FOUR separate fires broke out in the Nicosia district yesterday afternoon including one in the buffer zone in Ermou Street, which threatened homes.
Fire services’ spokeswoman Lisa Kemidji said that six abandoned houses on Ermou were damaged by a fire that started out in the buffer zone at about 2pm.
Fire trucks went to the area while concerned Greek Cypriots and Turkish Cypriots on either side rushed to help, a fire services official at the scene told the Cyprus Mail.
“There were many people who were concerned because the blaze was so close to their homes and came out to help,” he said. Turkish Cypriots on the other side of the line also helped fire services, he added.
By 4pm, the blaze was under control but had damaged an area of empty dwellings roughly 80m by 100m the same official said.
But a resident told the Cyprus Mail that it took a fire service truck more than half an hour to gain access to a nearby street because of unregulated parking they had repeatedly told the Nicosia mayor about.
Meanwhile, three other bush fires broke out in Kotsiatis, Paliometocho and in the Peristerona and Orounda area. Nicosia fire services said it had at least 15 trucks out yesterday and had to call in off-duty staff. They also requested help from Larnaca fire services, Kemidji said.
Police blocked the Nicosia-Larna ca highway for about half an hour in the afternoon due to the fire at Kotsiatis.

The blaze at Ermou Street was considered under control by 4pm

EVER SINCE the 2004 referendum the utterance of the word ‘no’ (ochi) has come to be regarded as the ultimately, heroic political stand. It is seen as an illustration of patriotic resistance to the nefarious schemes of the enemies of Cyprus and of our uncompromising commitment to high ideals and principles. Any proposal or offer that does not meet the high moral and political standards that we set is summarily dealt with, with a ‘no’, to the applause, usually, of the media.
During his term in office, Demetris Christofias recognised that utterance of the word would win him brownie points so he kept using it despite being an allegedly pro-solution president. We heard him say ‘no’ to asphyxiating time-frames, arbitration and an international conference on countless occasions, while on the eve of a visit to New York to meet the UN chief, newspapers reported that he had ‘three nos in his suitcase’. He also uttered ‘no’ to the troika and the EU on numerous occasions, delaying the finalising of the memorandum with catastrophic consequences for the country.
In the election campaign, Giorgos Lillikas, made big capital out of his readiness to say the word, accusing his main rival Nicos Anastasiades of having low resistances, which meant he could not be trusted to mouth a heroic ‘no,’ when the need would arise. Inevitably, President Anastasiades came under severe criticism for not uttering the magic word at the key Eurogroup meetings in March. Our wise deputies took the responsibility, heroically saying ‘no’ to the March 15 deal, thus paving the way for a much a worse deal.
On Tuesday, this sterile negativity reared its ugly head once again, both outside and inside the legislature, which had to approve the memorandum. AKEL’s, EDEK’s and a couple of other deputies voted ‘no,’ without having an alternative proposal and aware that rejection of the memorandum would lead to the state’s bankruptcy and a messy exit from the euro; the parties still felt there was political capital to be made from a heroic, but ultimately meaningless, ‘no’.
There could not have been a more depressing illustration of the political immaturity that plagues the country and has caused all our problems. The above-mentioned parties were happy to put the economy in even deeper trouble than it is currently in, because sterile negativity has always paid high dividends in our undeveloped political culture. Unless we grow up and overcome our simplistic approach to politics, seeing everything as either black or white, regarding compromise as treason and always hiding behind the resounding ‘no,’ we will never progress as a state or a society.
It is time we understood that carrying on saying no, like spoilt children, is no answer or solution to anything.     

THE EUROPEAN Commission forecast what it called a ‘profound contraction” in economic activity in Cyprus over the next two years as a result of ‘painful adjustments’ the island must endure under its bailout programme.
According to the Spring forecast published yesterday, the island’s economy is expected to contract by 8.7 per cent this year and 3.9 per cent in 2014 mainly as a result of the conditions of the bailout recently agreed with international lenders, the Commission said.
According to the EC’s spring economic forecast, the island’s real GDP is expected to decline sharply by 8.7 per cent this year “affected in particular by the immediate restructuring of the banking sector, which affects net credit growth, fiscal consolidation, and the high degree of economic uncertainty which weighs on domestic demand and investment.”
The situation is worsened by the capital controls put in place to prevent the flight of deposits following the resolution of the island’s second-biggest bank, Laiki, and a haircut on uninsured savings – over €100,000 -- in the Bank of Cyprus, which could ultimately reach 60 per cent.
“Temporary imposition of capital controls and withdrawal restrictions are expected to hamper international capital flows and to reduce business volumes in both domestic and internationally oriented companies,” the EC said. “The bail-in of uninsured depositors implies a loss of wealth, which will also affect private consumption and investment.”
And Cyprus could only look forward to more misery in 2014 as deleveraging
by banks and the tight credit growth conditions will cause the further decline of gross fixed capital formation.
Fiscal consolidation measures and rising unemployment are projected to weigh strongly on private consumption, the EC said.
“Little reprieve could be expected from exports (tourism being most promising) amid uncertain external conditions and a shrinking financial services sector.”
Unemployment was expected to rise further this year and will continue its upward course in 2014 on the back of slowing business activity, spillovers from the bank restructuring, and a hiring freeze in the public sector.
The EC said it expected unemployment in 2013 to reach 15.5 per cent and 16.9 per cent the next year.
The EC said significant downside risks will persist as the implementation of the agreed macroeconomic adjustment programme could have a stronger impact on the economy through domestic demand, exports, business and consumer confidence.
“Also, risks of household and corporate defaults propagating through the economy may lead to further losses in the banking sector and increased unemployment. Upside risks relate to potential investment activity in the energy sector.”
The EC also expected a widening deficit – 6.5 per cent this year and 8.4 per cent in 2014.
The deficit in 2012 was 6.3 per cent.
Revenues were expected to be held back by the slump in economic activity, despite the rise in direct taxation.
“The decline in economic activity is expected to lead to worse revenues in 2013 than in 2012 and to a faster worsening in 2014, as these taxes are collected in the following year,” the EC said. “Indirect tax receipts are also expected to fall in both 2013 and 2014 in line with the reduction of domestic consumption and despite the increases on the VAT rates and on excise duties.”
France, Spain, Italy and the Netherlands - four of the five largest euro zone economies - will be in recession through 2013, the Commission's forecasts showed, with only Germany, the largest euro zone economy, managing to eke out growth.
The Commission said the euro zone economy would shrink 0.4 per cent this year and grow 1.2 per cent next year, revising down its projections from last February of a 0.3 per cent recession and 1.4 per cent growth respectively.
"Fiscal consolidation is continuing, but its pace is slowing down. In parallel, structural reforms must be intensified to unlock growth in Europe, " EU Economic and Monetary Affairs  Commissioner Olli Rehn said.

 
 

Workmen were spotted refurbishing what used to be Laiki (Popular) Bank branches (Reuters)

Due to the Easter holidays, there will be no Sunday edition of the newspaper tomorrow.  We will be back in the office on Tuesday, May 7.

A five-year-old boy died yesterday after he was bitten in the throat by a dog during a visit to a family friend’s home in Skarinou.

The incident happened at around 1.30pm while the boy and his family were visiting the dog's owner at his home, police said.

A police spokesman said the dog -- Akita breed -- attacked Eantas Loizou and bit him in the throat, apparently severing his carotid artery.

Loizou was rushed to Larnaca hospital where he was pronounced dead on arrival.

The dog was put down by the veterinary services while the owner was arrested because he had not kept the canine on a leash.

Police said they had no information of the dog having a history of violence.

The owner of the dog and the boy’s father both serve at the same army unity in the Larnaca area.

Akita is a large breed of dog originating in Japan.

stock photo

President Nicos Anastasiades has described his three-day working visit to Israel as the “start of a new era in bilateral relations,” saying he is “absolutely satisfied” with the talks he had on Sunday with Prime Minister Benjamin Netanyahu.

Speaking to the press after talks in Jerusalem between the two delegations, President Anastasiades said “today we started a strategically important dialogue with a view at enhancing and further developing our bilateral ties, which are founded on common principles and values.”

The two leaders had a 20 minute private meeting, followed by talks which lasted about one hour.

“We had the opportunity to exchange proposals leading to joint strategic options but also ideas which serve, in the best possible way, the common interests of both countries, on a bilateral level as well as in the wider region,” the president added.

Anastasiades said the talks, as expected, focused on cooperation in energy matters and both sides reaffirmed their joint commitment to develop and exploit cross-border natural gas and oil reserves.

 “We also discussed current developments in the region, which are worrying, with particular emphasis on the situation in Syria, where the crisis may spill over into the wider region,” Anastasiades told reporters after his talks.

Netanyahu and Anastasiades expressed the belief that Iran must engage in a constructive dialogue to comply with its international obligations with regard to its nuclear programme.

“I briefed the Prime Minister on the current economic difficulties Cyprus is facing, pointing out at the same time that I remain committed to a political settlement in Cyprus, in line with UN resolutions and EU values and principles,” Anastasiades said.

Premier Netanyahu, he continued, “showed full understanding and reiterated the traditional positions of principle on the question of Cyprus, reaffirming that Israel’s improved ties with Turkey are not going to affect Cyprus-Israel relations and I want to emphasis this.”

The President said Cyprus seeks constructive, creative and effective cooperation with Israel, which he thanked for its “impeccable cooperation and understanding of our positions.”

Russia has agreed to extended the maturity and reduce the interest on its loan to Cyprus, a document prepared by international lenders showed, providing additional but expected financial relief to the island on top of an EU-IMF bailout.

Cyprus had complied with all conditions set by international lenders for the first €3 billion of the €10 billion bailout to flow to Nicosia later in May, said the April 30 document, drawn up by the troika of the European Central Bank, the European Commission and the IMF.

Russia lent Cyprus€2.5 billion in 2011 for five years, with an annual interest rate of 4.5 per cent. Extending the loan and reducing the interest will ease debt servicing costs for Nicosia and help it regain financial stability.

"Reassurance has also been obtained from the Cypriot authorities that formal agreement has been reached between the Republic of Cyprus and the Russian Federation on an extension by two years of the maturity for the Russian loan, which will be reimbursed as of 2018, and a reduction of the interest rate from 4.5 per cent to 2.5 per cent," the document said.

Cyprus secured a three-year bailout from the euro zone's ESM bailout fund and the International Monetary Fund (IMF) last month, becoming the fifth country in the single currency area to seek euro zone financial help as a result of the sovereign debt crisis.

"All prior actions are now compliant both on substance and on procedure," the document said.(Reuters)

PEOPLE islandwide have been left shocked and horrified after a five-year-old boy was killed by an Akita dog while visiting a family friend’s home in the village of Skarinou on Easter Monday. 

The boy was buried yesterday afternoon and the dog’s owner was released without charge until police complete their investigations, while the one-year-old dog has been put down. 

The incident happened on Monday at around 1.30pm in front of the boy’s 20-year-old half-sister according to police. The two families were due to have a meal to mark the Easter celebrations, as both the owner of the dog and the child’s father have been close friends for decades. 

State-pathologist Sophocles Sophocleous said the boy, Eantas Loizou, had died from shock after having his carotid artery severed. Sophocleous also revealed the child had other bites on his neck, his right arm, his head and his back.

According to reports young Eantas had been playing with the dog under the watchful eye of his sister who however did not manage to react in time once the dog began attacking. 

The boy was taken to Kofinou medical centre by his father and then by a police patrol car to Larnaca General Hospital but he was pronounced dead on arrival.

The funeral took place yesterday at 5pm in Larnaca and the parents asked for those attending to dress in white to represent little Eantas’ innocent soul. Instead of wreaths they asked people to make contributions to the Anti Cancer Society where the boy was a young volunteer.

The dog was put down by veterinary services and the owner, who was arrested by police for not keeping the Akita on a leash, was released yesterday without charge. 

The owner, and the boy’s father both serve at the same army unit in the Larnaca area and had been friends from a young age.

Colonel Andy Loizou, the boy’s father, called on the public to stop the arguing which began on social networking sites shortly after news of the incident broke as people rushed to point the finger at certain dogs and dog owners. He told reporters his son, would not have wished people to blame the dog as he had loved animals. 

According to police spokesman, Andreas Angelides, the dog’s owner was released without charge until all relevant statements are taken and the case was seen by attorney-general Petros Clerides. “Once we have finished taking statements it will be clear which laws have been broken,” he said.

The dog was not on a leash at the moment he attacked the boy, according to Angelides.

“From the moment that the dog was at home and wasn’t on a leash and there wasn’t someone supervising the dog then any incident is the owner’s responsibility whether they are in enclosed spaces or in open spaces,” he said. 

“Dog owners must take precautionary measures to prevent such incidents from happening, like keeping their dogs on a leash even in open spaces because even if their pets don’t have a history of attacking people you never know what might happen or how any animal could react,” he added.

Speaking on state radio yesterday, head of veterinary services, Giorgos Kyriakides said that all dogs under certain circumstances can be dangerous. “Every dog is different and they have their own individual character,” he said. He added that Akitas are very strong dogs that are very protective of their owners and their living area but they are also quiet and disciplined animals, he said. “Young children should not remain on their own with Akitas,” he said, adding they could be jealous animals and any movement made by someone other than their owner could be construed as a threat. 

Kyriakides warned that buying a dog was a huge responsibility that required more than the basics of feeding and walking them. These included training from a young age and socialising the dogs with other animals and with humans. “If a dog is not properly socialised then you cannot tell how it may react in a given moment,” he concluded.

Laws need to be put in place to help police handle the many incidents of owners mistreating their dogs, farmers poisoning hunting dogs, strays and dog chipping according to former environment commissioner Charalambos Theopemptou.

“Pet shops continue to sell all kinds of breeds which has resulted in dog shelters, which are not aided by the government, becoming overcrowded and dog shelter owners having to put animals down as their owners cannot be found,” he said. Theopemptou added that certain breeds of dog should not even be brought to Cyprus, not because they may be aggressive but due to the climate. “If you cannot care for a dog in the correct manner by keeping it in temperatures that it is comfortable in, then you shouldn’t own that breed of dog,” Theopemptou said. 

In response to Theopemptou’s calls for legislation to be put in place regarding dogs, Justice Minister, Ionas Nicolaou responded that every law must be regularly studied and modernised. “Our priority right now is to allow the parents of the unfortunate child and the dog owner to try to recover from this tragedy,” he said. “What I can say right now and it must be comprehended by those who wish to keep pets at home is that they must take appropriate protective measures,” he added. Nicolaou concluded that we must learn to be more consistent in our actions.

The Green Party also joined the debate yesterday, calling on an end to the complete lawlessness regarding dog ownership. “The main cause of this fatal incident is the ineffectiveness of our government and the criminal indifference to finally implement an effective law for dog owners,” a party statement said. The statement went on to say that the Green Party had submitted an amendment to the dog law eight years ago that was still pending approval. Green party General-secretary George Perdikis will meet with the justice minister today to discuss the creation of a special police department dealing with animals.

THERE ARE two types of Akitas, of differing weights and sizes: the original Japanese Akita breed and an American Akita. The dog which mauled the unfortunate five-year-old is believed to be an American Akita.

 A look through various magazines and websites will tell you that the Akita is a docile, intelligent, courageous and fearless dog. It is careful and very affectionate with its family. Sometimes spontaneous, it needs firm training as a puppy, and a firm, confident, consistent pack leader. Without it, the dog can become very wilful and possibly very aggressive towards other dogs and animals.

 The Akita is considered a first-class guard dog in Japan, and Japanese mothers often leave the children of the family in the Akita’s care, though they should definitely be supervised with other household pets and children. They are extremely loyal and thrive on firm leadership from their handlers. Although the breed may tolerate and be good with the children of its own family, if the dog is not taught that it is below all humans in the pack order, it may not accept other children. If teased, the breed may bite, thus children must be taught to display leadership qualities and at the same time to respect the dog. 

 Akitas consider eye contact a challenge and can react aggressively, therefore one is advised not to get down to the Akita’s level and close to the dog’s face unless well acquainted with the dog. Such positions can - and do - trigger an aggressive response.

 One such incident which went unreported a year ago was that involving nine-year-old Sophia from Larnaca, who was bitten in the face and arm by an Akita belonging to her 10-year-old sister’s friend. The six-year-old male Akita had no previous history of violence but as Sophia’s 44-year-old mother told the Mail, she felt she should have seen the warning signs as the dog was not overly friendly or affectionate.

 “Out of nowhere and with no warning, as the three girls were playing with the dog just two metres from where we were sitting, the dog turned around and bit Sophia’s cheek and arm,” she said. The bite was far from a friendly nibble and required 32 stitches for the unfortunate nine-year-old. 

 “Our first reaction was that we were just happy her life was not in danger, but something clearly needs to be done to protect children from certain breeds of dangerous dogs,” she added.

 The dog owners were horrified by the incident and immediately took the dog to their vet to have him put down. “We were shocked by the incident and decided that we did not want to press charges, but the only way we could consider this is if the animal was put down,” Sophia’s mother said. “The vet, however, did not want to put the animal down as he had been caring for it for the last six years; it made us realise that strict laws need to be passed, which say that as soon as a dog bites a human being it needs to be put down,” she added. The 44-year-old told the Mail she is an animal lover herself but felt that specific breeds need to be banned as they are quite clearly dangerous.

 The Akita is not a banned breed on the island. Currently in Cyprus, Pit Bull Terriers or American Pit Bulls, Japanese Tossas, Dogo Argentines and Fila Brazilieros have been banned.

An Akita playing in the garden of its owner's home yesterday (Christos Theodorides)

RUSSIA has agreed to extend the maturity and reduce the interest on its loan to Cyprus, a document prepared by international lenders showed, providing additional but expected financial relief to the island on top of an EU-IMF bailout.

Cyprus had complied with all conditions set by international lenders for the first €3 billion of the €10 billion bailout to flow to Nicosia later in May, said the April 30 document, drawn up by the troika of the European Central Bank, the European Commission and the IMF.

Russia lent Cyprus €2.5 billion in 2011 for five years, with an annual interest rate of 4.5 per cent. Extending the loan and reducing the interest will ease debt servicing costs for Nicosia and help it regain financial stability.

"Reassurance has also been obtained from the Cypriot authorities that formal agreement has been reached between the Republic of Cyprus and the Russian Federation on an extension by two years of the maturity for the Russian loan, which will be reimbursed as of 2018, and a reduction of the interest rate from 4.5 percent to 2.5 percent," the document said.

Cyprus secured a three-year bailout from the euro zone's ESM bailout fund and the International Monetary Fund (IMF) last month, becoming the fifth country in the single currency area to seek euro zone financial help as a result of the sovereign debt crisis.

"All prior actions are now compliant both on substance and on procedure," the document said.

AFTER promises of mortgaging Church property and donating churches’ valuables to kick-start the economy, Archbishop Chrysostomos II has now pledged to employ thousands of people through “millions’ worth of development projects. 

Speaking on Monday during a visit to Paphos General Hospital, the Primate said the Archbishopric was going to invest between €60 million and €70 million to build a hotel in Paphos, on land belonging to the Archbishopric. He also said that he would invest in over €100 million to build a 75MW photovoltaic park just outside Nicosia, and said he was also planning to build a private 75MW power plant in collaboration with Russian and Israeli partners that would cost “several million”.

And while many private schools face financial difficulties because of the crisis, the Archbishop has said the Church will set up an English-language school in Nicosia’s Makedonitissa district. 

He said there would be other projects involving foreign investment and collaborations with Cypriots, but did not specify. With a bit of hard work “we will bounce back,” the Archbishop said adding that the Church was there for Cypriots. 

Just last week, Chrysostomos said in his Easter message that the Church was willing to donate all of its valuables, even the Churches’ sacred vessels “for the salvation of the economy”.

And in March, before a Cyprus bailout was finalised, the Archbishop said the Church could mortgage its property to invest in bonds to support the economy. Further back, when he was Bishop of Paphos, he promised displaced Greek Cypriots compensation if they were to vote against the 2004 Annan Plan, a proposed solution to the Cyprus problem that was to be rejected by Greek Cypriots. But the Primate later denied issuing such promises. 

On Monday, the Archbishop said that Cypriots had “guts and courage and although they (knew) how to overspend, they also (knew) how to get by with less”. 

Chrysostomos said he was sure the government would do its best to promote growth and bring back smiles on people’s faces. 

“Despite difficulties, there will be better days ahead,” the Archbishop said. 

THE government yesterday rolled out three schemes worth over €30 million to boost employment as Cyprus experiences its worst jobless rates in three decades.

Labour Minister Zeta Emilianidou said the schemes aimed at providing work for 8,000 people, the majority in the wider tourism sector.

“Statistics show a large number of unemployed Cypriots,” the minister said. “With everyone’s cooperation our fellow citizens will be able to find jobs.”

Around 45,000 people were registered as unemployed in April, with 33,500 being Cypriots.

The schemes had been announced by President Nicos Anastasiades last month. They were worth €30.8 million, co-funded by the European Union.

The first one – worth €6.8 million -- provides for the employment of 1,000 people looking for flexible hours.

The scheme subsidises 65 per cent of the wages for eight months, provided that the duration of the employment is ten months.

It will also subsidise the workers’ cost of travelling to their place of employment.

Eligible businesses were those that had not reduced their workforce after the announcement of the schemes on April 19 and will create one or more jobs under a flexible regime.

The bulk of the budget, €20 million, has been earmarked for the hotel and food industries – the tourism industry in general – in a bid to find jobs for 6,000 currently unemployed people.

The scheme will subsidise 40 per cent of workers’ salaries for eight months, provided they are employed for 12 months or 30 per cent for five months if they were given a job for seven months.

It applies to businesses that would not have laid off any staff between April 19 and the date they submit their application to participate in the plan.

Exemptions are made if the positions had been left vacant following voluntary or age-related retirement, or legal dismissal due to disciplinary offence.

Employers must also pledge they will not cut staff engaged in the same area as the subsidised person for the duration of the scheme.

The government also unveiled a €4.0 million scheme targeting 1,000 unemployed university degree holders under 35-years-old.

It will run for six months and its aim is to keep youths in Cyprus by allowing them to gain some experience in their field while on a salary of €500 per month.

Priority will be given to holders of masters or doctorates degrees, those married with children, single parents and the long-term unemployed.

Currently going through the worst economic crisis in decades, Cyprus is bracing for a jump in unemployment in the coming months.

The European Commission said last week it expected Cyprus’ unemployment to reach 15.5 per cent this year and 16.9 per cent in 2014.

Labour Minister Zeta Emilianidou said the schemes would apply in the wider tourism sector (Christos Theodorides)

COOPERATIVE banks are looking to issue special shares in a bid to raise some one billion euros that may be needed to recapitalise in the coming years, it emerged yesterday.

“The aim is to raise a billion euros so that we will not need support from the mechanism (international bailout) and cover the needs through our own funds,” said Andreas Mouskallis, chairman of the cooperative federation.

Should they fail, cooperatives can be recapitalised with funds earmarked for that purpose included in the island’s bailout.

The special shares will be sold to members, customers and the wider public, Mouskalis said.

Cooperatives may need an estimated one billion euros through to 2015.

The island’s €10 billion bailout includes up to €2.5 billion that could be used to recapitalise coops and Cyprus’ third biggest bank, Hellenic.

As part of its bailout, Cyprus had to wind down Laiki, the second-biggest, while depositors in the largest lender, Bank of Cyprus, will be recapitalised by imposing losses on depositors, a process known as bail-in.

Uninsured deposits – over €100,000 – have undergone a so-called haircut of 37.5 per cent, which however could ultimately reach 60 per cent.

Under the bailout deal signed with international lenders, cooperatives will be given until July 31, 2013 to cover their capital shortfalls whereas other commercial banks will be allowed until the end of September 2013.

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

Cooperatives were already scrambling to restructure as part of the agreement that provided that cooperatives must shrink in number – from 96 to 35 – mainly through mergers.

Mouskallis said mergers should be finished by July.

Staff will be offered a voluntary retirement scheme in a bid to shed excess personnel, he added.

As part of the agreement, supervision of cooperatives will be shifted to the central co-operative bank from the trade and industry ministry.

The Central Bank of Cyprus will also have a role in the supervision.

THE HEAD of the Eurogroup, the eurozone’s finance ministers who negotiated Cyprus’ bailout deal, was yesterday grilled by members of the European parliament (MEPs) over Cyprus’ bailout. 

Dutch finance minister Jeroen Dijsselbloem was asked by MEPs in the committee on economic and monetary affairs to explain the exact circumstances of what was referred to as a “debacle” and a fiasco” of a bailout, and was even scolded by French MEP Sylvie Goulard, who called him “the most optimistic undertaker (she has) ever known”. 

Dijsselbloem said Cyprus’ overgrown financial problem caused the indebted island’s problems, defending the controversial bailout agreement as “the best possible way” to handle the situation. 

“In the choice of instruments, we definitely looked also at the non-residents' large deposits…As a matter of fact, the Eurogroup felt it very important that it should be a fair burden sharing,” Dijsselbloem said referring to a March 16 Eurogroup decision to impose a levy on all depositors in local banks, including the insured deposits of smaller than €100,000. The haircut was to go towards the recapitalisation needs of banks that incurred heavy losses due to their exposure to Greek debt. Cyprus’ partners were to contribute €10 billion to a bailout as long as depositors also contributed. 

Although rejected by parliament, the decision to raid small depositors’ savings spooked the markets over fears of breaking a taboo. 

Dijsselbloem said yesterday that the Eurogroup should have made the distinction clearer “between a one-off wealth tax, a contribution” and that of the deposit guarantee scheme of deposits up to €100,000 “that is fully guaranteed throughout the European Union”. 

Eventually, “the burden was put on the uninsured depositors of the banks where the main risk was concentrated,” Dijsselbloem said referring to the decision to wind down the country’s second biggest bank and force losses on the depositors of the other. “Is that a fair way to deal with the crisis in the banks of Cyprus? I think so,” he said. 

Dijsselbloem referred to the “truly exceptional circumstances” that led to Cyprus’ need for a bailout. “In the run up to this crisis, the Cyprus financial sector has been allowed to grow in an unsustainable fashion to a disproportional size compared to the Cyprus GDP,” he said. 

It was a point he would return to about addressing the systemic problems caused by banking sectors and taking measures to encourage job growth being a priority. 

But in the middle of talking about  “prioritising new economic opportunities,” Dijsselbloem stopped, glancing up at an unconvinced Sylvie Goulard.

 “Fine, I’ll stop as I see you’re not happy with my comments,” he said. 

“I just wanted to make a comment,” Goulard said. 

 “You are the most optimistic undertaker I’ve ever encountered,” she said.

Dijsselbloem let out a spontaneous “wow” before adding that everyone had a “joint responsibility”. 

“If we start talking about undertaking, we will not reach our people,” he said. 

But though the MEPs asked Dijsselbloem to explain how and who decided to tax all savers in mid-March, he did not. 

“I'm very sorry that you find it unacceptable, but I won't do that,” he said.

The committee is due to hear today from the European Commission’s commissioner on economic and monetary affairs Olli Rehn and the European Central Bank’s Jorg Asmussen.

Eurogroup head Jeroen Dijsselbloem faces MEPs yesterday (Reuters)

PRESIDENT Nicos Anastasiades yesterday assured the Israeli business community that Cyprus would remain a “reliable partner” to entrepreneurs and investors interested in international expansion and that it would retain its position as a significant international investment hub for Israeli and Cypriot business.

Addressing a business forum in Tel Aviv - jointly organised by the Federation of Israeli Chambers of Commerce and the Cyprus Chamber of Commerce - Anastasiades urged the Israeli business world to keep faith with Cyprus despite the financial crisis here that has all but paralyzed the economy.

The President promised that ongoing negotiations for a double taxation treaty between Cyprus and Israel would soon be concluded, “with the aim of significantly boosting our economic, commerce and investment opportunities, for the mutual benefit of the business communities and peoples of the two countries.

“My government will offer all help deemed necessary towards this end and will facilitate every business and investment activity originating from Israel,” he said.

Anastasiades reviewed a series of steps geared at encouraging foreign investments and creating a more effective and business-friendly environment. 

These measures include: an additional tax deduction from taxable corporate income of up to 25 per cent for each additional worker who will be employed in the next year; slashing the time needed to issue a planning permission for large-scale development projects to three months at the most; broadening the range of permitted land development in off limit areas for large projects; increasing building ratios for large-scale commercial developments or for large-scale properties in tourist zones; licensing of casino operation; and relaxations for long-term residency applicants who are non-EU nationals.

Anastasiades said Cyprus is committed to concluding a framework agreement for the joint development of any joint gas reservoirs and of multilateral memoranda of understanding in the energy and water sectors. 

Nicosia also “strongly supports” the initiative for an ambitious project for the Cyprus-Israel-Greece submarine EuroAsia electricity cable, he said.

Capital restrictions in Cyprus are liable to affect the operations of Israeli companies in Cyprus, including Mekorot National Water Company and IDE Technologies Ltd. (a joint venture of Delek and Israel Chemicals Ltd.) which are building a desalination plant; BSR Europe Ltd, which owns the country's largest mall in Limassol; and foreign currency trading firms.

Bilateral trade between the two countries stood at €715 million in 2012.

WE WISH we could share the optimism of Labour Minister Zeta Emilianidou who believed that the three schemes she announced yesterday would provide work for some 8,000 people who are currently unemployed. Had she not been informed about the unsuccessful schemes that were implemented by her predecessor and did next to nothing in restricting, let alone reducing, unemployment figures?

In Cyprus all politicians, irrespective of their ideological background, subscribe to the idea that the state has a moral obligation to create jobs. For decades, this was exactly what our state was doing – creating tens of thousands of unnecessary, highly-paid jobs in the civil service, the National Guard, local government, semi-governmental organisations – and it is the main reason it is now bankrupt.

But we still refuse to learn anything from the mistakes of the past. Only a few weeks ago, President Anastasiades announced that the state would hire some 800 unskilled workers on temporary contracts and that all 300 graduates of military academies would be given jobs in the National Guard. We very much doubt the Cyprus army, which already has an absurdly high number of overpaid officers and would still be overstaffed if it got rid of half of them, needs another 300 officers.

Emilianidou’s schemes are in line with the thinking that the state should create unproductive jobs. The most ambitious of these aims to create 6,000 jobs in the hotel/tourism industry, at a cost to the taxpayer of €20 million. It seems strange the government is helping out a sector which is in good shape compared to others, and should not need employment subsidies. Perhaps the decision was taken because other sectors of the economy have been so badly hit that not even state subsidies would persuade them to hire people.

This is the crux of the matter. With the economy in a deep depression and the banks malfunctioning, unemployment will continue to rise no matter how many job-creation schemes the government comes up with. Real jobs are created by businesses and not by the state subsidising wages. Then again, the government wants to be seen to be doing something about the rising number of jobless and the announcement of job-creation schemes is better than nothing.

As things are, the number of the jobless would keep rising, while wages in the private sector would keep falling, no matter how many schemes the government announces. This unfortunately is the reality and there is very little that can be done by state to change it.

COMMON interests between Cyprus and Israel render the two nations natural allies, President Nicos Anastasiades said yesterday on the last day of his state visit to the neighbouring country.

“We are inaugurating a new era in relations between our two countries,” Anastasiades said at a working lunch with Israeli President Shimon Peres in Jerusalem.

“Cyprus is Israel’s most reliable neighbour,” he added. “The two countries are committed to collaborating - we have historic ties and a common culture, but also a common blessing that are the hydrocarbons.”

For his part, Peres said the two countries are “linked in many ways. Without Cyprus, Israel is far away from Europe. We regard Cyprus as a close friend both politically and geographically.”

Anastasiades said Cyprus’s decision to press forward with plans to build an onshore liquefied natural gas (LNG) plant on the island, located “opposite the Suez Canal,” affords interested parties the opportunity to make use of this infrastructure to export gas to the Far East and to Europe.

Nicosia proposes that the two countries pool their natural gas reserves with a view to exporting the fuel via a mooted LNG facility on the island - although it insists that Cypriot gas deposits alone render the project economically viable.

Last month, energy and trade minister Giorgos Lakkotrypis told Israeli media that Cyprus wants to sign a letter of intent with Delek Group and Noble Energy for the construction of an LNG facility. He added that connecting Israel’s Tamar gas field to Cyprus was the best way to export Israeli gas to the Far East.

And in the past few months, Cyprus has been in talks with Israel to buy Israeli gas until the start of gas flow from Block 12.

Asked about Israel’s thoughts on an LNG terminal in Cyprus, Anastasiades said yesterday that the two governments were still “at the stage of deliberations.”

But he added that private Israeli energy companies had expressed a “manifest interest” in acquiring a stake in an LNG investment on the island.

“That means that, by extension, we shall have the cooperation of companies, if not the Israeli government as well,” he said. He declined to elaborate, citing reasons of national security for both nations.

Nicosia also intends to conclude agreements with Tel Aviv on energy security and  a unitization deal paving the way for exploitation of cross-border natural gas and oil reserves.

Defence Minister Fotis Fotiou had visited Israel on Thursday just ahead of Anastasiades, meeting with his Israeli counterpart Moshe Ya’alon for discussions that included dealing with securing both countries’ offshore natural gas tracts. Two weeks ago, Israel and Cyprus carried out a joint Search and Rescue drill in a maritime area near Limassol.

Earlier, Anastasiades described his visit to Israel as the “start of a new era in bilateral relations,” saying he was “absolutely satisfied” with the talks he held on Sunday with Prime Minister Benjamin Netanyahu.

Anastasiades and Netanyahu had a 20 minute private meeting, followed by talks which lasted about one hour.

Energy issues aside, the two sides discussed pending agreements on health, research and development, technology, culture and fighting terrorism and organised crime.

No firm agreements or commitments were announced on energy cooperation.

The visit comes amid speculation of whether the possibility of improved Israeli-Turkish ties following Netanyahu’s recent apology over the Mavi Marmara incident might put a brake on Cypriot-Israeli ties. It’s understood that Nicosia wanted to sound out Tel Aviv on this.

During his trip, the President received assurances from Israeli officials, such as Knesset Speaker Yuli Edelstein, that relations between Israel and Cyprus do not depend on any political developments.

Prior to his noon meeting with Peres yesterday, Anastasiades was received by the Patriarch of Jerusalem Theophilos III. Later in the day, the Cypriot delegation traveled to Tel Aviv, where Anastasiades addressed a business forum jointly organised by the Israel Chamber of Commerce and the Cyprus Chamber of Commerce and Industry. The President also gave an address to the University of Tel Aviv.

Anastasiades arrived in Israel last Thursday for a two-day private visit to attend Orthodox Easter ceremonies, before beginning the official part of his visit on Sunday. The President and his delegation - which include the trade minister and the government spokesman - return to Cyprus today.

President Nicos Anastasiades with Israeli President Shimon Peres in Jerusalem for a working lunch yesterday (Israel Hadari Photography)

Alex Ferguson, Britain's longest-serving and most decorated soccer manager, will retire at the end of the season after more than 26 years and nearly 1,500 matches at the helm of Manchester United, he announced on Wednesday.

The 71-year-old Scot ended intense speculation that he was about to call time on his career by confirming he would step aside after champions United's last game of the season at West Bromwich Albion on May 19.

His decision ends a glittering era at Old Trafford in which the club won 13 English league titles, two European Cups, five FA Cups and four League Cups as well as the FIFA Club World Cup.

Former Chelsea manager Jose Mourinho and Everton's long-serving boss David Moyes, a Scot like Ferguson, are the bookmakers' favourites to take over.

Ferguson arrived in Manchester in 1986 after Ron Atkinson was sacked and, after a difficult start, began building an empire that shows no sign of crumbling with the club recapturing the English title from ManchesterCity this season.

"The decision to retire is one that I have thought a great deal about and one that I have not taken lightly. It is the right time," Ferguson, who has been in charge of 1,498 matches for the club, winning nearly 900 of them, said on United's website (www.manutd.com).

United said Ferguson, who is to undergo hip surgery during the off-season, would remain at the club as a director.

"It was important to me to leave an organisation in the strongest possible shape and I believe I have done so," added Glasgow-born Ferguson who had announced he would retire after the 2001-02 season before changing his mind.

"Going forward, I am delighted to take on the roles of both director and ambassador for the club," he said.

"With these activities, along with my many other interests, I am looking forward to the future."

Ferguson, who in 2010 surpassed Matt Busby's as the longest-serving manager in United's history, had given no hint of his retirement in his programme notes for Sunday's home game against Chelsea, appearing to suggest he would continue his reign for the foreseeable future.

"Whether I will be here to oversee another decade of success remains to be seen but I certainly don't have any plans at the moment to walk away from what I believe will be something special and worth being around to see," he wrote.

'MASSIVE SHOCK'

The suddenness of his decision left some who served under him in a state of disbelief.

"I'm shocked, it's a bombshell," said former United goalkeeper Peter Schmeichel, who was part of the 1998-99 team that won the Premier League, Champions League and FA Cup.

"I'm disappointed and very, very sad. He had always said he would retire when something in his life wasn't right, and it must be something we don't know about."

Former Manchester United midfielder and current Blackpool boss Paul Ince told Sky Sports: "I'm totally shocked. What he's done in unbelievable. You'll never see anyone of his kind again.

"Two weeks ago he was talking about staying on for another two years, so it's a massive, massive shock."

FIFA president Sepp Blatter reacted to the news by describing Ferguson as one of "the greats".

"His achievements in the game place him without doubt as one of the greats," he said. "Will his longevity at the top ever be repeated?"

Ferguson's passion for the game has never diminished, as was demonstrated this season when he led the club to a record 20th league title, two more than the 18 won by Liverpool whom Ferguson vowed to "knock off their perch" when he walked into Old Trafford in 1986.

Ferguson, a horse-racing enthusiast and wine connoisseur, was not an overnight success, experiencing some difficult years before landing the FA Cup in 1990 and the Cup Winners' Cup the year after.

Ending United's 25-year wait for the English title in 1992-93 proved to be the catalyst for two decades of domination despite the challenges of Arsenal, Chelsea and more recently Manchester City.

Famous for his so-called "hairdryer" outbursts of rage at high-profile players, his manic gum-chewing and almost child-like celebration of goals, Ferguson became one of the world's most respected coaches with his philosophy of attacking football and his ability to re-build teams.

His faith in young players launched the careers of David Beckham, Paul Scholes, Gary Neville and Ryan Giggs while his signings of players such as Eric Cantona, Rio Ferdinand, Cristiano Ronaldo and Wayne Rooney proved masterstrokes.

Robin Van Persie, his most recent big-name signing, has scored 25 league goals in his first season at the club as United reclaimed the title from Manchester City with ease.

Off the field Ferguson proved himself the perfect ambassador and diplomat as the club controversially passed into the ownership of the American Glazer family in 2005.

"Alex has proven time and time again what a fantastic manager he is but he's also a wonderful person,"Joel Glazer, son of owner Malcolm, said in the club statement.

"His determination to succeed and dedication to the club have been truly remarkable.

"I will always cherish the wonderful memories he has given us, like that magical night in Moscow," he added, referring to the 2008 Champions League final victory over Chelsea on penalties.

Manchester United's manager Alex Ferguson holds the English Premier League trophy at Old Trafford, in this May 22, 2011 file photo

HOLIDAY bookings from the UK to Cyprus appear to be recovering after a sharp drop during the economic turmoil the island went through in March, reports said yesterday.

Quoting travel industry analyst GfK, The Telegraph, said bookings recorded a 43 per cent drop in March, mainly because of capital controls imposed by authorities to prevent bank runs following a Eurogroup decision to raid deposits as part of the island’s bailout.

One operator, Sovereign Luxury Travel, reported a 100 per cent rise in bookings in recent weeks, compared with March, the newspaper said.

“We’ve seen a real turnaround for Cyprus and bookings have really picked up,” said Steph Pritchard, the company’s managing director, according to The Telegraph. “This can be attributed in part to some really alluring offers in the market.” 

The daily said a number of tour operators and agents were offering discounts of 30 per cent or more on packages to the Cyprus, while Sovereign has cut the cost of one-week breaks for a family of four at the five-star Le Meridien Limassol Spa & Resort by more than £1,800 (down from £6,179).

THE CABINET yesterday appointed a chemical engineer to head the natural gas public company DEFA. 

Eleni Vasileiadou has previously worked as business development manager for major oil and gas company Shell International Gas Ltd (UK), among others.

She is taking over as DEFA head following the cabinet’s political decision to sack the previous chairman, Costas Ioannou, over alleged actions committed in his previous role as head of the energy regulator. 

The cabinet yesterday also appointed businessman Michalis Andreou to the DEFA board.

A political decision to sack Ioannou was taken after the attorney-general submitted a report to the cabinet, with the government spokesman speaking of “serious misconduct.”

Ioannou, who has the right of appeal, previously declined commenting to the Cyprus Mail but has said he plans to contest the decision.

Police have confirmed that the investigation into Ioannou draws on an ongoing civil lawsuit filed with Limassol district court.

The lawsuit concerns a licence awarded to a Russian company to operate a private power station. The licence was given in 2009 while Ioannou was chairman of the energy regulator, CERA.

To obtain the licence, the company had engaged the services of Andreas Hayiannis as a mediator/facilitator. Hayiannis is a relative of Ioannou’s.

CYPRUS WAS not treated fairly by its EU partners regarding the rescue package established for the country, but in no way should the island leave the eurozone, said former president George Vassiliou. 

In an interview with PricewaterhouseCoopers Ltd (PWC) for the new issue of Global Economy Watch, published by PWC, Vassiliou acknowledged there was a debt issue but that the way it was presented was “unfair to Cyprus”. 

“To start with, everybody knows that the banking crisis in Cyprus originated in Greece. If the Greek economy had not collapsed, nobody would have complained about Cyprus,” he said.

When the decision was taken for private sector involvement (PSI) in Greece (a haircut of Greek debt held by private bondholders), the Greek government could have said that “Cyprus banks in Greece are as Greek as the Greek banks, so they have to be treated in the same way”, but they did not do that, noted Vassiliou. 

Of course, the Cypriot president at the time, Demetris Christofias, also failed to realise the repercussions of voting in favour of the PSI, along with other EU member states, he said. 

“But they should have realised that the repercussions of this PSI for Cyprus would have been huge...the losses from one moment to the other for the Cyprus banks were €5 billion which was practically all of their capital,” he added.

This created the banking crisis, but unlike in Greece, the international lenders chose to treat Cyprus differently, saying the solution to the problem should be financed from Cyprus. 

The former president also criticised the Eurogroup’s decision last March to offer Cyprus only €10 billion of the €17 billion bailout loan requested, citing debt sustainability issues, while ignoring the country’s “tremendous” gas and oil prospects. 

He also slammed Cyprus’ EU partners for their treatment of Cyprus after coming to the conclusion they can do anything they want to Cyprus because it does not pose a systemic risk to the eurozone. 

Now, after the medicine has been swallowed, key officials like the German finance minister have gone on the record to say Cyprus could not be left to go bankrupt because it would hurt the eurozone and EU. 

“So, Cyprus became systemic,” said Vassiliou.

Regarding the unprecedented haircut on depositors imposed on Cyprus, “for the first time in the history of the EU”, Vassiliou said the argument that things would have been much worse had the banks been left to go bankrupt as has happened many times in the US since 1933 was “simplistic”. 

He highlighted the massive role played by the Federal Reserve to help and save US banks from closure over time.  

The initial decision to impose a haircut on guaranteed deposits, despite being rectified a week later, sent a message to the whole world: “Do not trust banks in the south (of Europe), only banks in the north”.  

Even if a bank is healthy and well run in countries like Italy, Spain, Portugal, Greece or Cyprus, it has to suffer. 

“If a bank is not run well but lives in the North whether it’s Germany, Sweden, Finland, that’s OK because it’s northern. The message that has been sent around the world is therefore that no deposit in a bank is safe, if it is in the south...That’s why people now are afraid to make deposits.”

Vassiliou pointed out that Britons, French and Germans, for example, have various ways of saving wealth. But in Cyprus, the only way to save was to buy shares or bonds in the banks, he said, referring to the wiping out of shareholders in the island’s two biggest banks. 

The former president said he made the point to a number of MPs around Europe, that the shareholders of Credit Agricole or Barclays or Deutsche Bank probably do not represent more than half a percent of the population of the country they are based in, if that. 

“In the case of Cyprus, the shareholders of the two banks, Bank of Cyprus and Laiki bank were nearly 70 per cent of the total population. So you were imposing something that was attacking not the so-called Russian oligarchs but practically every Cypriot household,” he said.

Regarding talk of leaving the euro, Vassiliou was adamant, that despite the fact Cyprus was not treated fairly “and that’s my conviction”, the country must remain in the eurozone and prove it is a small but valuable member of the EU.

Leaving the euro and devaluing the Cyprus pound would bring greater inflation, but not necessarily greater competition. 

You become more competitive by increasing your productivity and adopting advanced new technologies, not devaluing your currency, he argued. 

“If Cyprus or Greece or Italy get out of the eurozone, they will be less competitive, and the eurozone will disappear. Maybe that is to the benefit of some people or some countries but it is certainly not to the benefit of the world.”

Asked about ways Cyprus could claw its way out of the crisis, he said the government must ensure the tourist and business services sectors remain strong and continue to develop, even with certain changes.  

He slammed the decision to maintain capital controls on the banking system. 

On the future of Europe, Vassiliou noted the dream of the EU was born on the graves of nearly 100 million people lost in two World Wars. 

“Hence the dream of the European Union became a reality. And today, within the globalised world, you understand that if tomorrow there is no European Union, there would be no Europe.”

The only way forward is a closer, more integrated EU with a single banking union, he said.

Former president George Vassiliou: the message is that no deposit is safe anywhere