ALTHOUGH the House yesterday passed more tax bills deemed key for Cyprus to qualify for a foreign aid package, a question mark still hung over whether a fractious parliament would sanction the actual loan agreement to be concluded soon between the government and international lenders.

The plenum last night gave the nod to a series of government bills designed to raise state revenues: a corporate tax rate hike by 2.5 points to 12.5 per cent; doubling the tax rate on interest and dividend income (capital gains tax) to 30 per cent, via the defence contribution tax; and an increase in the bank levy on deposits raised by banks and credit institutions from 0.11 per cent to 0.15 per cent with 25/60 of the revenue earmarked for a special account for a Financial Stability Fund, applying retroactively as of January 1 of this year.

A revised tax on immovable property – aiming to ensure additional revenues from property taxation of at least €70m by updating 1980 prices through application of the CPI index for the period 1980 to 2012 – was not brought to the plenum yesterday but is expected next week.

Implementation of the IPT is one of the preconditions set by international lenders for the release of €10bn loan.

Parliament postponed a vote on a bill for additional scaled pay cuts (from 0.8 per cent to 2 per cent) in the broader public sector.

Also delayed was an item containing further restrictions to those entitled to free public healthcare. Under the bill, to be eligible a person must have made contributions to the relevant fund for at least three years, and must have submitted a tax declaration prior to applying for free care. It also provides for a 1.5 per cent contribution to the fund by civil servants.

The House meanwhile passed an amending law whereby any future changes to excise duties would need parliament’s approval; so far this required only a decree issued by the finance minister.

And a legislative proposal by DISY freezing all promotions in the public sector during 2013 passed by a majority vote, with AKEL abstaining.

Cyprus this month struck a memorandum of understanding with the troika of international lenders – European Commission, European Central Bank and International Monetary Fund. 

The MoU is not the same as the actual loan agreement, which is akin to an international treaty between the Republic and foreign governments.

Under the constitution, the treaty is subject to parliament’s approval. Once the loan agreement is drafted, it will be reviewed by the cabinet, which will then forward it to parliament for discussion and the vote. It’s understood the MoU and the loan agreement would be bundled into a single document as a ratification law.

But a shadow has been cast over whether the loan deal will muster enough votes in the House: so far only ruling DISY and junior coalition partners DIKO have come out openly in support of the loan agreement. Combined, the two parties do not have the required majority in the House. The rhetoric from AKEL and socialists EDEK has been hostile to the troika. It’s been suggested, however, that the two parties could abstain rather than vote against.

The loan still has to be approved by the national parliaments of some eurozone nations, with Germany’s Bundestag taking the lead by backing the bailout yesterday.

Reports yesterday suggested the loan agreement could be brought before Cyprus’ parliament late next week, for tactical reasons.

“It’s probably a wise move…should our parliament do the unthinkable and reject it first, why should the foreigners then bother with it at all?” commented one MP belonging to the government camp.

At a news conference yesterday, new DISY leader Averof Neophytou sent out a warning shot to dissenting quarters. The choice before Cyprus is clear, he said: either accept the bailout or face bankruptcy.

He added: “Those who want to get rid of the troika should tell us how we can come up with €30bn; if they do that, we will be the first to kick the troika out.”

Asked to clarify, Neophytou said the cost of leaving the euro would be €30bn, because in addition to its €23bn financing needs, Cyprus would also need to pay back the some €10bn its banks have borrowed from the Emergency Liquidity Assistance. The ELA is underwritten by the government.

LIKE SO many other areas of the economy, the private education sector is in crisis. Although the government announced that educational institutions were to be exempt from the brutal haircut on deposits, it is not yet clear whether private schools are included.

But even if the deposits of those schools which banked with Bank of Cyprus and Laiki are saved, the haircut and spiralling recession is likely to have a dramatic impact on student numbers. 

Cypriot parents have traditionally made big sacrifices in other areas of their lives to send their children to private schools. The crumbling state school sector and the career advantages an English language education provided made those sacrifices seem worthwhile.  In the meantime, the private school sector in the last decade expanded. In the mid-2000s, the economy was booming, increasing numbers of parents had the money for fees, while the growing expat populations especially from Britain and Russia meant a steady stream of foreign children who needed educating. Existing schools moved into newer, larger premises, new schools were established. 

It was not to last. Student numbers had already dropped in the last two years as the first effects of the economic crisis hit home. Now the bailout juggernaut has crashed onto our shores, private schools will bear the full brunt of it. Already, they are offering discounted fees and renegotiating fee payment schemes to keep student numbers up.  It is unlikely to be enough and it is hard to see how all these schools can keep going.

But like so many other areas of the economy, the crisis does provide an opportunity to adapt and make meaningful change to a sector that had fundamental flaws all along. Quite simply, there are too many private schools and most of them – even during the boom years – were and are too small to offer a fully rounded education. At IGCSE level, for example, students are often far more limited in the combination of subjects they can study than they would be at a state school in the UK and are forced to make an uneven arts/science choice far too early in their academic careers.  At A level the limitations are even tighter.  Sports, music and arts facilities at some schools are also patchy. 

These weaknesses will become ever more evident as student numbers fall.

The answer seems obvious, small schools should pool resources and amalgamate.

The schools themselves will be most reluctant because each has tried to create its own identity. Some pride themselves on their traditional, academic ethos. Others seek to be more inclusive. Some aim for a truly international student base. Others are basically Greek schools where the language of instruction happens to be English. 

But the crisis may well force them to overcome their reluctance. In the process, merged schools will finally be able to offer a richer range of subjects and improved facilities. Both the students and their parents deserve nothing less.

THE RATE of absorption of EU funds by Cyprus was lower than the average for the EU, according to the European Commission`s Strategic Report on the implementation of 2007-2013 Cohesion Policy programmes.

According to the Report, Cyprus could utilise €612.4 million for the period 2007-2013. But by January 2013, the Cypriot authorities had absorbed only €243.1 million or 39.7 per cent of the total, with the EU average being 42.4 per cent.

Regarding the European Regional Development Fund and the Cohesion Fund, by January 2013 Cyprus had absorbed 40 per cent of the €492.6 million, while regarding the European Social Fund, which funds programmes for employment, combating poverty and social exclusion, and promoting vocational training, Cyprus had absorbed 28.4 per cent of the €119.7 million by January 2013.

The member states must absorb the total of the funds for the period 2007-2013 by the end of 2015 otherwise the funds will be lost.

The Commission`s Report notes that, with four more years to go until the programmes finish in 2015, investments under the European Regional Development Fund, Cohesion Fund and European Social Fund have already led to progress and improvement for many citizens.

Across the EU, these include that 1.9 million more people now have broadband access, 2.6 million more people are served by water supply, 5.7 million more by waste water projects, there are 460 km of TEN-T roads and 334 km of TEN-T rail, and 2.4 million people assisted by the European Social Fund found a new job.

Innovation and small business are receiving a huge boost from cohesion policy investments with many more in the pipeline. So far, 53,240 RTD projects and 16,000 business-research projects received investment, and 53,160 start-ups have been supported.

As funds are utilised and projects get off the ground, the report documents a significant increase in the number of people supported in the area of employment from around 10 million annually before 2010 to some 15 million on an annual basis since then, and a significant acceleration of results since 2010 in the area of support for SMEs, with almost 400,000 jobs created (half of these in 2010/11) including 15,600 research jobs and 167,000 jobs in SMEs.

Through its three Funds - the European Regional Development Fund (ERDF), the European Social Fund (ESF), and the Cohesion Fund - EU cohesion policy is investing €347 billion in 2007-2013 in the 27 member states. This represents 35 per cent of the total EU budget for the same period (€975 billion).

The Report also underlines the relevance of the profound reforms currently being negotiated between the European Parliament and EU governments for cohesion policy from 2014-2020, including a more strategic concentration of resources on key priorities and more focus on results and evaluation.

THE commerce ministry announced the renewal of the cap on milk prices yesterday, keeping it at a maximum of €1.41 a litre for retail and €1.32 a litre for wholesale, including VAT.

The renewed decree will be put into effect on April 21 and will last for 45 days, making it due to expire on June 4. The price of milk was last renewed on March 6. 

The maximum price for 1.5 litres is €2.06 for retail and €1.93 for wholesale. The maximum price for 2 litres is €2.69 for retail and €2.52 for wholesale. All figures include VAT.

In a statement the commerce ministry asked that “all parties involved show restraint, especially during these economic conditions, in order to protect consumers and domestic producers of fresh milk.”

The price cap decree was originally issued by the previous commerce minister Neoclis Sylikiotis after farmers threatened to increase the price of raw milk by 1.8 cents after they had already raised the price by four cents. 

A MOVE by the Cyprus Tourism Organisation (CTO) to give a promotion two days before parliament was due to pass a bill on freeze promotions and pay rises in the public sector has been was labelled insulting and provocative by MPs.

CTO’s move to promote Yiannis Koui to administrative director only came to light a few hours before Thursday’s  House plenum - during a meeting of the House Commerce Committee. 

Speaking from the stand at Thursday’s plenum, chairman of the House Commerce Committee, Lefteris Christoforou called the move unacceptable. DIKO MPs Angelos Votsis and Giorgos Varnava both echoed Christoforou’s concerns, before the former suggested an amendment to CTO’s budget to remove funding for the position of administrative director. Votsis’ amendment was approved by DISY, DIKO, EDEK and EVROKO. 

It was argued by AKEL MP Nicos Katsourides that Koui was not being promoted but rather re-appointed to the post as he was only temporarily employed by the CTO.

Head of the CTO, Alecos Oroundiotis explained that the Organisation had begun proceedings to fill the permanent position of administrative director over a year ago and were unaware that pay and promotion freezes were going to be implemented.

“The appointment of Mr Koui was not decided overnight and we had conducted interviews and followed all of the necessary procedures set by the Supreme Court to permanently fill the position of administrative director,” he said. 

Oroundiotis added that after hearing about the possibility of pay and promotion freezes the CTO sought legal council on whether they should continue the hiring procedures. “We asked our lawyer Antis Triantafyllides who told us it is our obligation to continue with the procedure regardless of any steps that Parliament was planning to take,” he said. 

Oroundiotis believed that parliament acted correctly in revoking the position however. “The House has every right to make any legal decisions and as an organisation, the CTO did not stand in their way or tie their hands,” he added.

SEMI-state companies (SGOs) are looking into securing a €1.4 billion loan in a bid to avoid being privatised as part of the island’s €10 billion bailout.

The proposal was tabled by the chairman of the telecommunications company CyTA and was discussed yesterday with the heads of the electricity authority (EAC) and the ports authority, among others. 

“These organisations belong to the people and should remain with the people,” CyTA chairman Stathis Kittis said. “I believe there are ways to mortgage the people’s property, instead of selling it, and provide the state a way out.

Kittis said his proposal would be discussed by the boards of the various SGOs and then submitted to the government.

According to the deal struck with international lenders, Cyprus should collect €1.4 billion from privatisations.

In a letter to his counterparts, Kittis suggested selling the SGOs was the objective of certain circles inside and outside Cyprus.

Kittis proposed setting up an entity where all SGOs will participate according to their assets, which however must not have any encumbrances.

Kittis said CyTA and the EAC alone could cover up to €1.2 billion through their immovable property and infrastructure.

The entity will then seek loans from international organisations, mainly from Chinese banks but also from HSBC, BOA/Merrill Lynch, and others which have shown great interest to lend money to credible organisations, Kittis said in his letter.

Cash could also be raised by issuing bonds that will be underwritten by one of the large investment banks, he said.

The money will then be granted to the government as the SGO’s share but it will also be considered a down-payment for participating in the natural gas investment, the letter said.

“In essence, this share will still be the property of the government,” Kittis said.

The CyTA chairman said the link with the natural gas would add weight to the loan request and help secure better terms like lower interest and a grace period of three to four years before staring its repayment.

THE Central Bank of Cyprus (CBC) yesterday released the detailed results of a due diligence of the banks that determined they will need around €8.9 billion in additional capital needs.

The capital needs were the result of a comprehensive analysis of the value of credit portfolios and foreclosed assets, and of the earnings capacity of the banks to absorb losses over the next three years under an adverse scenario.

According to this scenario, domestic banks will need some €8.2 billion while foreign lenders need €149 million.

Cooperative banks need €589 million, the due diligence that was carried out by investment experts PIMCO found.

The due diligence, completed in January, covered 22 institutions representing approximately 73 per cent of the Cypriot banking system’s assets: Bank of Cyprus, Laiki and Hellenic Bank; Cypriot subsidiaries of Foreign Institutions Eurobank and Alpha Bank, and Cooperative credit institutions, the Cooperative Central Bank, Limassol Cooperative Savings Bank and a representative sample of 15 cooperatives affiliated to the Cooperative Central Bank.

Under the adverse scenario, banks were expected to chalk up around 18.3 billion in losses, with most – €15.6 billion -- incurred by domestic lenders.

Foreign banks will lose some €1.3 billion and cooperatives €1.4 billion, PIMCO said.

Pimco’s base scenario predicted that banks’ total recapitalisation needs would reach €5.9 billion: domestic €5.6 billion, cooperatives €364 million and zero for foreign lenders.

The due diligence exercise has established the amount of capital that each bank would require to reach a minimum Core Tier 1 ratio of 9 per cent in the base case scenario and 6 per cent in the adverse case scenario. 

As with any stress test, the adverse case scenario was designed to cover “what-if” situations reflecting even more stressed macro-economic conditions than might reasonably be expected to prevail, the CBC said.

And even though macroeconomic projections have since deteriorated, the use of conservative assumptions by PIMCO, provides a buffer for worse than expected macroeconomic environment. 

The MoU agreed with the troika specifies that the estimation of capital needs is an essential element of the plans laid down for the recapitalization and restructuring of the Cypriot banking system. 

To this end a part of the €10 billion total financial assistance that will be granted to Cyprus will be deposited in a dedicated account with the CBC to be used for recapitalising cooperative credit institutions and commercial banks other than Bank of Cyprus (BoC) and Laiki.

BoC will raise the money it needs by imposing a haircut on uninsured deposits while Laiki will be resolved.

Cooperatives will be given until 31 July 31 2013 to cover their capital shortfalls whereas other commercial banks will be allowed until the end of September 2013.

Any institution that failed to raise the required capital within the set timeframe, thus requiring state assistance, would have to prepare a restructuring plan within two months from the applicable deadline for raising capital from private sources.

ONE OF Cyprus' most senior civil servants yesterday likened his country's treatment by Germany and the IMF to the shooting of a pigeon with an atomic bomb, saying they had destroyed an economic system that worked.

Christos Patsalides, permanent secretary of the Ministry of Finance, was speaking to a committee inquiry which launched a public hearing yesterday into the circumstances that led to the country’s economic meltdown.

He described the international lenders as "forces of occupation" that cared nothing for human rights.

Patsalides took part in the recent bailout negotiations between Cyprus and the European Union and International Monetary Fund.

He told the three-man inquiry that an "unrelenting" team of technocrats had dispensed savage fiscal punishment to cash-starved Cyprus. 

"With the imposition of Germany and the IMF ... they shot a pigeon with an atomic bomb," he said.

But the size of the bailout they were discussing, some €17.5 billion, was equivalent to a mere 0.1 per cent of the European Union’s annual needs, Patsalides said.

Many Cypriots saw their life savings vanish in March when authorities imposed losses on uninsured deposits in two of Cyprus’ banks – Laiki and Bank of Cyprus -- which were badly stung by an EU-sanctioned write-down on Greek sovereign bonds.

The depositor losses, which also hit overseas depositors, many from Russia, were part of Cyprus's contribution ensure it received a €10 billion bailout from the EU and IMF.

With Laiki Bank in resolution, the Bank of Cyprus was forced to take on Laiki’s Emergency Liquidity Assistance (ELA) that the ECB provided to Laiki via the Central Bank of Cyprus (CBC) and was allowed to rise to €6.3 billion, Patsalides said.

ELA is meant to be given to viable banks for a limited period, so why was Laiki financed for “so long and to such a large extend?” Patsalides asked, adding that a question mark hung over the ECB’s actions. 

Asked if the government was wise to acquire in May 2012 an 84 per cent stake in Laiki, bailing it out to the tune of €1.8 billion, Patsalides said the position that prevailed at the time was that letting Laiki collapse would have been catastrophic to the whole banking system.

But it was “no secret” that for years, the then Central Bank governor, the Finance Minister and the President “were not on best of terms,” Patsalides said. This made promoting policy on a technocratic level more difficult, he added. 

And he said that a due diligence test on the banks carried out by investment experts PIMCO with a Central Bank mandate was saddled with “non realistic “ assumptions that raised the banks’ estimated needs. 

But with the benefit of hindsight, it has become clear that Cyprus did not take enough action to curb expenses and strengthen the economy, Patsalides said. There were plenty of warnings on a technocratic level, Patsalides said, but refused to explicitly state that there was inaction on the part of previous political leadership. 

Cyprus, which had modelled itself as an offshore financial services centre for lack of any other resources, now faces a grim future with its reputation in tatters and its economy deep in recession.

"They destroyed an economic system that worked," Patsalides said. "Yes, we have our shortcomings, but the magnitude of the punishment is far greater than the size of the problem."

Asked whether forcing losses on depositors was compatible with their individual rights, Patsalides replied: "When you are dealing with forces of occupation, they don't talk about human rights."

IN A PACKED room at the Presidential Palace, in front of ministers, MPs, party leaders, and leading businessmen, President Nicos Anastasiades last night announced measures to help kick-start the economy.

At the same time he officially announced the construction of a liquefied natural gas (LNG) plant. 

The measures, drawn up by the cabinet during two days of meetings at the beginning of the week, were five-fold and are aimed at helping vulnerable groups, training unemployed individuals, creating new jobs, helping stimulate economic growth and encouraging environmental development, Anastasiades said in a televised address.

"Any attempt to gloss over the tough measures imposed upon us [by the troika] would be an indication of weakness in comprehending the real problems society now faces, and a lack of vision and decisiveness from the state in restarting the economy," he said.

“The most important thing today is joint action and reaction to the dire measures we were forced to accept in an attempt to avoid the unthinkable. We will not shy away from the challenges ahead.”

Anastasiades said that after discussions, the government would be in a position to adopt a national energy policy which would be completed within the next two weeks. The only policy that he was willing to announce last night was the construction of the LNG plant, he said. 

During his speech the President referred to the difficult position in which the government had been placed and the dilemmas it faced after the Eurogroup meetings on March 15 and 25.

“I do not believe it would be in the country’s best interests to be confrontational. We would be better served through creational cooperation,” he said.

He said the committee of inquiry which began yesterday would apportion blame where it was due.

He reassured people that the government would show courage in the face of the challenges ahead and would not shirk its responsibilities. After exhaustive dialogue with universities and the professional and business communities, Anastasiades believed a coherent programme that meets the needs of today and prospects for tomorrow was now complete.

“I would like to stress that to succeed in restarting our economy and overcoming the crisis as soon as possible we must strictly observe any obligations we have undertaken through the bailout agreement with consistency,” he added.

Anastasiades went on to say there was no doubt there would be difficult trials ahead and asked for everyone’s understanding and patience. “If we do not discipline ourselves within a structured programme, far from populism and unrealistic proposals we will be faced with more painful consequences,” the President said.

“Knowing the patriotism, creativity and tenacity that distinguishes a nation which has been tested in worse conditions than the present ones and has proven it can get back on its feet and prosper, makes me optimistic that we will succeed,” he concluded.

FULL LIST OF MEASURES 

Vulnerable groups 

- Through agreement, the length for repayment of loans can now be extended without further burdening those who may have difficulty repaying.

- The government is looking into finding a way to reduce the interest rate on loans as well as the reduction in the price of electricity for the vulnerable and needy.

- By the end of June, regulations will be in place to ease the restructuring of any debt by appointing a banking mediator to oversee any changes.

- Residential and commercial property owners who are unable to pay their debts can become tenants of the property and will have first option in re-purchasing once they are in a financial position to do so.

- There will be funding of up to 50 per cent of the cost of installing photovoltaic systems.

- With the aim of aiding the private health sector and at improving the quality of service at state-run hospitals the government has decided to pay €6m to the private sector for certain services.

Employment 

- Parliament is expected to pass a bill which will see the hiring of 800 casual government workers, the reappointment of contracted teachers and the employment of 300 graduates from military academies.

- The government will give €21m in funding towards the tourism industry to employ 6,000 people who are currently unemployed. 

- The state will subsidise the wages of unemployed citizens by 65 per cent in jobs where they can work from home or have flexible working hours, creating the opportunity to give work to 1,000 unemployed people.

- The Church and the University of Cyprus will make arable land available which the government will then hand over to people based on professional, economic and social criteria. Rent will be low and the ministry of agriculture will train and provide services to help to support those who work on the land.

- A programme will be set up to help train more than 1,000 degree-holders to find employment in both the private and public sectors with a monthly wage of €500 for all participants.

- Companies will receive up to 25 per cent in tax exemptions for every person they hire within the next year.

- The plan will see the immediate implementation of the pending Youth Entrepreneurship Plan creating 1,000 new jobs.

Development 

- The amount of time required to issue planning permission will be reduced to a maximum of one month for small works and three months for large works. 

- An agreement has been made between Cyprus and the Sovereign Base Areas (SBA) which will allow the urban development of land within the limits of the SBA.

- Building coefficients will change and have been increased by 30 per cent in residential areas for large commercial developments. The coefficient will be increased by 25 per cent on the outskirts of residential areas for large commercial or office developments. It will increase by 20 per cent in certain tourist zones for large-scale property and increased from 10 to 15 per cent for the areas available for golf courses.

- The tourist season will be extended by two months.

- Green light for casinos.

- Guarantee mechanism to financially help small and middle-sized businesses by offering them favourable terms.

- The government will give permits to joint tourist developments like condo hotels.

- Foreign nationals will be encouraged to invest in Cyprus by being given long residency permits.

- A state authority will be put in place to efficiently take advantage of government owned land.

Environment 

- The government has decided to reduce the cost of electricity by introducing photovoltaic systems for commercial and industrial consumers including public buildings.

- Photovoltaic parks capable of producing 50 MW of power will be built to help reduce the cost of electricity, saving €51m a year in fuel. It will also help save €2m a year by reducing the emission of pollutants, give jobs to at least 650 people and help Cyprus meet its renewable energy requirements for 2020.

Social policies

- The government’s allowance policy will radically change to meet the needs of asylum seekers and other foreigners in Cyprus as all allowances would be revised and considerably reduced. 

- Allowances for money and food would be replaced by a coupon system.

Positions at state universities

- The University of Cyprus will increase the number of new entrants by 100 and will offer 200 positions to Cypriot students who are currently studying abroad. 

- Cyprus University of Technology, TEPAK will have 35 extra positions for new entrants and 30 spots for those studying abroad.

PARLIAMENT is once again digging its heels in on the revised memorandum of understanding with the troika.

Although they passed some of the legislation required for the bailout money to start flowing, key issues were put aside on Thursday. These included the revised tax on immovable property – previously opposed by big landowners – and a vote on a bill for additional scaled pay cuts (from 0.8 per cent to 2 per cent) in the broader public sector. No surprise there, although this should have been the easier of the two to approve, crisis or no crisis, if ethics were in any way a consideration for being a deputy.

Also delayed was an item containing further restrictions on those entitled to free public healthcare. Under the bill, to be eligible a person must have made contributions to the relevant fund for at least three years, and must have submitted a tax declaration prior to applying for free care. It also provides for a 1.5 per cent contribution to the fund by civil servants.

There is also the bigger question of whether parliament would approve the actual loan agreement in a vote now slated for next week. 

On March 19, deputies heroically rejected the initial bailout deal calling for a deposit haircut across the board. Yes, it was a lousy deal but their knee-jerk reaction only led to something worse because the heroic deputies jumped in without themselves proposing a less painful  alternative to the initial haircut.

And now, a month later, it seems they may take another ‘stand’ against the evil troikans, or at least pretend to do so in order to hold on to the impression that they represent the people instead of themselves and the remainder of the public service.

Deputies, like the public, are entitled to slam the two-finger bailout deal imposed on Cyprus. The difference is ‘we the people‘ are not the ones obliged to come up with a solution. They are. If deputies have a plan to prevent the haircut, stop the island defaulting, save the financial sector, initiate our exit from the euro, and to borrow a Cyprob reference ‘ensure that all the unemployed return to their jobs’, they really ought to share.

 If there is an alternative, let’s hear it. If their plan succeeds, they really will be heroes to the people and we will be the first to congratulate them. 

But just like the Cyprob reference, when you reject one painful compromise, you can be sure there will be an even more painful one just around the corner. More than 60 years of Cyprus’ history has shown this to be a fact no matter how unfair much of it was. 

So, if by delaying the inevitable, yet again, deputies are willing to force this country into bankruptcy, or an even worse deal, simply for the sake of grandstanding, then history is doomed to repeat itself. Parliament needs to put up or shut up. 

After living in fear for four days, Boston let out a sigh of relief on Friday evening.

As news spread that police had captured the second man suspected of setting off two bombs on Monday at the BostonMarathon, killing three and injuring 176, the streets of Boston and Watertown erupted into thunderous applause and cheers.

Less than 24 hours earlier, the first suspect was killed during a firefight with police. Officials identified the captured suspect as Dzhokhar Tsarnaev, 19, and said the dead suspect was his brother, Tamerlan Tsarnaev, 26.

After hours of anxious waiting, BostonMayor Thomas Menino tweeted "we got him" after police took the Dzhokhar Tsarnaev into custody. Later Menino tweeted a picture of himself and Governor Deval Patrick shaking hands with the word "Teamwork."

Exhausted residents of Watertown, a working-class neighborhood 5 miles (8 km) from Boston, went outside for the first time in hours and applauded police as officers and cars left the scene. Residents spent much of the day indoors as police conducted a door-to-door search for Tsarnaev.

In Boston, people streamed into the streets, cars honked their horns and crowds gathered near the finish line of the marathon, which is still roped off as a crime scene four days after the bombings.

Crowds also gathered around Fenway Park, where Friday's Boston Red Sox game was postponed. Hundreds of students celebrated outside Simmons College.

Student Jean Caron came out to cheer police, clapping as each cruiser passed. "They deserve it. It's unbelievable what they had to go through the past few days," Caron said. Police honked horns and ran sirens to acknowledge the cheers.

It has been a wrenching week marked by death, injury and a tense manhunt for the two suspected bombers.

Amid the Friday night celebrations, there was a feeling among some that the bombs had shattered a sense of safety and openness Boston.

Rich Havens, who serves as the race's finish area coordinator, has been waiting anxiously for some break in the case. He and hundreds of others were forced to run for cover as the bombs ripped through the crowds on Monday.

"Certainly it is a great relief that the two suspects have been dealt with," he said. "This is going to give us some closure for the 117th Marathon and allow us to finally clean up the streets, return them to traffic, and look ahead to next year."

A strong 6.6 magnitude earthquake hit a remote, mostly rural and mountainous area of southwestern China's Sichuan province on Saturday, killing at least 102 people and injuring about 2,200 close to where a big quake killed almost 70,000 people in 2008.

The earthquake occurred at 8.02 a.m. (0002 GMT) in Lushan county near Ya'an city and the epicentre had a depth of 12 km (7.5 miles), the U.S. Geological Survey said.

The quake was felt by residents in neighbouring provinces and in the provincial capital of Chengdu, causing many people to rush out of buildings, according to accounts on China's Twitter-like Sina Weibo microblogging service.

State television said 102 people had been confirmed dead with more than 2,200 injured, 147 of them seriously.

President Xi Jinping and Premier Li Keqiang said all efforts must be put into rescuing victims to limit the death toll.

Li arrived in Chengdu and was on his way to the disaster zone by helicopter, state media said.

"The current most urgent issue is grasping the first 24 hours since the quake's occurrence, the golden time for saving lives," Xinhua news agency quoted Li as saying.

Xinhua said 6,000 troops were heading to the area to help with rescue efforts. State television CCTV said only emergency vehicles were being allowed into Ya'an, though Chengdu airport had reopened.

Most of the deaths were concentrated in Lushan, where water and electricity were cut off. Pictures on Chinese news sites showed toppled buildings and people in bloodied bandages being treated in tents outside the hospital, which appeared only lightly damaged.

Rescuers in Lushan had pulled 32 survivors out of rubble, Xinhua said. In villages closest to the epicentre, almost all low rise houses and buildings had collapsed, according to footage broadcast on state television.

"We are very busy right now, there are about eight or nine injured people, the doctors are handling the cases," said a doctor at a Ya'an hospital who gave her family name as Liu.

The hospital was seeing head and leg injuries, she added.

"SHAKES AND TREMORS"

A resident in Chengdu, 140 km (85 miles) from Ya'an city, told Xinhua he was on the 13th floor of a building when he felt the quake. The building shook for about 20 seconds and he saw tiles fall from nearby buildings.

Ya'an is a city of 1.5 million people and is considered one of the birthplaces of Chinese tea culture. It is also the home to one of China's main centres for protecting the giant panda.

"There are still shakes and tremors and our area is safe. The pandas are safe," said a spokesman with Ya'an's Bifengxia nature park, a tourism park that houses more than 100 pandas.

Shouts and screams were heard in the background while Reuters was on the telephone with the spokesman.

"There was just an aftershock, an aftershock, our office is safe," he said.

Numerous aftershocks jolted the area, the largest of which was magnitude 5.1.

Sichuan is one of the four major natural-gas-producing provinces in China, and its output accounts for about 14 percent of the nation's total.

Sinopec Group, Asia's largest oil refiner, said its huge Puguang gas field was unaffected.

The U.S. Geological Survey initially put the magnitude at 7, but later revised it down.

The devastating May 2008 quake was 7.9 magnitude.

ON MARCH 16, the day depositors woke up in Cyprus to be told they could not transfer money out of the country, Colin and Anne Brookfield realised they would have to let go of a ten-year labour of love.

Banks were told to stop electronic money transfers to guard against capital flight after an initial Cyprus bailout deal agreed with the eurozone’s finance ministers and Cyprus’ lenders demanding that all bank depositors in Cyprus contribute some of their money. Banks were to remain closed for nearly two weeks.

Colin Brookfield, 81, had spent years developing a safe cat flap, talking to pet owners, designing a prototype, and eventually lodging a patent with the UK government’s Patent Intellectual Property Office in 2004.

He and his wife Anne, 69, moved to Cyprus in 2007 partly because they thought it would be easier to set up a business in Cyprus, and since moving here had been talking with a Chinese company for years to get the mould design for the cat flap just right. 

“We had just actually returned on the very day [March 16] from the UK… to discover we could not pay our dues to our engineers in China,” Colin Brookfield said. 

“I could see ten years of work suddenly come to an abrupt end.”

Yet back in 2007 the move to Cyprus had seemed such a good idea. That year Colin became connected with a Chinese company based in Changchun via the Euro-China business week organised by the Cyprus Chamber of Commerce and Industry and the International Merchandising Centre. This year they were ready to start marketing the product after getting the mould from China. Colin planned to manufacture the products in Cyprus and export to the US and Northern Europe. And then on March 16, the couple needed to pay the company €15,000. And they couldn’t.

Colin has now gifted the patent to the Chinese company and is planning to give up two other cat-related patents.

“I could see that even given time, if things were eased there would still be difficulties setting up a business in this country,” Colin said. And with that, he let go.

“I would have loved to continue through with the whole process but it became at that moment impossible and the future looked too restrictive,” Colin said. 

Not believing authorities’ statements were the complete story and thinking that the ramifications from the bailout would be “much more extensive” than originally perceived, Colin said that he was fed up and did not want to negotiate with the Chinese - he just let them have the patent and any future profits.

The Brookfields said the main goal was always to ensure animals were safe, and there had been too many stories of cats getting trapped in flaps, too many injuries that could be prevented by a safer cat flap. 

“They say necessity is the mother of invention and that’s exactly what we did it for,” said Anne. 

As it happens, the Brookfields are not short of money and would be happy if they could have only “generated enough to defray costs”. 

“I’m 81, I’ve got no fantasies of being a multimillionaire,” Colin said. 

But it has been a long journey for them, Colin said. There was displaying the product on BBC’s Animal Rescue, featuring in magazine articles, surveying pet owners on cat injuries, and then deciding to “go alone” with the project after manufacturers in the UK seemed reluctant to back them as, according to Colin, “the safer alternative would put existing manufacturers in a difficult position”.

Colin has every reason to believe the Chinese will get the product to the market “but sadly it is another little thing that is a loss to the economy of Cyprus,” he said.

Pet magazine article featuring Colin Brookfield and his safe cat flap

“I don’t know if we’re getting our pensions next month,” said Koulla Tabidji. 

“I only got my widow’s pension this month, not my pension. Then I had to go back and ask for my pension,” added Chloe Panayi.

“Mine was late too,” said a third lady.

“I think mine was less this time,” shouted out a fourth.

“The Labour Minister said we’re going to get our pensions. But then I heard some reports we are not getting it next month, and then I heard other reporters say we are. I don’t know,” said Eleni Miliou. 

“I think they’re going to cut my pension. Well everyone’s pension, not just me. It’s a general phenomenon,” said another lady.

This was just one of the many strands of conversation a group of elderly female pensioners at the Nicosia Municipality Multifunctional Foundation were having on Tuesday morning, when asked how they’d been affected by the bailout. And like everyone else, confusion over how the bailout will affect their financial futures is as rife as the anger and the fear. But there was humour too.

For a start, getting the ladies to concentrate on the issue of the bailout, and how it had affected them, was not easy, particularly when there were more pressing things to discuss: like why knowing their age was so important. 

“She’s 85,” mouthed 82-year-old Panayi, about Tabidji, who’d just said she was 82. 

“What did she say,” shouted Tabidji. 

“Nothing,” soothed Agnes Theochardes, 84. “We know you’re the youngest one here.”

“Hmph. What is she talking for anyway,” said Tabidji, folding her arms crossly. “I’ve said my age.”

“I didn’t say anything,” Panayi answered back, straining over Eleni Miliou, who was busying herself making needlepoint lace for her grandchildren.

But back to the haircut, how had it affected them.

“Haircut? What haircut? I don’t need a haircut,” said a small dark haired lady sitting in the corner, suspiciously. 

“No, she means about this crisis,” said Tabidji.

“Oh, well we’ve all been affected,” they said in unison. 

It wasn’t so much that they had lost their savings, but that they were upset for their children and grandchildren, they said.

“My son has three children and was laid off last August. He got a job a month ago and then on Friday when he asked for his wages not only did they not pay him, but they also let him go,” said Milia Roussou, 87.

“He had to come to me for money, so I gave him my savings booklet and he went to the bank and withdrew some cash,” she said. “I’d rather help my son and go hungry myself,” she added, her eyes glistening with tears.

Eighty-four-year-old Miliou said she’d lost weight and started having palpitations since the bailout ordeal began. Her weight loss was vigorously confirmed by her group of friends. 

“My son has already lost €450 from his monthly salary and he might lose more,” she said.

Another son had removed his savings from Laiki five months ago and had put them in the cooperative bank, she added.

“That was God’s doing,” said Miliou. “They (Laiki) didn’t want to let him have his money but he got angry and got it out. Looks like it was just in time too.”

Tabidji said her husband, who had a bad heart, had been unwell since news of the haircut was announced. She also said her children had been affected but that they hadn’t told her how much they’d lost.

“It’s such a shame. All those families in misery,” said Miliou. “Our president said he wouldn’t agree to a haircut and now it’s the destruction of us.”

Seventy-nine-old Lella Angelidou said she could live on bread and olives if it came down to it.

“I’ll manage. One way or another I’ll get through. It’s my children and grandchildren I’m concerned about. My daughter works in Laiki and she’s up to her eyes in debt. She wanted to pay for her son’s wedding and now she can’t,” she said. 

Sighing deeply, the 79-year-old said great misfortune had befallen Cyprus. Then, pointing out a widow quietly making traditional Cypriot lace, she said: “Now she’s lost a lot of money. “

The widow in question, who was in her mid 80s, spoke on condition of anonymity. 

“I don’t want people to read it and know...,” she said.

“My daughter lost a lot of money (€100,000) but she has a lawyer on the case,” she said.  Apparently, according to her, her daughter had tried to close her Laiki account last summer but that the bank had refused to let her take her money out. 

“She had one of those accounts with high interest; where you can only touch your money after five or seven years. I don’t know what it’s called. But they haven’t been paying her interest since last year so she wanted to move her money. I don’t know if they can do anything now,” she said. “Do you think they can?”

Despite their confusion and obvious upset when gently pushed to discuss the issue, the majority of pensioners still displayed a sense of humour - especially when their gym teacher came for their weekly exercise regime.

“Don’t worry, the president is going to go to Israel and get us money,” laughed one pensioner, as she stretched her legs holding on to the back of a chair. 

“He’s going to come back with bucket loads. It’s going to rain money,” called another from across the room.

“No it’ll be from Russia,” cried someone else.

“I think you mean China.”

The room erupted in peals of laughter and the conversation quickly moved to their aches and pains, which one of them had suffered a fall recently, and their churchgoing habits during Lent.

Others wanted to boast about their children, their grandchildren, their great-grandchildren, and who was able to stretch their arms the most.

At the end of the day, when all was said and done, life goes on.

As 85-year-old George Kokkinos said: “I’ve lived a long time. I’ve seen a lot. I’ve been through a lot. I’m happy with my life. I’m happy with my family. And so this too shall pass.”

Funding issue for senior citizens' precious day care centre

Elderly pensioners could soon lose access to their precious day care centre at the Nicosia Municipality Multifunctional Foundation if the latter does not receive its funding soon.

The centre, which operates out of the Foundation, Monday to Friday from 7.30am to 2.30pm, relies on state funding, including money from the labour and education ministries, funding from Nicosia municipality, and other EU subsidies.

But the foundation’s principal sponsor is the state and, due to the current financial situation, it, like many other non-governmental organisations (NGOs), is unsure of the future, said foundation head Roulla Georgopoulou. 

“I don’t want to say the centre will close. But the funding it receives is very important,” stressed Georgopoulou.

In recent years the foundation received its funding for each of the services it offers at the start of the annual year. This year, it hadn’t yet received a penny.  

“There hasn’t been a peep about it,” said Georgopoulou.

“We’ve had delays before and once the funding was as late as July, but that was many, many years ago,” she said.

 “We have been contacting the respective departments in the ministries responsible for all the services the Foundation offers, and so far we don’t know if, when and how we will get money.”

As well as the pensioners’ day care centre, the Foundation offers afternoon classes for children and adults, an afternoon child minder service for children aged five to 12, a homecare service for families and/or elderly adults, and social support programmes for immigrants. 

Georgopoulou said each of the services had their own separate funding but that the state and municipality each gave the foundation a lump sum, which it then divided among its services. 

In the case of the pensioners’ day care service, the state funding amounted to €15,000 to €17,000 per year. This amount covered their food and activities such as music lessons, physiotherapy and physical exercise. 

Each pensioner paid €20 annually to attend the day care centre and an additional daily charge of €3 if they wanted to eat breakfast and lunch.

The only silver lining for the foundation was the fact Nicosia municipality, like all municipalities, had been exempted from the haircut. 

“The municipality has confirmed we will get the funding it allocates to us, given it hasn’t lost its savings. However, the municipality relies on money from the state. So again, I don’t know what will happen,” she said. 

Eleni Miliou (L) and Chloe Panayi

Koulla Tabidji

Lella Angelidou

A CYPRUS-BASED company, Mortimer Offshore Services, is engaged in a lengthy legal battle in the US over pre-World War II German Gold Bonds the company says are worth around $9 billion.
According to Avraam HadjiGiovannis, a Business Engineer Consultant who is close to the proceedings, the bonds were bought in the open market from American citizens who had been buying the debt for years over the last century.
These particular bonds, issued by Lee Higginson Trust Company, and printed by the American Bank Note Company, were traded on the US stock exchange. Mortimer began buying up the bonds in the nineties but says Germany refuses to allow encashment.
HadjiGiovannis says the bonds purchased by the company have been authenticated by German government experts on historical securities, Hans Georg Glasemann and Michael Geisel, among others.
The same bonds have been examined and verified by the German high courts as valid and genuine, he said.
Mortimer enlisted the services of major law firms in Germany and the US, Baker Hostetler, Arqis, Baker Mckenzie, SSD, Haag Eckhard Schoenpflug to fight their case.
He filed law suits initially against the German government and then jointly against the major obligor banks.
HadjiGiovannis said the plaintiff seeks a settlement for the outstanding obligations owed for the bonds it possesses. He said the respondents raise defences based on jurisdiction, sovereign immunity, Res Judicata - claim preclusion - and other procedural moves.
“The result is that none of the proceedings to date have looked into the substance of the cases, and the majority of evidence available to the plaintiffs has not been presented to the courts,” said HadjiGiovannis.
“It is the opinion of Mortimer and its legal advisors that the German government has gone to great lengths outside of the public forum to ensure that the US courts are not used as a vehicle to press claims against Germany,” he added.
“Claims for the settlement of these bonds were focused mainly in the US because this was the country in which these bonds were sold, however, as these bonds are international contracts, experts have advised that they can be pursued in other jurisdictions too.”
HadjiGiovannis said the bonds are financial instruments and should not be confused as political instruments. “That means regular financial rules and norms must be complied with, even with the application of government treaties,” he said.
He said these types of bonds and others like them had been the subject of much media attention, research, examination, and litigation for almost a century and the question of how to alleviate unsustainable sovereign debt were not new.
“The company has reaffirmed its intent to continue by legal and commercial means its work of over two decades to overcome the reluctance of Germany to honour her obligations.” HadjiGiovannis added.

THE ECONOMIC crisis seen in Cyprus over the last month will most certainly impact upon the eastern promise of a growing Russian tourism market though opinions within the industry appear to differ over the degree.
One tourism operator who did not wish to be named said he was in Russia recently visiting tour operators and was implored by companies there to pass on the message to the Cyprus authorities to counteract the negative marketing enacted against the country.
“Unfortunately, our competitors are capitalising on our situation, saying we have strikes, people are screaming in the streets and there is general upset and insecurity here. Bookings are down and people are scared,” he said.
Russian tour operators have blocked a lot of airline seats and hotel rooms which they will have to sell. “If we don’t do something quick to turn around the negative image, tour operators won’t sell their bookings and will have to reduce their capacity for next year,” he said.
He gave an example of the negative marketing popping up since the Cyprus economic meltdown: an ad board seen during his trip to Russia warning the Russian public, “Be careful, Cyprus is closing down”.
The ad suggested an alternative “island of stability” where Russians could invest their money, Novogorsk in Russia.
Another example, according to the industry insider, is a popular satire on television which ran a sketch where a man wanted to hire the services of a prostitute. When she asked for €2,000, the man got on the phone to a guy called ‘Pambos’ and the conversation which followed went along the lines of ‘Pambos, what do you mean it’s frozen and I can’t withdraw my money from the bank? I need €2,000 now’.
The tourism source asked: “After we destroyed the Russians and deleted their accounts, what did we really do to bring them back? Many are scared. Now Greece is starting to attract more and more Russians. Before they didn’t have many but soon Greece will replace Cyprus as a popular Russian tourist destination.”
However, there is still time to take action and assure Russian tour operators that it’s situation normal in Cyprus, he argued.
“Unlike the Germans and British, Russians are very last minute, they book two weeks before a holiday so it’s not over yet. The high season is June.”
The general manager of Lordos Beach Hotel in Larnaca had a different view of the impact of the crisis.
“Our experience is a bit different,” said Byron Christodoulides who was in Moscow at a tourism exhibition during that first fateful weekend in March when the Eurogroup announced a haircut on all Cypriot bank deposits.
The flow of bookings subsided a great deal in those first two weeks after March 15, but after hoteliers offered additional discounts for April and May, bookings started returning again, he said.
In terms of Cyprus’ image abroad, the crisis has mainly impacted upon the banking system and those with deposits here not the tourism sector, he said.
He argued that the British market, while still substantial, has been gradually falling, while there is not much hope of seeing another 140,000 German tourists visit the island as they did last year. Russia, on other hand, was the great eastern hope, given the significant increase seen in the last two years.
“Last year we saw a very big increase from the Russian market compared to the year before, and this year, we were expecting a further increase, but it probably won’t happen.”
Christodoulides said it was normal for Cyprus’ competitors in Egypt, Turkey and Greece to make the most out of the situation.
“Obviously, they will try to get people from us, but, in the worst case, if nothing exceptional happens in the meantime, we should have the same numbers as last year,” he said.
The hotel manager said the biggest problem he saw regarding this year’s Russian tourism market was the fact that many tour operators - paying for rooms committed in advance - have had their money frozen or swiped in Cypriot banks.
“Many hotels had sent money, millions of euros, to their accounts in Cyprus a few days before the crisis, which is either frozen or could be lost.”
For those tour operators who managed to transfer the funds to the hotels, this raises a cash flow problem for hotels that are legally obliged to host and feed the incoming tourists without access to their money.
“We’re not sure when the money will be unblocked, so travel agents don’t know what’s going on,” said Christodoulides.
Cyprus Tourism Organisation (CTO) chairman Alecos Oroundiotis rubbished claims that the negative image after the crisis was affecting the Russian market.
“There are 10-12 Russian tour operators bringing people to Cyprus. The programme for 2013 is made in coordination with us and we are working together to increase the inflow. What we can say with certainty is that the programmes are continuing. No tour operator has cancelled bookings for Cyprus.”
Asked whether the crisis would have any impact on the emerging market, Oroundiotis acknowledged there would be some consequences.
Last year, around 450,000 Russians came to Cyprus. This year, the CTO expected to bring 550,000.
“There will still be an increase, but it will be more like 510,000. Is this considered a failure?”
Regarding the issue of frozen Russian tourism funds in Cypriot banks, Oroundiotis was adamant that this was not a problem.
“There was only one organisation that had this problem at the Bank of Cyprus and we made every effort to help them and overcome the problem so they could pay their debts to hotels, airlines etc,” he said.
The CTO chief clarified by help, he did not mean trying to secure an exemption or offer free money, though he would not into further detail.
Oroundiotis said the main aim now was to keep overall tourist arrivals at the same level as last year, at around 2.5 million.
He noted that the British market saw an increase in arrivals in March of 17 per cent.
“Certainly all markets have been affected to one degree or another, but the situation is stabilising. You don’t see riots, or bank queues, or violence. Capital controls are relaxed day by day. I believe we can recover.”

CTO chief Alecos Orountiotis says work is underway to increase Russian tourists

RUSSIA wants to play a bigger part in talks over solving Cyprus' financial problems but will only restructure its loan to the island if its interests here, especially those related to VTB Bank, are protected, Moscow's finance minister said.
Russian banks and companies have poured money into Cyprus since the 1990s, taking advantage of low taxes and relaxed business regulations.
Many of them were caught unprepared when major account holders were told they would lose a proportion of their deposits over €100,000 under a European Union bailout to save the islandy from bankrutpcy.
"We held general talks about the need to increase the participation of the Russian Federation in negotiations over Cyprus, since we are a creditor," Anton Siluanov told journalists on the sidelines of the Group of 20 developed and developing nations meeting in Washington.
Siluanov, who met a series of euro zone and International Monetary Fund officials during the session, added he wanted to look at Russia's role in Cyprus, but in a way that "our interests are taken into account".
Russia granted Cyprus a five-year €2.5 billion loan in 2011 and has said previously it was ready to restructure the terms by extending the credit and cutting interest to 2.5 per cent from an earlier 4.5 per cent.
"We will deliver our support (restructuring of the loan) taking into account our interests, and our interests are that our subsidiary (the Russian Commercial Bank) should operate in normal conditions," Siluanov said.
"It does not require any bailout or financial support. Money of our companies has been frozen there. We would like this money to reach its recipients."
The Cyprus-based Russian Commercial Bank is a subsidiary of Russia's number two bank, VTB.
VTB's management sent a letter to Russia's government authorities in April asking for help in removing the restrictions on its operations in Cyprus.
"In theory, all support the early lifting of restrictions (in Cyprus)," Siluanov said, summing up his meetings with euro zone and IMF officials.
"Next week, there will be another round of talks on the issue, let's see how it will be decided."

THE government urged parties to join it in working together to get the country out of the economic rut, as a raft of measures announced on Friday received mixed reviews.
“We are seeking creative cooperation and not divisive conflict,” government spokesman Christos Stylianides said. “These difficult times are difficult for everyone.”
Stylianides said the government wished to cooperate with all political parties, though it had the first say as the elected administration.
“It does believe however that there is no other path for the common good. There is a place for everyone to contribute,” the spokesman said.
On Friday, President Nicos Anastasiades announced a raft of measures aimed at jump-starting the island’s economy, crippled from the austerity inflicted by an international financial bailout.
In return for €10 billion in international aid, Cyprus' banking sector has been left in tatters by a raid on deposits, known as a "bail-in".
As a result, the banking sector, as a proportion to national output, will shrink to 350 per cent of GDP compared to a previous 550 per cent.
In coming months, the island would turn to energy, but also to investments in tourism through the licensing of casinos, as well as farming, in an attempt to recoup lost ground, Anastasiades said.
Former ruling party AKEL - widely held responsible for the collapse of the economy – said some of the measures were in the right direction, some were vague, while many were absent.
“Included are measures that move in the right direction, a lot of which are already being implemented or their implementation had started by the previous government,” AKEL spokesman Giorgos Loukaides said.
He said some measures were vague while the party disagreed or had reservations about others.
“At the same time a lot of other essential measures are absent, which AKEL is ready to submit” if the government was prepared to listen to the opposition, he said.
Loukaides censured Anastasiades for not consulting with opposition parties on the raft of measures but he “invited them to attend the communications fiesta set up to announce them as spectators and applauders.”
The government spokesman opted not to respond to AKEL, saying it was not a time to be divided.
“Anyone with proposals is welcome to submit them and the government is prepared to listen to them and even adopt them,” Stylianides said. “We will not reject anything directed towards restarting the economy.”
The spokesman said Anastasiades will consult with other parties as more measures were in the pipeline.
Government partners DIKO expressed satisfaction with the measures with its leader saying they could be the basis of the action plan that will bring better days.
The measures, Marios Garoyian said, allocate the burdens fairly, safeguard social cohesion and support vulnerable groups.
Socialists EDEK said the measures were a positive development but they could only be judged when put in practice.
“The most pressing need at the moment is to stabilise the financial system and the real economy to tackle the expected unprecedented recession and unemployment in the next months,” EDEK MP Nicos Nicolaides said.
Finance Minister Haris Georgiades held a lengthy meeting yesterday with the Central Bank (CBC) governor and the attorney-general.
The object was to progress the resolving of Laiki and restructuring the Bank of Cyprus, which has been without a board of directors for weeks after the CBC appointed an administrator to oversee the restructuring process.
“We are working to implement this very important target in the next few days,” Geogiades said, adding that it will be a significant step towards normalising the situation.
The minister said he expected an announcement on the interim board early this week.

Government spokesman Christos Stylianides says this is not time for divisive conflict

IN THE 1990s I used to stand on top of a Venetian rampart in a rubbish-strewn park at Arabahmet and forlornly watch the seemingly carefree traffic whizzing through Paphos Gate. A voyeur in the true sense of the word, I could watch but in no way interact with the scene, unless of course I wanted to attract the attention of either or both of two armies amassed either side of a cease-fire line in one of the most militarised places in the world.
Then, as now, it made little or no sense to me that the two ethnicities of a beautiful Mediterranean town should be divided in such a brutal and absolute way, and I often wondered what would happen if the earth-filled oil drums and barbed wire separating them were taken away. Would Greek and Turkish Cypriots find themselves inevitably, as if by some force of nature, dragged back into war? Keen to find out, I applied several times to the Turkish Cypriot authorities to be allowed to cross the line, but each time was rejected – by whom I never knew, and for what reason, was never explained.
Having given up applying for permission, I was astonished to hear on the evening of April 22, 2003 that the Turkish Cypriot authorities had passed a motion calling for the crossing point at the UN-controlled Ledra Palace Hotel to be opened the following morning. Sheer excitement and the need to celebrate kept me awake much of that night. Everyone around me was equally astounded that what had been kept forcibly hidden from the people for three decades was going to be on show.
I had hoped to be one of the first to cross but by the time I arrived at the Ledra Palace crossing many thousands had already gathered either side of the thin strip of earth policed by nervous-looking blue-bereted UN soldiers. Turkish Cypriots were pressing up against the line where we expected our police to check documents and begin letting us through. They too looked nervous, and more worryingly, seemed to be eyeing us like traitors. The impatient crowd began the now-familiar chant of “Kibris’ta baris engelenemez!” Peace cannot be prevented in Cyprus!
Few knew at the time but the Turkish military - and the Turkish Cypriot police who were (and still are) subordinate to army command in Ankara - had refused to comply with the ruling of ‘parliament’ to open the crossing. As we chanted and waited under a hot April sun, a political drama of historical proportions took place as politicians managed to stand down the military.
What caused the sudden shift in Turkish Cypriot politics and the ditching of its almost North Korean passion for isolation remains a subject of debate even today. One man who should know the answer is Kudret Akay. At the time the crossings opened he was advisor Serdar Denktash, the then ‘foreign minister’ and son of Rauf Denktash. Akay says that despite his father’s virulent opposition to reunification, the young Denktash was staunchly in favour of opening the crossings, and was probably the most active in making it happen.
“I’ve got to give him the credit for that because he had the courage to take the initiative forward,” Akay said last week. He added however that he still didn’t know whether the original idea of opening came from Ankara or north Nicosia.
What is clear however from Akay’s words is that his and Denktash Junior’s objective was to improve the image of the ‘TRNC’, which Akay says was “on the floor” at the time. This coupled with their fear that Turkish Cypriot mass demonstrations - spurred by a banking sector collapse and a growing feeling of political disempowerment - would end up coming face-to-face with Turkish tanks and riot police at the barricades.
“Simply opening the crossings would benefit the north from every aspect,” Akay asserts, but adds that from Ankara’s point of view the legal benefit of allowing Greek Cypriots physical access to their properties in the north was the main factor. This was also what finally persuaded the legally-minded Denktash Senior to allow the crossings to open, Akay says. 
Indeed, many believed the opening of the Ledra Palace crossing was Ankara’s response to a European Court of Human Rights (ECHR) verdict punishing it for its refusal to allow a Greek Cypriot refugee from 1974 named Titiana Liozidou access to her home in Turkish-controlled Kyrenia. With approximately 1,500 similar cases lined up to cause similar damage and expense, Turkey’s newly elected Justice and Development Party (AKP) deduced that by allowing Greek Cypriots physical access to their properties they would reduce the amount the country would eventually have to pay in compensation.
Such things did not concern my group as we headed on foot towards the Paphos Gate that we’d only seen before from behind barbed wire. On the way we exchanged excited greetings with thousands of Greek Cypriots, many of whom were crammed against a fence holding them back from the north. Occasionally, the UN police opened it a crack to allow 20 or 30 people to throw themselves bizarrely toward the Turkish Cypriot police who looked on in utter bewilderment. Behind them a river of cars and pedestrians as far as the eye could see, all eagerly waiting to cross.
After my ten years living in the isolated and relatively impoverished north, I felt revived by the south’s bustling streets, multinational populace and its tidy pavements. I now found it eerie to think that this urbane and affluent Lefkosia shared the same geographical backdrop as the drab soldier-ridden Lefkosa I had just left behind. I felt slightly embarrassed, like a poor cousin visiting wealthy and worldly relatives.
Although I already knew Greek Cypriots from London, this was the first time I found myself in their company in Cyprus. Perhaps more importantly, it was the first time I was in a Cyprus run by Greek Cypriots. I looked back to the Turkish side and wondered whether the Turkish army was concerned for our safety.
Ten years on, it is undeniable that the opening of the crossing achieved some, if not all, the aims Akay spoke of. Aided by the Greek Cypriot rejection of the Annan plan a year later, the wind certainly blew out of the Turkish Cypriot street protests. The heat was also taken out of Greek Cypriot property claims against Ankara; the ECHR now cooperates with Turkey in its running of a property commission in the north that has effectively deflected 1,500 cases stacked against it in Strasburg to the glacially slow courts in north Nicosia.
But whatever the political strategies being played out that day, the impact the opening had on the people of Cyprus was unarguably the biggest single event to take place since the 1974 Turkish invasion.
For me, as it was for many in two generations of Turkish Cypriots, the opening was synonymous with the opening up of a place that we had never seen before. The island was suddenly bigger and better with more choice, more people and broader horizons.
Sociologist Rahme Veziroglu says that this is how it was for her.
“It opened a whole new world with new people, new places, new ideas,” she says. She quickly adds however that for others, particularly refugees with memories of a different life in the south, the opening of the crossing constituted less of an opening, and more of a closure.
“I travelled with a group of Turkish Cypriot refugees living in Famagusta to their hometown of Paphos the day after the crossings opened,” she recalls.
“They had been yearning for this place for a long time, and the day they saw it, they saw it literally scattered and in pieces. Many could not even find their homes”. Their return to Paphos, she said, had ended up being a goodbye visit rather than the joyful reunification they’d clearly been expecting as they sang Turkish and Greek songs in the bus on the way there.
“The bus was silent all the way home,” she says.
Vezirolglu’s words remind me of a young Turkish Cypriot man I saw returning from his first trip to the south that beautiful evening of April 23, 2003. Being a staunch supporter of reunification, Tamac was typical of Turkish Cypriot youth in those days. Seeing him without a smile I asked if his day in the south had not been as enjoyable as mine. He looked at me perplexed and said, “When I woke up this morning I was a Cypriot. When I go to bed tonight it will be as a Turkish Cypriot”.

Police in the north holding back those trying to cross in the early days

WITH everyone’s attention focused on the economic crisis it would not be difficult to overlook another important date on the Cyprus calendar for it was a decade ago Tuesday that the first crossing point opened between the two sides at the Ledra Palace Hotel.
It began with a rumour the eve of April 23, 2003 that then Turkish Cypriot leader, the late Rauf Denktash, would open the self-imposed barricade 29 years after it was created. To everyone’s shock, he did.
People on both sides flocked to the crossing in their thousands and for anyone who remembers, it was a day of excitement, happiness and sadness, and of renewed hope for a Cyprus solution.
For some, those hopes were dashed almost a year to the day later, on April 24, 2004 when the UN solution blueprint, the Annan plan was rejected by 75 per cent of Greek Cypriots.
Ten years later there is still no solution but more crossings have opened, but the whole phenomenon has become part of the mundane.
It is estimated that since April 23, 2003, until today, there have been approximately 8 million crossings by Greek Cypriots and 14 million by Turkish Cypriots to and from the seven checkpoints.
It sounds like a lot. However in terms of regular crossings by Greek Cypriots, the number is only around 10-15 per cent of the population. While Turkish Cypriots cross more to work and shop, the only people who go north by all accounts are die-hard peaceniks and gamblers.
Another recent study found that while 35 per cent of Turkish Cypriots have at least one Greek Cypriot friend, the corresponding figure for Greek Cypriots is only 15 per cent.
While the developments over the past ten years have debunked Denktash’s conviction that the two sides could not live together, neither have they proven the contrary. Similarly, although the number of antagonistic incidents have been inconsequential, opening checkpoints has not resulted in the level of trust needed for a Cyprus solution either.
Proof of this is that a whole decade of more negotiations have yielded nada, and the opportunity to build on what the crossings represented has passed everyone by. Greek Cypriots and Turkish Cypriots are living, if not separate lives, then parallel lives, or as one observer put it: “in mutual indifference”. “They are neither our enemies nor our friends,” another Greek Cypriot said.
Despite the fact that the crossings have not brought the two sides significantly closer together, there is no doubt that it has proved to be a positive step and there are only a few die-hard nationalist voices on both sides that have occasionally been heard to call for them to be closed.
Even though it was not enough to solve the Cyprus problem, the advantages of the open line of communication are clear.  The crossings have promoted contact, albeit to a limited extent. They have allowed many Greek Cypriots to at least visit their long-long homes and lands and provided a form of closure for some, even if it opened up old wound for others.  The crossings have also eased the lives of the enclaved, eased tensions for the most part, and boosted the economy to an extent.
Many have benefited from an increase in trust while for many more – especially Turkish Cypriots after the referendum in 2004 – trust has been diminished.
So while not many people will remember this ten-year anniversary, drowning as we are in financial difficulties,  it is only a matter of months before attention will have to return to the national issue and a new round of negotiations.
The crossing points may not feature much in those talks but they could be built on further if the leaders on both sides were inclined to encourage rather than discourage people from crossing. This applies to both sides equally because ultimately it is not the people of Cyprus who are the problem, it is, and has always been their leaders.