheaper,” said managing director of the European University Cyprus, Christoforos Hadjikyriacou.

He said fees at the university have stayed the same for the last four years but in response to the crisis, the university board is to meet and discuss how fees could be reduced or paid in smaller intervals.

PRESIDENT Nicos Anastasiades is today likely to announce his government’s formal policy decision to press ahead with the construction of a liquefied natural gas (LNG) plant on the island.

Sources told the Mail the decision was taken at a cabinet meeting on Wednesday, but was not immediately made known as the President intended to announce it today along with a raft of planned measures designed to jumpstart the economy.

A decision for an LNG facility had been taken by the previous administration of Demetris Christofias; the current DISY-led administration was understood to also support the project, but an official announcement was pending.

A clear commitment from the government would now allow US energy firm Noble Energy to move forward with plans to extract the gas from its offshore licence and declare commerciality on the project.

If Noble deems the project commercially viable – following appraisal drilling slated for this summer - it will undertake the cost of the subsea infrastructures (including the pipeline) to bring the gas ashore. However it all hinges on the existence of an LNG plant, which will process and store the gas for export. The LNG plant itself is to be financed by the government and other partners.

Officials say natural gas could be brought ashore for domestic consumption in late 2018, and for exports in 2019.

Earlier this week, a senior executive with Noble Energy said one option being considered by the company was to channel through Cyprus the gas to be extracted from Israel’s massive Leviathan prospect. 

Gerald Peereboom, Director of LNG development at Noble Energy, made the comments at the ‘LNG 17’ gas conference held in Houston, Texas.

Israel is yet to decide its gas export policy, and there is opposition by environmental groups there against an LNG facility. At the same time, the recent thaw in Turkish-Israeli relations has seen increased talk of a gas pipeline connecting the two countries.

Speaking at an energy conference in Limassol yesterday, Charles Ellinas, the chairman of the Cyprus National Hydrocarbons Company (CNHC), said that by 2025 the island could generate 25 million tonnes of LNG a year, covering nearly 50 per cent of the EU’s additional energy needs and making Cyprus an important player on the global energy market.

The two-day Annual Cypriot-Greek Oil & Gas 2013 Summit is organised by International Research Networks. The conference is discussing all aspects of hydrocarbon exploration of both Greece and Cyprus.

THE viability of the Bank of Cyprus (BoC), the island’s biggest, is a national priority, new ruling DISY leader Averof Neophytou said yesterday, as he called for the immediate appointment of a board to oversee the lender’s restructuring following a Eurogroup decision to impose hefty losses on its uninsured depositors.

The Cypriot economy’s salvation goes through the rescue of BoC, Neophytou said.

“Everyone must understand this. The new BoC, after the merger with Laiki, has a local share that exceeds 60 per cent,” Neophytou said.

The majority of businesses were BoC customers, he said, adding that the absence of a leadership at the lender had cost the economy a lot.

The lender’s board and CEO had resigned and an administrator was appointed after a Eurogroup decision to impose a haircut on deposits over €100,000 to pay for the BoC’s recapitalisation.

The decision also called for winding down Laiki, Cyprus’ second biggest, with certain assets to be taken over by BoC.

The Central Bank had said that the administrator would only be in place for several days but it has now been several weeks with the rate of the haircut has not been decided yet.

Uninsured deposits in BoC – over €100,000 – currently face a €37.5 per cent cut although an additional 22.5 per cent, which have been frozen, could also suffer the same fate.

Of the remainder, the CBC has only released 10 per cent.

The government had decided to exempt various entities from the scheme, such as municipalities, charities, schools, and insurance companies, but Finance Minister Harris Georgiades told parliament recently that the list would be reviewed.

Various groups have also demanded their provident funds be exempted.

Officials have warned that more exemptions would mean a deeper haircut on deposits.

If the state wanted to exempt certain entities “we have the humble opinion that it should not do so at the expense of depositors at Laiki and BoC,” Neophytou said. “It is unfair for depositors in the two banks to be saddled with additional burdens. For every €100 million exempted, you add (a loss of) 1.0 per cent on BoC depositors.”

Neophytou said he understood the systemic nature of insurance companies and the workers’ concerns over their provident funds, but “I think it is socially unjust to put our hand deeper in the pocket of depositors.”

Cyprus introduced curbs on money movements when banks reopened on March 28 after a two-week shutdown while the government negotiated a €10 billion bailout from the International Monetary Fund and the European Union.

Its capital controls are a first for the eurozone, introduced in an effort to prevent a cash drain.

Neophytou said restrictions must be lifted as soon as possible because the market was near paralysis.

He said BoC could be protected while controls were lifted in the rest of the sector.

The new DISY leader cautioned other banks to refrain from taking advantage of the BoC’s predicament.

“They should forget that it is the time for them to increase their (market) share,” Neophytou said. “They too must respect and support the BoC.”

CITING what appeared to be a technicality, former Laiki strongman Andreas Vgenopoulos failed to show up in a Paphos court yesterday to answer charges that he had misled investors into buying high-risk securities.

Vgenopoulos and former Laiki CEO Efthimios Bouloutas, both Greek nationals, argued through their lawyers that the charge sheet had not been delivered to them in the correct manner.

Their lawyers raised a pre-trial objection suggesting that the papers had been delivered under the provisions of the Schengen Agreement, which Cyprus had not ratified.

Joining Schengen entails eliminating internal border controls with the other Schengen members, while simultaneously strengthening external border controls with non-Schengen states.

The island’s division is the reason why Cyprus has not yet joined Schengen.

Claiming he was defrauded of €108,000, a Paphos-based man has filed a private criminal case against the Laiki as a legal entity, the bank’s former brass, and former Central Bank (CBC) governor, Athanasios Orphanides.

The plaintiff’s lawyer countered that the summons had not been delivered under the provisions of the Schengen Agreement but in accordance with a relevant bilateral agreement between Greece and Cyprus.

The Paphos district court is expected to issue its decision on the matter on Monday.

Three other Laiki officials named in the suit were scheduled to appear in court on May 16.

Former CBC governor Orphanides has not yet received a summons.

The plaintiff, Stavros Mavrosavvas, is one of hundreds of depositors who claim they were misled by the banks into putting their savings in high-yield securities.

Mavrosavvas claims the defendants had falsely stated that the securities would fetch high-yields knowing that this was untrue.

Thousands of people were affected when the island’s two biggest lenders, the Bank of Cyprus and Popular Bank, stopped paying interest and blocked access to the investors’ capital following losses on a Greek sovereign debt write-down in late 2011.  The total amount put in securities is said to be around €1.4 billion.

INCENTIVES and liberalisation of flights could increase the tourist flow to Cyprus by 400,000 people per year, the House Commerce Committee heard yesterday.

Lawmakers and the Cyprus Tourism Organisation (CTO) asked for a reduction in airport fees in a bid to attract more airlines to Cyprus but airports operator Hermes said a general cut would be difficult and ineffectual.

Airport fees were not decided arbitrarily by Hermes; there was a specific timeframe and pricing policy, Hermes spokesman Adamos Aspris said.

“This is an integral part in the concession agreement, which has been approved by parliament,” he told reporters.

Commerce Minister Giorgos Lakkotrypis said airport fees must be reduced, adding that his Lebanese counterpart had told him that charges in Cyprus were double than in Lebanon.

CTO director Marios Hannides said a way must be found to reduce fees.

Hannides said the CTO had a study that said Larnaca and Paphos airports charged double the fees airports in Spain, Turkey and Athens did.

The communications ministry however, said that imposing a reduction would mean the state footing the bill.

And an across-the-board reduction could be considered a state subsidy and land Cyprus in trouble with the European Union.

Hermes representatives pointed out that targeted incentives and liberalisation would be much more effective.

Maria Kouroupi, Hermes marketing manager, said Cyprus could increase its tourist flow by 400,000 a year.

She said companies like Easyjet, Wizz Air, and Germanwings had already expressed an interest in bringing more passengers to Cyprus provided that certain agreements were struck regarding central and eastern Europe.

Some destinations remained closed, reserved through bilateral agreements for Cyprus Airways (CY), which does not even have scheduled flights for those countries.

Those destinations included UAE, Egypt, Jordan, Saudi Arabia and Kuwait.

A bilateral agreement with Russia allows only two companies – one from each country -- to carry out scheduled flights to Moscow and Saint Petersburg while two airlines service eight other destinations.

A similar agreement is in place with Israel – one airline from each country – carried out scheduled flights, although the neighbouring country’s skies will be opened in 2017 when an agreement with the EU will come into effect.

Communications ministry official Iakovos Demetriou said 80 per cent of passenger traffic in Cyprus came from the EU – the rest from third countries.

Hermes officials stressed that any effort to increase tourist arrivals must be collective and focused in the same direction – the operator for instance cannot strive to strike a deal with a German airline while the CTO campaigned in Poland.