AS MUCH as €3.7 billion was taken out of the island’s banks in March, €0.9 billon in February and €1.7 billion in January, Central Bank of Cyprus (CBC) data showed yesterday.

Overall deposits in March were down 9.9 per cent to €63.7 billion compared to March 2012 when they stood at €70.7 billion, meaning that €7.0 billion left the island in the past 12 months but more than €5 billion of that was removed in the last three months alone.

In March, €3.7 billion in deposits took flight, €1.9 billion from third-country nationals, €1.3 billion belonging to Cypriots, and around €500 million belonging to other EU nationals.

The House Ethics Committee was recently handed a list of 6,000 companies and individuals who removed their money from the island before March 16. That was the day the Eurogroup announced a deposit haircut at Cypriotbanks which resulted in their closure for two weeks, the freezing of deposits, and subsequent implementation of capital controls, which are still in place.

According to CBC figures, deposits held by third-country residents fell in March to €19.03 billion from €21.3 billion in March 2012 and €20.9 billion in February 2013.

Domestic residents’ deposits were down in March to €41.2 billion from €43.4 billion in March 2012 and €42.6 billion in February 2013. 

General government deposits dropped in March by 19.6 per cent on an annual basis to €428.8 million. Total deposits of Cyprus financial institutions’ also fell by 16.3 per cent and domestic household deposits recorded a decrease of 8.5 per cent to €32.7 billion.

Insurance companies and pension funds’ deposits recorded an increase on an annual basis by 12.2 per cent in March 2013, reaching €4.3 billion. 

Loans to Cyprus residents came up to €54.29 billion in March 2013 from €52.08 billion during the same month of last year.

Loans to third-country residents reached €12.28 billion in March,  down from €12.67 billion last March and €13.54 billion in February 2013. 

Eurozone residents’ loans stood in March at €3.83 billion, up from €3.17 billion on an annual basis but down from €4.79 billion in February 2013.

In addition, Central Bank data showed that consumer loans were at the same level in March 2013 in relation to March 2012 at €3.5 billion. 

Total housing loans came in March this year to €14.67 billion down from €15.09 billion in March 2012, marking a slight fall of 0.9 per cent.

WHEN IT comes to grand, but ultimately meaningless, initiatives nobody can compete with the political parties. Nothing illustrates this practice better than AKEL’s proposal for the 25 per cent reduction of rents on premises, housing small to medium enterprises (SMEs), for the next 12 months. The proposal has the support, in principle, of all the parties none which would want to be seen to oppose the lowering of rents.

Deputies at the two House committees which had a first discussion of the proposal, said they would approve the law even after a representative of state’s legal service pointed out that such a law would be a blatant violation of article 23 of the constitution safeguarding the use of private property. The reaction of an AKEL deputy was to ask whether the haircut of deposits, nullifying shares and freezing bank accounts was constitutional.

It beggars belief that lawmakers, could show such disregard for the constitution, and argue that they have the right to knowingly violate it, because the deposits bail-in was, in their view, unconstitutional. Will lawmakers now view the bailout deal as a licence to violate the constitution? And why should anyone respect the constitution and the laws when deputies adopt such an irresponsible attitude?

It is not even as if there is a need for this law as the market has pushed rents downwards long before AKEL’s deputies decided to pose as the saviours of SMEs. With many businesses being closed down as a result of the recession there is an excess supply of shop and office space which has been pushing rents down for some time now. The forces of demand and supply have lowered rents and will continue to do so, without the need for any political intervention and unconstitutional laws.

But populist deputies have to be seen to be doing something to help small businesses. For the members of AKEL, which is ideologically in favour of interventions in the market, a rent law would be an opportunity to make some political capital. It might even fool some voters into believing that the party, the decisions of which, over the last five years, destroyed SMEs wants to protect them. 

But it will require a lot more than a misconceived, unconstitutional law on rents to repair the damage done to SMEs by the AKEL government’s criminal mismanagement of the economy. But instead of pointing this out, the political parties joined in this ridiculous charade becoming cheerleaders of the communists’ vacuous populism.

THE BANKS and Mari disaster caused the destruction of the Cypriot economy, said former finance minister Charilaos Stavrakis yesterday before the committee of inquiry tasked with probing the circumstances which led to the near collapse of the economy and banking sector. 

Auditor-general Chrystalla Georghadji, who also testified before the committee, had a different take. 

She concluded the lack of responsibility, disdain for the law and state institutions and cronyism plaguing the country made Mari and the current economic crisis “almost inevitable”. 

Speaking before the three-member committee, Stavrakis said: “Mari and the banks broke the Cypriot economy.”  

He argued that the previous government in which he served as finance minister for the first three years had taken significant measures to tackle the onset of the global economic crisis in 2008. 

Stavrakis highlighted that the European Commission rated the government package of measures in 2008 and 2009 as timely and targeted. 

However, he acknowledged: “Had I known there would be the Mari explosion, with its enormous damage to the economy, and the losses of the banks, we would have taken more measures.” 

According to the former minister, there were times when he did not get the response he would have liked regarding further measures from the government and cabinet. 

On the other hand, the political parties in parliament rejected a significant number of measures proposed by the government like the corporate tax rate increase from 10 per cent to 11 per cent and an increase on immoveable property tax, he argued.

Both of which have now been increased as part of the memorandum agreed with the troika.  

Stavrakis, who has come under recent criticism for perceived shortcomings during his term in office, including an overreliance on short-term borrowing instruments, blamed today’s economic woes on the huge size of the banking sector, the banks’ losses and inadequate supervision by the Central Bank of Cyprus (CBC).  He blamed former CBC governor Athanasios Orphanides for not preventing the purchase of Uniastrum Bank by Bank of Cyprus at an inflated price. 

The former banker highlighted that the finance minister has no institutional regulatory powers over the banks, unlike the CBC. 

Defending his track record under the previous government of Demetris Christofias, Stavrakis described as a “myth” allegations that the increase in social benefits implemented by the last government had caused problems in the economy. 

The €400m increase in spending on social benefits during 2008-2010 was “a drop in the ocean compared to the €10 billion in banks’ losses”. 

He argued that he constantly fought to keep costs down, hence his vocal opposition to building a Cultural Centre and Paphos-Polis highway. 

Stavrakis acknowledged that he had made recommendations to cabinet which were rejected. 

On state finances during 2008-2010, he argued that public deficit and debt figures were below the EU average. During that period, Cyprus’ average public deficit was 3.45 per cent while the eurozone average was 3.9 per cent. The European Commission’s public deficit target for 2010 for Cyprus was 6 per cent. The country recorded a deficit of 5.3 per cent. Public debt during the three-year period increased by 1.3 per cent, while the eurozone recorded a 15.2 per cent increase. 

“These are not indicators by which a country goes bankrupt,” he said.  

“There is the (wrong) impression among the public that the economy was on autopilot for three years,” he said, listing achievements like taxes imposed on bank deposits, ‘privileged’ golf courses, abolition of multiple pensions, reduced civil service, and the signing of a double taxation agreement with Russia.

Cyprus lost the confidence of the international markets in May 2011, he said, noting: “From November 2010 when we borrowed €1 billion with 3.8 per cent interest until May 2011, public finances had not changed.” 

What had changed was the gradual realisation by markets that Cyprus had the biggest banking sector in the world with great exposure to Greece, he added. 

Meanwhile, before Stavrakis was called to speak, the country’s auditor-general gave a candid and blunt account of the sorry mess the country is in, something which has become her trademark.  

“In a country characterised by impunity, cronyism, fear of taking responsibility, dodging responsibility, disdain for the law and certainly the institutions, I believe a human tragedy like Mari and the economic tragedy we see today were almost inevitable,” said Georghadji. 

Georghadji., who has been in the job since 1998, submitted her Office’s reports on state finances from 2002 to 2011 as evidence. 

Asked by committee chair Giorgos Pikis to comment on reactions to her many proposals and observations in her reports, she said unfortunately they were not given the necessary attention, and were usually kicked down the road by the relevant official. 

“We observe that the responsible minister or chair of a semi-government organisation tends to instruct his colleagues to handle the replies. The common response given is that the proposal will be considered in the future. There is usually no disagreement with the proposal.”  

In some cases, only after persistent requests, some proposals are adopted. She gave as example the need to collect money owed from 160,000 pending warrants worth €135 million, most of which is owed to state. 

Some of these warrants were pending for ten years or more. Despite mentioning this over and over again in her reports, the police failed to do anything about it. 

A further examination by her office found that a large number of warrants involved police members, public officials and civil servants. 

In another example, her office found that people living a certain high life and owning valuable property either did not even have a tax file with the IRD, or declared much lower incomes.

The state is currently owed €1.6bn, of which €950m is owed to the Inland Revenue Department (IRD).

After many efforts by her office, the IRD has finally been given access to data from other government departments, helping them to carry out their job more effectively, she said. 

Georghadji highlighted the public money wasted on employees’ salaries in public or semi-public organisations which are long past their sellby date.  

On education, she questioned why a teacher works fewer hours as they get older, without changing their rank. 

“We asked on what logic this was based? The response was not convincing.” 

Regarding the economy, she highlighted that in recent years, as a result of spending more than it collects, the government increased the public debt, and adopted “a policy of short-term borrowing to cover long-term needs”. 

Asked about excessive spending in the public sector, Georghadji said one sector were corruption was possible was that of tenders. 

There are a number of references in her reports on tenders’ procedures where bidders are identified, or the tenders are made in a way which doesn’t save the state money, or materials are purchased beyond our needs, she said.

The state spends €30m a year on rent, despite the fact some buildings are not used for months or years. Money is spent on study after study for various projects that are never implemented, but remain gathering dust on the shelf. 

Institutions and organisations are created and staffed with highly paid personnel to carry out work that never gets carried out, “like the cultural centre”, she said.  

Georghadji had some choice words for local authorities, singling them out for having a bloated staff, which is hired based on party political lines. 

“All this evidence of cronyism, party interventions creates a very negative climate,” she said. 

Also, the fact that 96 per cent of public servants are evaluated with the ranking “excellent” by their superior does not encourage meritocracy, she added.

Bureaucracy is “not only due to detailed laws and a lack of flexibility, but unfortunately due to a culture of staff not wishing to lose their power and wishing to show at every stage their power”.

Former Finance Minister Charilaos Stavrakis (right) at the committee of inquiry session in Nicosia yesterday where he was called to testify (Christos Theodorides)

WORK on a multi-million euro mansion being built in a prime location in Pissouri has been ordered to stop by the Limassol district office. 

Residents have long been up in arms over the construction of the supersize house which is being built on 2,200m2 of land on a small hill overlooking the village’s picturesque bay and blocking hitherto unspoiled seaviews for many villagers. The Russian owner has also purchased an extra 17,000 m2 in front of the house stretching right down to the beach.

The protests were highlighted in the Sunday Mail over a year ago. At the time, while admitting the construction has been the subject of many complaints, local officials insisted the owner was following all planning permission specifications.

But last week, the Limassol district office confirmed that work has been ordered to stop because construction has deviated from the original plan. 

“There are differences from the original plan,” Charis Zachariou of the Limassol district office told the Sunday Mail. “We have informed the architect that they must make new plans which must be submitted to receive a new licence to cover the work which has been done.”

Zachariou said that the file concerning the construction would be passed onto the relevant department to study, along with proof that a new application has been made to the town planning department.

“We give people time to obtain everything, but if not, they may proceed with court action,” he said. But he did add that the changes appeared to be minor.

The unfinished house has meanwhile been listed for sale on an international property website www.world-estate.com for 28 million euros.

Disgruntled residents have sent letters of complaint to numerous authorities including Limassol town planning office, Limassol district office, the mayor of Limassol, the Green party and the commissioner of the environment.

Their main complaint is that the building exceeds height restrictions and that it is an eyesore which changes the entire picture of the bay. 

Dietmar Koerner - a 75-year-old German resident - is one Pissouri homeowner who has spearheaded the campaign. 

“Many tourists in the Columbia Bay Hotels and on the Pissouri Beach have asked me and are still asking how such a monstrous construction - a demonstration of big money - found the approval of the respective authorities,” Koerner said.

A spokesman for Anthimos Ioannou of Alpha Ioannou construction Ltd, which is based in Paphos and is responsible for the project, insisted that all the plans had been approved by the relevant authorities and that nothing illegal had taken place.

The construction company wouldn’t confirm if they had received a letter from the district office ordering them to stop but said that work on the project is still underway.

A local representative for the Russian owner also insisted that all permits as required by law were in place.

“We haven’t done anything which isn’t legal,” said the representative who did not want to be named.

He added that the owner could build as many houses “as he wants” on the extra 17,000 m2 in front of the existing construction.  

“The house will be beautiful when it’s finished and I think he plans to make the rest of the land into a garden; I don’t think there are plans to build any more houses at the moment,” he said.

The representative wouldn’t confirm that the house was up for sale despite it being listed on the property website 

According to the website, the plot for sale covers an area of 2200 m2 with the main villa covering 1400 metres.

“The owner has already obviously lost interest in his palace because it is now for sale at a price of € 28 million - or maybe it was his objective from the beginning only to make more money,” said Koerner.

“This building is grotesque and out of place here. It has totally ruined the entire area. I know suggestions were made to the Russian owner at the first stages that a building in context with the natural surroundings would be more appropriate,” said a British expat resident who wishes to remain unnamed.

“But instead of building a more modest structure created out of locally sourced natural materials such as stone, he chose to build a hideous marble eyesore. The authorities should never have allowed this to happen. It’s a disgrace.”

Pissouri residents view the building as an eyesore that blocks their view of the sea

We asked a random selection of people – both Greek and Turkish Cypriots – whether they’ve taken advantage of the open checkpoints during the past 10 years, and whether they feel it was a good idea.

Five years ago, hunger linked to poverty was virtually unheard of in Cyprus. 

Today, over 2,000 families living in the 40 parishes under the Archbishopric of Nicosia, alone, would go hungry each month if it weren’t for the Archbishopric’s community grocery. 

Set up in May last year, by Archbishop Chrysostomos II, the community grocery went from feeding 500 families 11 months ago, to over 2,000 families today.

Monthly the grocery supplies each family with pasta, bulgur wheat, cereals, orzo, UHT milk, corned beef, canned chopped tomatoes, flour, sugar, rice, lentils and haricot beans. Every two to three months, each family receives a litre of cooking oil, and at Christmas and Easter, two kilos of meat. 

The Archbishopric foots the bill for the foodstuffs, which are then distributed by each parish priest to each family for free. This month the order cost the Archbishopric €80,000. 

“The grocery started last Easter when the Archbishop learned from talking to several priests that there was a problem in their parishes. We started with 500 families and then by June the number of families [in need of food] went up to 600. Every month this number goes up,” said Panayiotis Panayiotou, who oversees the overall management of the grocery. 

“Since the crisis began [March 16] we have had another 400 permanent families added [to the monthly list] and we also supplied food to about 80 families and pensioners who didn’t have credit cards and couldn’t access any cash from the ATMs when the banks were closed,” he said. 

Panayiotou said the grocery also supplied food to around 200 families in parishes in the Metropolis of Morphou and Kyrenia and Trimithoundos, as they did not have their own community grocery. 

Panayiotou said the parishes supplied food to any family in need, regardless of race, creed or colour. 

“We have been accused of a lot of things lately but they are untrue. The Archbishop has made it clear to all the priests in the parish that the community grocery is for any family in need. The families just have to go to their [Orthodox] parish priest asking to be put on the monthly list for foodstuff supplies,” he said.

Panayiotou said the family would have to explain their circumstances and why they needed to be put on the list and that the priest would then inform the Archbishopric, which would then increase its food orders for the following month.

“The Archbishop knows that we are a proud people and he has told all his priests that they have to go knocking on people’s doors in all their parishes and to see who is in need. There are some families that are going hungry and they are too ashamed to admit it. The Archbishop wants to reach out to those families,” he said.

The 33-year-old, who is employed by the Archbishopric, is responsible for the monthly foodstuff orders and ensuring the deliveries arrive on time so that they can be distributed to the families.

Panayiotou is clearly under a lot of pressure to deliver each month and becomes visibly and audibly agitated when he has to stop the interview to take a call from one of his suppliers who informs him that the oil he promised to deliver, is actually going to be a week late.

This information is not good enough for Panayiotou, who has promised the families the Archbishopric feeds they will be receiving oil with their next delivery. 

“You told me you would have it delivered on time. You’re going to expose the Archbishop,” he shouts down the phone, pacing up and down the courtyard of the traditional Cypriot house where the grocery is located. 

The grocery receives its first deliveries by 6.30am and by 8.30am the place is a hive of activity. The day to day running of the grocery is managed by Mamas Papapetrou, who is also employed as a restorer of Byzantine antiquities at the Archbishopric. Together, volunteers, Archbishopric staff and delivery men offload boxes upon boxes of foodstuffs. The items are sorted and stacked in rows where they will remain until they are collected by each parish priest each month. The families then go to the parish priest and take delivery of their food items, while the 200 families in the other Metropolises that the community grocery supplies, collect their foodstuffs directly from the community grocery.

Panayiotou said the grocery had also received a lot of supplies from the recent Cyprus Aid concert in Nicosia which it would be distributing to families, including baby food and nappies. Food companies also donated foodstuffs near their sell by date which the Archbishopric undertook to distribute, he said. 

Papapetrou, aged 50 and himself a Kyrenia refugee, admitted that he could never have imagined the hardship people were suffering in Cyprus and the number of families in need of food. He said the majority of families had no income because both parents were unemployed or one was unemployed and the other suffered ill health. 

“It’s getting worse every month. There was a woman who came to us once and she was homeless. She told me that she hadn’t slept in a bed for eight days and that she went to the hospital saying she was sick in the hope that they would admit her and that she could sleep in a bed for a few hours,” said Papapetrou. Turns out the woman not only got a bed to lie down in, but she was also diagnosed with pneumonia, he added.

Papapetrou said things were worse than 1974.

“At least then you could go abroad and find work as a labourer to feed your family. Now, even abroad it’s hard to find work, with employers’ preferring to find cheap labour elsewhere,” he said. “If you’re a professional or a manager, it’s easier to find work, but for simple, working class people it is much harder now,” he said.

But the Archbishopric did not only feed families, added Panayiotou.

Since November 2012 it collaborated with school boards and supplied a sandwich and fruit juice to 1,500 students from primary to lyceum school level whose parents could no longer afford to give them money to buy a snack at break time, he said. Only the school board and canteen knew the names of the students and the Archbishopric merely supplied the funds. The students in question then went to their school canteen counter and were given their sandwich like any other student without being singled out in any way, said Panayiotou. 

Panayiotou admitted that this, as well as the community grocery, was a costly project the Archbishop had undertaken but that it would continue indefinitely, as long as people were going hungry.

“Imagine how bad things have become if a parent doesn’t even have €2 anymore to give their child to buy something to eat a school,” he said, before he was off taking more calls from suppliers and ensuring the deliveries arrived on time. 

Stacks of basic foodstuffs piled up and ready for distribution

A delivery of haricot beans is made to the storeroom near the Archbishopric

Mamas Papapatrou is in charge of the day-to-day running of the grocery where food is piled up and made ready for distribution

Mugged: 

A 52-YEAR-OLD man in Nicosia reported to police that at around 8.20pm on Friday he was attacked by two men who managed to rob him of €100,000 in cash and cheques. According to reports, the man had parked his car in the yard of his home when two men attacked him, spraying him in the face with a harmful substance and hitting him with an unknown object. They then opened the back door of the car and took his bag which contained €30,000 in cash and €70,000 in cheques. Nicosia CID is investigating the case.

Gun found

POLICE found an airgun late on Friday evening in a field in the village of Chloraka in the Paphos district after being tipped off by a local. After carrying out investigations, officers located a 40-year-old man who was believed to be the owner of the weapon. He admitted to purchasing it from a foreigner for €110 after police questioned him. He was written up and released.  

Firecrackers 

POLICE confiscated 121 firecrackers, belonging to a 16-year-old boy from the house where he lives in the village of Konia in the Paphos district on Friday. The teen was written up by police and released. Police are continuing their campaign in the run-up to Easter to confiscate firecrackers in order to avoid severe injuries over the holiday period.

Robbery 

A ROBBERY took place yesterday at around 5.10am at a bakery in Limassol when a masked man took €600 from the  till, police said. A spokesman said the man was described as being between 25 and 30 years old, 1.80m in height, of thin build, wearing a sweatshirt and blue jeans. Limassol CID took evidence from the scene and is investigating.

PIRAEUS Bank will cover parking costs for municipality parking in Nicosia and Limassol over the holy week in an effort to revive the market.

Executive Board Director and General Manager of Piraeus bank Cyprus Ltd George Appios said the slogan would be: ‘Now we will all go to the city centre’.

“We are convinced this will help the market and give shops a significant boost in both cities,” he said.

Nicosia mayor, Constantinos Yiorkadjis: “This contribution will support shops in the city centres, attract people to the cities where they can shop, attend church and have family outings. It will also help boost the commercial market.”

The deputy mayor of Limassol, Savvas Stouppas said Piraeus bank had given €15,000 to the municipalities to pay for the free parking used by the public.

Municipality parking in Nicosia will be free at the following spots: D’Avila Moat, Tripolis, Kostantza, Phaneromeni underground parking, Solonos Street, Ledra Street multi-storey parking, Ariadnis, Mykonou, Costis Palamas, Podokataro, Grivas Dighenis, Ayios Antonios Market, Pentadaktylou, Municipal Swimming Pool, Simonidou Street and Alasias street.

Municipality parking in Limassol will be free at the four parking lots on the seaside road, the parking place on Andrea Themistokleous street and the parking place on the corner of Ipirou and Kyriakou Oikonomou street.

The free parking will run from April 29 until May 5.

THE LUXURY cruise ship the MS Europa anchored off Kato Paphos yesterday at 8am, the fourth stop on its itinerary, after setting off from Dubai and passing through Abu Dhabi and Egypt’s Sharm El Sheik. 

The ship was due to leave Paphos at 4pm yesterday, destined for the Greek islands of Rhodes and Symi before weighing anchor at its final destination of Valetta in Malta. The Europa’s 337 passengers had the opportunity to visit the harbour and other sites in the area. Paphos Mayor, Savvas Vergas said he would offer all possible assistance and services to visitors, so such visits might take place in the future, adding that the Europa was one of the largest cruise ships around.

The Europa is owned and operated by the German company Hapag-Lloyd. It is the fourth ship to be named Europa in the company's history. For twelve years in row, the MS Europa was awarded the title "best cruise ship in the world" by cruise experts Berlitz.

The Europa was designed as a sleek, streamlined luxury cruise ship.It was one of the first ships designed with the ABB Azipod propulsion system, implemented to reduce vibration towards the stern of the ship. 

Being designed as a luxury ship, all of the Europa’s cabins are described as suites. There are 204 suites and of those, 168 have their own private veranda with the largest suites measuring 915 square feet, and the smallest 291square feet.

The Europa: One of the best cruise ships in the world was at Paphos harbour yesterday

TROUBLE struck during party elections for ruling DISY in Paralimni yesterday when angry members and other locals moved the voting boxes and threw ballot papers into the street to protest against campaigns to stop illegal poaching of songbirds, or ambelopoulia.

The voting was taking place islandwide to elect three vice-presidents to the party, after new DISY leader, Averof Neophytou, and new deputy head Lefteris Christoforou were unchallenged for their new positions within the party.

Neophytou and Christoforou headed for Paralimini after the trouble broke out.

They attempted to ease tensions but were verbally abused by locals and DISY members.

The protest was aimed at preventing people from voting after police and bird activists had recently stepped up campaigns to stop the illegal poaching of ambelopoulia in the area. The protesters said it was unthinkable that just anyone could enter their property and search for bird traps. They labelled the government a police state. 

Neophytou intervened and assured the angry locals that activists would stop their actions, with only police enforcing the anti-poaching laws from now on. This enabled the voting station to re-open, although unlike the other stations which closed at 6pm, the Paralimni one closed at 8.30pm.

Christoforou called on all DISY members to go and vote so the voting process would go smoothly.

The voting process began at 9am and ended at 6pm at 77 different voting stations, four of which were in Athens, Thessaloniki, London and Manchester. The result was expected later yesterday evening.

Fourteen candidates were vying for the three positions of vice-president of the party including MPs Stella Kyriakidou, Andreas Kyprianou, Costas Constantinou and Andreas Michaelides. 

Former party leader, President Nicos Anastasiades took part in the process, casting his vote early yesterday morning in Limassol. Speaking afterwards, Anastasiades said he believed that political life needed to modernise, that the government needed to become more creative and that all the political powers on the island needed to unite in facing the tough times ahead.

“At some point people leave office and are replaced, deservedly so but what I wish is the continuing creative presence of DISY and its policies, both reflecting the confidence of the people to the party, and towards all the political powers,” he said.

Paralimni is a hotbed of illegal bird trapping

AS RECENTLY as three months ago most men were willing to have their testicles chopped off, donate a kidney to comrade Tof and sign a life membership of AKEL for the chairmanship of the Bank of Cyprus, Kyproulla’s biggest, richest and mightiest company.

But today, if they had a choice, most guys would rather shovel muck on an Aradippou pig farm in 40-degree heat, than sit in the soft-leather, executive chair of the chairman’s wood-panelled, air-conditioned office on the top floor of the bank’s marble and glass Nicosia premises, eager secretaries queuing up to pamper him.

Who would have thought, a few months ago, that the country would be looking for someone to put in charge of the venerated B of C and all the leading citizens approached would reject the offer, faster than they would turn down a starring role in a porn movie.

The only job worse than chairman of the B of C, for which not even an all-purpose saviour like Lillikas has offered his services, is president of the Republic, but we have someone to do that for the next five years.  

A few of the tasks the new chairman has to look forward to during his temporary term is keeping the beleaguered bank afloat, informing uninsured depositors how much of their money would be nicked by the bank, boosting staff morale which is at rock-bottom, sacking 2,000 employees, imposing pay cuts and facing death-threats from homicidal local and foreign customers, furious about the bail-in.

And all this without actually being the big boss, because he will be taking orders from the bank’s administrator, appointed under the resolution law by the ECB’s local enforcer, Professor Panicos to oversee the restructuring of the once great bank.

HOW UNFORTUNATE that the one heroic fool (his words) willing to accept the B of C chairmanship - our good friend the Famagusta Mayor Alexis Galanos – was deemed ineligible for the post by Attorney General Petros Clerides, who insists on full compliance to the letter of the law, except on the odd occasion when his son is caught driving over the alcohol limit.

Clerides had initially given his go-ahead to Galanos’ appointment, but then he read the law and changed his mind. Apparently, the Cyprus Stock Exchange law prevents elected officials such as deputies and mayors from chairing companies the shares of which are traded in the stock market, because they may have access to privileged information. 

It did not occur to him that since the restructuring decision, the B of C’s shares cannot be traded on the CSE, for the simple reason that they are currently owned by no-one. The old shareholders have relinquished ownership which would be passed to the uninsured depositors, once the bail-in is finalised in three or four months.

There is no risk of insider information but for our AG, as we know, there can be no compromises or discounts when it comes to the enforcement of the law. 

IN THE END, even a do-gooder, heroic fool, like Galanos, was not willing to give up the mayorship of an imaginary municipality for the sake of a four-month stint as chairman of the transitional board of the bank of sorrow.

Unable or unwilling to designate a chairman, Professor Panicos decided to follow the accepted practice and leave the decision to the board. On Friday the Central Bank announced the 14 members (why did an interim board with so few powers need so many members?) of the interim board and said that they would elect the chairman.

But what if none of the board members wants to be chairman? In such a case they could have a draw and whoever picks the ticket with ‘C’ written on it becomes chairman. Even fairer would be to have a darts competition and the person with the lowest score would be declared chairman. 

IS THERE any good reason why Hellenic Bank and the co-ops would be re-capitalised with the taxpayer’s money? About 15 per cent of the €10 billion loan the state will receive would be used for the capital needs of the co-ops, which the previous government and Professor Panicos were assuring us were in rude good health.

As Avraamis, a skettos drinking customer said a few days ago. “It is said the co-ops would need a billion, but this figure is based on the estimates made by the co-ops. The audit by independent auditors, which has never been undertaken and is now a troika demand, will reveal much bigger capital needs and make a bail-in of co-op depositors a real possibility.”

This should surprise nobody, considering that most-co-ops are run by Akelites as “socio-economic institutions with anthropocentric orientation,” which is another way of saying that they are not at all bothered about non-performing loans or making bad debt provisions.

AND WHAT about the Church’s Bank, which was also supposed to be doing fine and not in need of financial assistance? Why has the EU procedure not been followed in this case? 

Somehow I doubt the Godless fascists of the troika wanted to protect Church interests. But our government may have wanted to do so and decided to recapitalise Hellenic through bailout funds to prevent its restructuring, which would have led to the Church losing all its shares in the bank.

This may go a long way in explaining the staunch public support Archbishop Chrys has been giving President Nik, at every opportunity. Chrys has become Nik’s most zealous disciple treating him like a Messiah and making everyone wonder why he had forgiven him for his despicably unpatriotic positions on the Cyprob and sinful pro-Annan plan past.

Forgiveness and undying loyalty were the least the grateful Chrys could have offered Nik after what he had done for Hellenic.

THE HEAD honcho of Greece’s Piraeus Bank, Michalis Salas was in town recently to prepare plans for increasing his bank’s share of the local market. With the B of C struggling and having lost public trust and Hellenic needing assistance, Salas justifiably sees big expansion opportunities in Kyproulla.

You would have thought he would have avoided coming for the kill in Kyproulla, after Piraeus picked up the B of C and Laiki operations in Greece for almost nothing. The uninsured depositors of Cyprus paid for the B of C losses in Greece and Salas took the bank’s Greek branches with a clean bill of health for peanuts, further strengthening his banking group.

Now he will work on further reducing the size of the Cypriot banks, as a show of gratitude to the fascists of the troika, on whose instructions Laiki’s and B of C’s Greek branches were donated to Piraeus. Salas has reportedly agreed big advertising budgets with local media groups, as part of the plan to corner the Kyproulla market. This is no bad thing for the struggling media, considering our banks that were the biggest media advertisers now have no dosh to spend. 

Even if they had money to spend, what would they advertise, the fact that depositors can withdraw as much as €300 a day for their account?

THE SECOND member of the committee of geriatric pensioners appointed to investigate the causes of the economy’s bankruptcy, Panayiotis Kallis, resigned on Monday, citing a possible conflict of interest with his sons’ law practice. 

He lasted a bit longer than Yiannakis Constantinides who resigned a week after his appointment for health reasons and was replaced by another septuagenarian former judge. Kallis was replaced by another former judge Iliana Nicolaou who also served as Ombudswoman and is also no spring chicken. 

The big question is why Nik insists on appointing superannuated, former judges with low energy levels and limited understanding of economics on a committee with a brief to establish the causes of the economy’s collapse.

SPEAKING about his decision to resign, Kallis also took a swipe at AKEL chief Andros, who had been publicly attacking the committee in an attempt to discredit it and intimidate those who were called to give testimony. 

The cunning commies, like everyone, know who the main cause for the country’s bankruptcy was and hope that by undermining and discrediting the committee from now, it would be easier to question its findings. Andros claimed the committee was being directed by the justice minister and pleaded that politics should not be criminalised.

But why should politics not be criminalised? So that inadequate, incompetent, dumb, corrupt demagogues could be free to destroy the country with impunity? Not only should politics be criminalised but we would urge deputies to introduce the death penalty for crimes perpetrated against the country by politicians.

WE MAY be bankrupt as a state, our banks are struggling to stay afloat, people have no money, newsagents are selling single cigarettes for 20 cents but some things never change.

I was disgusted to hear that the government agreed to pay Cyprus Airways employees, who would take early retirement as part of the latest rescue plan, 50 per cent more in compensation than they were entitled to by law. It had to reward pampered CY workers whose obscene salaries, absurd benefits and work to rule practices made the airline insolvent.

Nik’s government, which our establishment had foolishly hoped would change things is not behaving much differently to its populist predecessors. The measures for kick-starting the economy announced by Nik 10 days ago could have been formulated by AKEL as there was a heavy emphasis on creating more jobs for parasites.

Some 800 labourers were to be hired by the state on contracts, some 500 state school teachers would have their annual contracts renewed in September and best of all – 300 graduates of military academies would be hired by the National Guard, to sit around and do nothing, like the rest of the army officers. Can the taxpayer really afford to pay the salaries of another 300 junior officers that the National Guard most definitely does not need?

The promise to restructure the public sector is another promise Nik does not look like keeping. Unless having more officers than soldiers in the National Guard is his idea of restructuring.

THE MOST reliable economic forecast for 2013, as regular customers may remember, was made by my greengrocer who predicted last January that “the only certainty for this year is that we will not go thirsty.” His assumption was that not even the disaster-prone, prominent incompetent Tof could cause dams that were full to capacity to empty. 

A few weeks ago we were discussing the catastrophic developments, as I was choosing tomatoes, lightly squeezing them to ensure they had the right consistency, and inevitably the conversation returned to the village idiot who had been running the country for the previous five years. 

Just as I was stating the bleeding obvious, “he was, is and always will be a gaaros” (ass in the Cypriot dialect – from gaidouri - often used in reference to people of low intelligence, judgment and sophistication) a middle-aged man entered the shop and smilingly, told the greengrocer: “I bet I know who the gentleman is talking about.”

We all had a laugh, and I explained that I had referred to Tof as a “gaaros,” because I was in an unusually generous mood and that the word did not even begin to describe what I thought about the guy. 

The man agreed and said: “He destroyed the country; I just cannot believe how useless and stupid he was. He just sat back and allowed the country to collapse. We, members of AKEL, feel ashamed and everyone is quite rightly accusing us.”

I was very pleased that there are open-minded Akelites who disparage comrade Gaaaaros in front of perfect strangers and express shame for what he had done. When the man left I asked the greengrocer who the guy was and he informed me that he was involved with AKEL and Omonia but was a good chap.

“He is not one of those Akelites with a sick mind,” he explained. 

WE SHOULD be careful what we write about the comrade because last week his lawyers filed a libel suit against the CyBC and its presenter who uses industrial quantities of hair dye, Yiannis Kareklas. Tof took offence at a remark made by Kareklas in an interview of Nice Nik, before the elections.

Nik said that Tof was ‘clueless’ in accepting the haircut of Greek government bonds and Kareklas memorably asked: “Clueless or stupid?” The diplomatic Nik did not respond to Kareklas’ rhetorical question, even though everyone knows the answer is ‘both’.

Tof is demanding damages of between 100 and 500 grand for “defamation, libel and damaging lies,” according to Alithia. 

Will he take an IQ test to prove to the court that he is not stupid, because all other evidence supports the opposite? 

The Committee of Inquiry into the economic collapse: practically changing members every second day

FINANCE minister Haris Georgiades surprised many people on Tuesday when he said he hoped that currency controls could be lifted within the next few weeks. He conceded, in an interview with Reuters, that it could take a little bit longer, but “definitely not six months”, adding, “I am optimistic we shall be able to proceed much sooner.”

He had to be optimistic to believe controls could be lifted much sooner, but to entertain the idea they could be lifted within the next few weeks verges on the unrealistic. While Georgiades’ eagerness to bring back pre-bail-in, banking practices is understandable, as this would constitute a return to normality, it is very difficult to see how it could be done in the current climate. 

However, the government took another step in this direction on Thursday with a new decree that increased the maximum amounts that companies could transfer from one local bank to another as well as abroad, for commercial transactions. More importantly, it scrapped the applications to the special committee of the Central Bank for approval of standard commercial transactions overseas. It also raised the monthly limit on money being transferred abroad by individuals and eased the restrictions on individual spending abroad. 

After the issuing of the decree the Central Banker in charge of the capital controls, made pleas through the media urging people not to abuse the easing of the restrictions. It was an indication that the authorities were not entirely sure of the way people would react and these fears are certain to arise every time controls were eased; the troika, according to reports was opposed to the issuing of the latest decree. 

Under present circumstances, the complete lifting of controls in the next few weeks or months would remain a big gamble as it could still spark a bank run and cause a total collapse of the banking system. Would the minister be willing to take such a risk in the slim hope that it would bring back normality? Could he be certain that thousands of depositors would not rush to take out all their money from the banks and keep it at home where it would not be in danger of bail-ins and haircuts? A couple of hours after opening without any controls, banks may have to be closed down again for the outflow of capital to be stopped.

Before any thoughts of lifting all currency controls are entertained a very big and difficult problem must be tackled – the complete lack of public trust in the banking system. It is non-existent at present and without it banks need to be protected by strict controls. Will the public’s trust and confidence in the banks be regained in a few months or could years be needed to mend the damage caused to the system? 

The signs are not good and neither the government nor the Central Bank has been helping the reverse the negative climate. The Central Bank will not know by how much Bank of Cyprus’ depositors will be bailed in, before the end of June. Meanwhile the government spokesman keeps telling people that the Bank of Cyprus “must be saved,” thus implying that it is still at risk. To make matters worse, it had taken the Central Bank and the government two weeks to appoint a new bank board, because many people approached turned down the offer of a directorship in our leading bank. The rejections were even reported in the press, thus reinforcing people’s negative perception.   

Now we are awaiting for the financial assistance needs for Hellenic Bank and the co-op banks which would be re-capitalised with part of the €10 billion the government would receive from the EU. Would the funds earmarked for this exercise suffice or could there be another bail-in? The indications are that the funds would be adequate, but if there is one thing we have learnt in the last few months is that we can be certain of nothing.  

With such a level of uncertainty, public confidence and trust in the banking system, we fear, will remain extremely low for much longer than six months. This is why it is an imperative for the government and the Central Bank to develop a strategy for re-building trust and confidence in the banking system. There must be an action plan supported by a properly thought out communication strategy that would change public perceptions, allay fears and regain a measure of public trust in the banking system. Only when this happens would the complete lifting of controls, that the finance minister desires, cease being a dangerous gamble.

THE EUROPEAN Union, led by Germany, has made Cyprus pay dearly for its alleged money laundering transgressions but one leading anti-money laundering expert questions how the EU will ever repay Cyprus if those charges are proved wrong. 

Andreas Frank is an independent adviser to the German Bundestag and Council of Europe, who has already initiated two infringement proceedings against Germany for violations of the EU’s anti-money laundering (AML) directive. 

A German national living in Switzerland, he argues that mostly German allegations of money laundering in Cyprus were used to justify the unprecedented Eurogroup decision to force a ‘bail-in’ of depositors in Cypriot banks, the argument being that German taxpayers’ money should not be used to save ‘dirty’ Russian money deposited on the island. 

However, this premise could fall flat on its face if the recently submitted reports by the Council of Europe’s Moneyval and private auditor Deloitte Financial Advisory show Cyprus to be no more or less guilty of AML violations than other EU member states. 

In fact, according to Frank, all 27 member states are failing to comply with the EU’s third AML directive from 2005. The European Commission, meanwhile, is currently working on a fourth. 

Each new directive repeals and replaces the older one, meaning that when the fourth anti-money laundering directive is passed, the previous three will no longer be applicable. 

Speaking to the Sunday Mail, Frank said the reason was that none of the member states were complying with the directives. 

He highlighted the difference between adopting the directive’s measures “on paper” and actually ensuring “effective implementation”. 

Rather than accusing member states of AML violations and taking all 27 to the European Court of Justice, as the Commission is obliged to do, it simply wipes the slate clean every few years and starts fresh with a new directive, giving member states more time to comply, he argued. 

The EU’s AML directives are based on the 40+9  recommendations made by the Financial Action Task Force (FATF), an inter-governmental body established in1989 to set standards and promote effective implementation of AML and counter-terrorism financing (CTF) measures. 

According to the previous Moneyval review of Cyprus in September 2011, the country was found to be compliant to some degree with all 40+9 recommendations. 

It concluded that Cyprus adopted measures that comply with international standards and has a comprehensive legal framework in place which compares favourably with other EU and developed countries. In fact, the ratings assigned to Cyprus in relation to its compliance with the 40+9 FATF recommendations outranked most eurozone countries.  

Cyprus has been evaluated by Moneyval four times before last month’s evaluation, imposed by the Eurogroup, along with a private audit, as a precondition to signing a bailout agreement. In all previous four reports, Cyprus received an overall positive evaluation.

The Basel AML Index, developed by the Basel Institute on Governance, uses a composite methodology, aggregating 15 variables from third party sources that deal with AML/ CTF regulations, financial standards, transparency and disclosure and political risks. 

Frank notes that the Basel AML Index assigns Cyprus a lower money laundering risk than the eurozone average and lower than EU countries like Germany, Luxembourg, Austria and the Netherlands. 

He also highlights the difficulty in correctly assessing countries’ compliance using current evaluation procedures, hinting at much deeper problems in the worldwide approach to fighting money laundering and terrorism in general.

“To stop money laundering and transnational organised crime from further undermining the civil societies, the current AML/CFT regulations must be urgently adjusted and improved,” he said.

Taking Germany as an example, Frank noted that Germany’s 16 federated states (Lander) have requested the federal government take on the responsibilities of implementing the AML directive as they are not able to do so.  

Germany’s largest Lander, North Rhine-Westphalia with a population of 18 million, has clearly acknowledged that its’ offices of public order will not be able to oversee AML measures in the non-financial sector of the federated state. 

Frank also notes that on October 22, 2012, Italy’s anti-mafia prosecutor Dr Roberto Scarpinato was asked to speak at a public hearing of the Bundestag Finance Committee where he testified that “for international crime syndicates and Italy’s mafia, Germany is one of the most important countries for their money laundering operations”. 

A staunch supporter of the EU project, Frank has over the years lobbied and pressured the German government to ensure full implementation of the EU’s AML directive, even getting a mention in German Finance Minister Wolfgang Schaueble’s official biography for his efforts. 

Frank knew him when he was Interior Minister, and responsible for the AML framework, before it was passed on to the German Finance Ministry. Frank also shared correspondence with Schaueble’s underling Gerhard Schindler at the time, who incidentally, was later promoted to head of the German intelligence agency BND.  

In the run-up to the Eurogroup’s fateful decision last month to impose massive losses on depositors of the island’s two biggest banks in exchange for a €10 billion loan, the German media and lawmakers embarked on a consistent campaign to point the finger at money laundering activities on the island. 

In November, 2012, Germany’s Der Spiegel cited a BND report as saying “Russian oligarchs, business people and Mafiosi” would benefit most from any bailout and that Cyprus was a “gateway for money laundering in the EU”.  

In January, 2013, the same publication wrote: “Several dozen oligarchs and financial sharks have set up offshore companies in Cyprus, where they can protect their assets, at very favourable tax rates, from the Kremlin-controlled Russian justice system,” and listed all Russian magnates with interests in Cyprus. 

According to the BND report, attorneys and trustees in Cyprus have specialised in financial services, some of which “are used to conceal money earned illegally”, Spiegel said.

Schaueble and Bundestag MPs threatened at the time to veto a Cyprus bailout deal over money laundering concerns and applied heavy pressure on Cyprus to accept an independent audit on its AML framework. 

“Can you imagine what Germany would say if Cyprus demanded the same?” asked Frank. 

The AML consultant argued that Cyprus is obliged to abide by the “hard” law provisions of the EU’s AML directive. The Commission, as the “guardian of the treaty”, is responsible for ensuring that EU law is correctly applied. 

When the Commission, as a troika member, supported the demand for an independent audit by a private company, it not only broke EU law but also destroyed its foundation, said Frank.

 “Why should the member states comply with EU law when the Commission confirms that it is unable to fulfil its obligations in accordance with the treaties on European Union?”

For most Cypriots, the allegations were taken half-seriously, as most were under the impression Cyprus had improved its act after EU accession. To most members of the public, Cyprus was no longer tainted by the serious allegations levelled against it in the 1990s of UN sanctions’ violations connected to bagfuls of money being sent to Cyprus by former Serbian leader Slobodan Milosovic.

It’s not that Cyprus became squeaky clean, but that as a member of the EU, it had to act within a framework of certain rules and standards, meaning any possible AML violations could only go so far before the Commission would come along and take Cyprus to court for non-implementation.  

However, failure to heed the warning signs proved most costly for the average Cypriot who operated their business accounts, deposited their savings or put away their pension/provident funds in seemingly safe places, like the island’s biggest and most systemic banks. 

In 2012, the two banks, Laiki and Bank of Cyprus, had suffered massive losses from the EU-imposed haircut on Greek sovereign bonds, to which they were disproportionately exposed. They desperately needed bailing out, but the government was in no position to help, leading the country to request a eurozone bailout. 

Various polls showed that the majority of Cypriots were in favour of signing a memorandum with the hydra-headed troika, and swallowing the austerity measures that this would entail, in exchange for a bailout of the systemic banks. 

What they didn’t expect was for Cyprus to be used as an experiment, or as President Nicos Anastasiades put it a “guinea-pig” for the Eurogroup to send out a clear message that EU taxpayers will no longer foot the bill for the mistakes of eurozone banks, and even sovereigns.    

Schaueble made it clear after March 25, 2013, that Cyprus was dealt with successfully. The German and IMF-inspired precondition that Cyprus does not inflate its public debt was met by using depositors’ money for most of the ‘rescue package’. This was morally justified, according to Schaueble, because those who were responsible for the crisis have been made to pay for it. 

In the process, through its handling of the Cyprus debacle, the EU sent a host of other messages to the European public that, put simply, are almost Orwellian in nature: 

If you are a prudent saver, as opposed to a reckless spender, you are liable to be punished and whatever money is not taken from you will be frozen indefinitely in your account. 

If you fail to live within your means and have loans taken out with the bank, your savings will be spared from a haircut.

And equally controversial, if you choose to put your money in a bank which happens to offer high-interest rates on certain deposits, you are liable to be punished. Unless, of course, the offending party happens to be the University of Cyprus, a local authority or the UN Peacekeeping Force in Cyprus (which employed the services of Laiki to run its operations), in which case you are entitled to a ‘get out of jail’ card. 

On April 18, the Bundestag overwhelmingly voted in favour of the Cyprus bailout, while the debate on money laundering was completely sidelined. 

“The money laundering accusations were used to serve as justification for the Eurogroup's extraordinary demand for a depositors' haircut, disregarding that many of the expropriated depositors earned or received their deposits from legal sources,” said Frank. 

To prevent the creation of conspiracy theories, the results of an “unsparing and transparent” AML/CFT probe has to be published without omissions, he said. 

“To prove that Cyprus was not discriminated or misused to set an example, the inquiry’s results have to be evaluated in the context and comparison with the AML status in the other EU member states which have to comply with the EU Money Laundering Directive.” 

The German consultant was quick to add that US investigations have shown that some Cypriot banks have been involved in money laundering operations for Russian organised crime. But they are not alone. 

“Many large international banks, some of them operating from the EU, have recently been ensnared in money laundering/financing terrorism cases.”

According to the US authorities, HSBC and Standard Charter laundered billions of dollars for their customers ranging from drug syndicates to failed states while German banks like HSH Nordbank, Commerzbank and Deutsche Bank have also been sanctioned by US authorities for AML related failures, he said.

As for Cyprus, the Moneyval/Deloitte reports were submitted to the troika last Wednesday. It remains to be seen whether they will be published in full, what their conclusions are, and whether Moneyval will reverse the positive evaluations of its last four reports on Cyprus, the most recent being one and a half years ago. 

If it finds serious violations of the EU’s AML directive in Cyprus, then Frank believes there are legal grounds to sue the Commission over its failure to ensure enforcement of EU law.  

If not, how will the EU make amends after forcing Cyprus to swallow a gut-wrenching pill before even completing the diagnosis, he asks. 

Expert says Cyprus no better or worse than other member states when it comes to money laundering

Bank of Cyprus said yesterday it had carried out a conversion of uninsured cash deposits in the bank into equity, one of the conditions of international lenders to offer the cash-starved island financial aid.

The process, known as a 'bail-in', made depositors in the bank pay for its recapitalisation, after the institution was hit by massive losses from its exposure to debt-crippled Greece.

Bank of Cyprus, the island's largest bank, said it had converted 37.5 per cent of deposits exceeding €100,000 into "class A" shares -- nominal price €1.0 -- with an additional 22.5 per cent held as a buffer for possible conversion in the future.

Another 30 per cent would be temporarily frozen and held as deposits, the bank said.

A spokesman for the bank said he was not authorised to say what the percentage corresponded to in cash terms. The precise recapitalisation needs of the bank will be concluded at the end of June.

The bail-in, including the dissolution of Cyprus' second-biggest lender Popular Bank, is part of attempts by Cyprus to find €13 billion to shore up its economy.

The European Union and the International Monetary Fund are providing a further 10 billion to the island, one of the euro zone's smallest economies.

Cyprus' parliament was due to vote on the bailout on April 30. The EU and the IMF were expected to disburse a first tranche of aid to the island in May. 

JUSTICE Minister Ionas Nicolaou yesterday apologised on behalf of the police after they fired teargas to quell violence but inadvertently harmed fans when it drifted into the stadium on Saturday.
Nicolaou also pledged that hooligans responsible for the trouble before, during and after the APOEL vs. AEK Larnaca match on Saturday afternoon at the GSP stadium would be arrested.
He was speaking after a meeting with Police Chief Michalis Papageorgiou.
“This is the reason we have taken certain decisions today with the aim of improving our ways and our behaviour as a police force,” he said. The minister added that certain decisions were taken about measures stadium managers would implement as well as measures which will be sent to the Cyprus Football Association (CFA) to be approved.
According to police reports a group of APOEL fans on their way to the GSP Stadium on Saturday stopped at the big roundabout next to the stadium and threw flares, setting dry shrubbery alight before the match. The fire was extinguished by the fire service.
Later on more APOEL fans opened a stadium storeroom and took tiles and chairs which they threw at police guarding the GSP’s south stand. Police used teargas to prevent the incident from escalating.
Four officers were injured and damage was caused to the stadium during the incident. Teargas drifted into the stadium affecting fans and small children as well as delaying the game's kick-off by five minutes to allow the gas to clear.
“It would appear at first glance that problems arose from the throwing of teargas prior to the match and for that I would like to apologise on behalf of the police to the fans for the trouble which it caused, especially to young children,” Nicolaou said.
“Teargas should only be used in extenuating circumstances when there is imminent danger and for that we recognise that problems were caused due to our lack of training on the subject,” he stressed.
The minister revealed a special investigative team had been put together to look into the various incidents that took place before and after the match and said “arrests are imminent as the events which took place on Saturday cannot go unpunished.”
Nicolaou told the press, the team already had photographs and videos of the incidents and would study them to identify the culprits.
 “There will be arrests very soon as certain individuals have already been identified,” he said. He also said stadium facilities must be improved so fans can be properly checked.
“Attempts by groups of fans to enter stadiums without having to buy a ticket or attempts to bring prohibited items in must be stopped or prevented,” Nicolaou said.
He said there would be talks with the CFA regarding the sale of tickets and the use of identity cards by fans as they enter grounds so troublemakers can be singled out.
Nicolaou added there would be meetings with fan groups of the big teams to schedule measures for the next games including European matches which are due to start at the end of summer.
“We are also examining the possibility of implementing stricter measures that could be issued by the courts which would involve banning people who still have pending cases,” the Minister said.
Due to the financial crisis the new ticketing system has not been applied yet, Nicolaou revealed although the system’s use would be discussed with clubs at some point to help prevent any possible incidents.
The minister was also asked about reports of police brutality towards Omonia supporters last week and assured reporters that he had received a letter from the fans and had seen reports in the media that would be investigated.
The police are also looking into possible burglary and damage caused by APOEL fans on Sunday night after the Nicosia club were crowned champions. According to reports, at around 10.30pm, members of the force were tipped off and went to the Technical School near the APOEL clubhouse, where they found the assistant headmaster’s office had been broken into and a computer stolen. A couch had also been set on fire and a classroom had been broken into where a number of chairs had been taken from.
Police claim the chairs were placed in a skip near the clubhouse and were set on fire. Damage was also caused to the traffic lights and pedestrian crossing lights near the clubhouse.

Justice Minister Ionas Nicolaou heads up a meeting with police top brass

THE Central Bank of Cyprus (CBC) yesterday defended its governor from "simplistic" government allegations, saying he had prevented the disorderly bankruptcy of the island's second-largest bank and thereby of the state itself, now in line for a bailout.
The government has taken Central Bank Governor Panicos Demetriades to task for allowing Popular Bank, also known as Laiki Bank, to receive emergency liquidity assistance (ELA), only to be wound down in a chaotic bailout last month.
The central bank rejected the allegations, however.
"The simplistic and unsubstantiated allegation that the Central Bank of Cyprus governor 'allowed' the continuation of the provision of liquidity to Laiki bank through ELA is incorrect and is refuted," a central bank document circulated in London said.
"On the contrary it is clearly evident that the governor, with his timely statements and actions, prevented a disorderly bankruptcy of Laiki bank and consequently the country itself."
President Nicos Anastasiades took the issue up this month in a six-page letter to European Central Bank President Mario Draghi.
He accused Demetriades, an ECB governing council member, of failing to regulate and protect the banking system because he did not stop the flow of emergency funds to Laiki Bank.
Cyprus eventually had to accept the onerous terms of a European Union and International Monetary Fund bailout when the ECB threatened to cut off liquidity to the bank.
The CBC says Laiki was kept on a lifeline because the lack of a bank resolution mechanism at the time could have saddled the state with massive losses in the event of the bank collapsing as the state would have had to compensate depositors.
Under the terms of the island's 10 billion euro bailout, Laiki is being wound down while depositors in the country's largest lender, Bank of Cyprus, could see up to 60 per cent of their savings over €100,000 converted into equity to recapitalise the bank.
 

BANK of Cyprus (BoC) said on Sunday it had carried out a conversion of uninsured cash deposits in the bank into equity, one of the conditions of international lenders to offer the cash-starved island financial aid.
The process, known as a 'bail-in', made depositors in the bank pay for its recapitalisation, after the institution was hit by massive losses from its exposure to debt-crippled Greece.
The island's largest bank, said it had converted 37.5 per cent of deposits exceeding €100,000 on March 26, into "class A" shares – nominal value €1 -- with an additional 22.5 per cent held as a buffer for possible conversion in the future.
Any loans or other financial obligations had been deducted before the conversion, the lender said.
Another 30 per cent would be temporarily frozen and held as deposits, BoC said.
A spokesman for the bank said he was not authorised to say what the percentage corresponded to in cash terms.
The precise recapitalisation needs of the bank will be concluded at the end of June.
The bail-in, including the dissolution of Cyprus' second-biggest lender Popular Bank, is part of attempts by Cyprus to find €13 billion to shore up its economy.
The European Union and the International Monetary Fund are providing a further €10 billion to the island, one of the eurozone's smallest economies.
Cyprus' parliament was due to vote on the bailout on April 30.
The EU and the IMF were expected to disburse a first tranche of aid to the island in May.

FORMER finance minister Kikis Kazamias yesterday denied downplaying or misrepresenting the severity of the economic outlook during his brief stint in the previous administration.
He highlighted also the poor interpersonal relations between former President Demetris Christofias and ex-central banker Athanasios Orphanides, adding that the feelings were “mutual.”
Kazamias was testifying before the committee of inquiry probing the circumstances that led the economy to the brink of bankruptcy and to the ‘haircut’ decision of March this year. The panel is currently focusing on fiscal/governmental policies and decisions, most of which fall within the term of the previous administration.
Kazamias was appointed finance minister in early August 2011, weeks after a deadly munitions blast at a naval base, replacing Charilaos Stavrakis, who earlier also testified before the committee. Kazamias was in charge of implementing and negotiating the EU austerity measures within the government sector after the 2008 European sovereign debt crisis. He resigned in March 2012 citing health reasons.
Kazamias’ term coincided with the summer 2011 decision for the debt restructuring of Greek government bonds, known as PSI (Private Sector Involvement). The first PSI agreed in July 2011 called for a 21 per cent reduction in the the Net Present Value of the Greek bonds. The PSI was finalised in February 2012, when euro-area finance ministers finalised a second bailout package for Greece, which had the effect of raising the level of the ‘haircut’ from the initial 21 per cent to around 70 per cent.
On the Greek PSI, Kazamias said his understanding was that initially the two Cypriot banks - Laiki and Bank of Cyprus - were not in hot water because they had already made provisions for 15 per cent losses, a figure close to the 21 per cent Greek haircut. It was only much later that the real impact of the PSI - a write-down of 72 per cent - became apparent, he said.
Up until early 2012, the situation for the banks was difficult but “manageable,” said Kazamias. The Bank of Cyprus could recapitalise on its own, whereas Laiki would need state support.
The former economy chief was quizzed on a series of public statements he made in 2011 and early 2012 that seemed to signal that Cyprus’ economy was in the clear.
For instance, in one interview with Haravghi dated January 8, 2012, Kazamias said the likelihood of Cyprus requiring financial support from the EU had become more remote.
Five months later, the island applied for a rescue package.
Kazamias defended his comments as being accurate at the time, explaining that corrective action had been taken in the form of two fiscal packages decided in late 2011. On November 10, 2011 Kazamias spoke at length with the EU’s economic affairs chief Olli Rehn who had long voiced concern over the Cypriot economy.
After informing Rehn of the fiscal measures, said Kazamias, he received a letter from the European Commission expressing satisfaction with the steps taken by Cypriot authorities. Cyprus was removed from the list of countries under probation and as such, Kazamias argued, he had every reason to state that the economic situation had improved.
On January 13, 2012, ratings agency Standard and Poor’s slashed Cyprus’ sovereign ratings to ‘junk’; Kazamias said the reason for the downgrade were the banks, not government finances.
Kazamias was next called out on comments he made in the same interview with Haravghi (days before the S&P downgrade), when he said “the banks are healthy, depositors have nothing to fear, and we urge them to close their ears.”
In another part of his testimony, Kazamias said that when he took over he discovered that relations between the finance ministry and the Central Bank were virtually “non-existent”, evidently referring to his predecessor.
On January 6, 2013 Kazamias told Kathimerini newspaper that relations between President Christofias and former central banker Orphanides were poor, adding that feelings between the two men were “mutual.”
The panel also reminded Kazamias that he had once said the political leadership demonstrated “timidity” and wanted to avoid suffering the political cost from unpopular austerity measures. Kazamias responded that his remarks were general and pertained to all successive governments.
The former finance minister sought to dispel the notion that the previous administration was primarily to blame for the country’s economic woes.
The government’s balance sheet posted a deficit surplus in 2007-2008; but during the five years thereafter, during the AKEL administration, a sequence of deficits led to a swelling of the public debt.
“The problems did not start in 2008,” Kazamias countered. The surplus recorded in 2007-2008 was coincidental, he said, arising from the real estate bubble and the tax amnesty decision.
The committee will adjourn and reconvene on May 8 or 9, when Kazamias is set to reappear before it. The panel has already heard testimonies from the permanent secretary of the finance ministry Christos Patsalides, Auditor-general Chrystalla Yiorkadji and former finance minister Charilaos Stavrakis.

Kikis Kazamias

A NEW political movement calling itself the ‘Citizens’ Alliance’ has vowed to fight a financial rescue deal between Cyprus and international lenders and to seek alternatives for placing the stricken economy on a path to recovery.
Unveiled this weekend in Nicosia, the movement is led provisionally by Giorgos Lillikas, who in the recent presidential elections garnered an impressive 26 per cent of the popular vote, nearly making it to the runoff vote.
His movement’s founding convention was held Sunday on the grounds of the State Fairs, where hundreds flocked to register. Elections to nominate the leadership are scheduled for later this year.
The platform demands a referendum to decide the question whether Cyprus should conclude a deal with international lenders - known as the troika- claiming that neither the President nor parliament have the right to make that decision on behalf of the people.
In its first move yesterday, the ‘Citizens’ Alliance’ called on its own supporters as well as anyone else to stage a protest outside parliament today, when the House is set to take a crunch vote ratifying the loan deal.
The movement urged organised groups and trade unions to gather at the parliament at 3pm today to “unite our voices...with the sole demand of rejecting the memorandum.”
Earlier, left-leaning union PEO had called a demonstration for the same purpose.
The ‘Citizens’ Alliance’ warns MPs it is holding each and every one of them personally accountable for their stance during today’s vote in parliament.
Lillikas argues the government stands no chance of adhering to the terms of the financial rescue plan, which he says will drag Cyprus into a recession spiral necessitating further bailouts in the future.
He says the government will be unable to meet its target - and commitment to the troika - of slashing the deficit to 2.4 per cent this year, given that GDP is projected to shrink by anywhere from 13 to 20 per cent.
Lillikas wants to extricate the Cypriot economy from the ‘neo-colonial subjugation’ of the troika. There is another way, he says, and does not rule out a euro-exit and a return to the old Cypriot currency, but only “after careful study.”
Dubbed a political opportunist by his detractors, the 53-year-old politician campaigned on an anti-troika plank in February’s general elections. Despite being knocked out of the race in the first round, shortly thereafter Lillikas had hinted at plans to create a new political party.
The movement includes former deputies from AKEL and the European Party, and has the backing of DIKO ‘rogue’ and firebrand MP Zacharias Koulias, among others.

FINANCE Minister Haris Georgiades has urged parliament to ratify a bailout deal, despite the hardship it will bring, warning that the alternative would be economic collapse.
“Instead of seeking non-existent alternative choices and dei ex machina, maybe we must decide to take control and our fate in our own hands,” Georgiades said during a joint meeting of the House Finance and Foreign Affairs Committees. “Instead of complaining, maybe we should recognise our own mistakes and start working to cover lost ground.”
The committees discussed the island’s bailout ahead of a vote to ratify the €10 billion deal today.
If approved, it will only be with a slim majority as the parties expected to vote in favour – DISY, DIKO and one MP from EVROKO – garner 29 votes out of the 56.
The finance minister told MPs that even with the bailout things would be tight for the state.
Without the €3.4 billion that is earmarked for future deficits, “the difficulties would be incomparably bigger and the (austerity) measures would be nightmarish,” Georgiades said.
The minister said the only way out was systematic work to encourage economic activity, entrepreneurship, investment, and employment.
“We must proceed with deep structural changes that will free our economy’s forces of production,” Georgiades said. “We must create a new state model and a new model of viable economic development.”
The new government received an economy that was on the brink, Georgiades said, with no time or room to negotiate.
“Either the banks would have collapsed with a loss of all deposits, or we would have at least secured the first €100,000 for each depositor,” he said. “We would have either lost the two big banks, or we would have at least tried to save one. Either the state would have gone bankrupt, without being in a position to pay wages and pensions, or we would have secured a second chance.”
Former ruling party AKEL was expected to vote against, as were socialists EDEK.
AKEL yesterday published its long-awaited alternative proposal to disengage from the bailout agreement, which was none other than leaving the eurozone in agreement with the EU.
“In case it is adopted, implementing such a decision must be done through negotiations with the European Union, for a coordinated exit based on the principles of international law,” AKEL said in a statement.
AKEL invited other parties and the government to enter a fruitful dialogue towards that direction and suggested that the question must be put to the people through a referendum.
Foreign Minister Ioannis Kasoulides however, warned, that leaving the eurozone could mean leaving the EU.
Speaking in parliament, Kasoulides said leaving the eurozone would be in violation of the accession treaty.
“We have no choice but to remain in the eurozone,” he said.
The Central Bank (CBC) said Cyprus should stick to the bailout programme.
“Other solutions, discussed in public, serve to destabilise and I think it is easy to understand how,” CBC senior director Giorgos Syrihas said. “Do you expect investors to come when we are discussing in public that we want to abandon our currency?”

Former President Demetris Christofias entering the AKEL offices yesterday