Flight delays 

EIGHT flights to and from Cyprus’ airports are expected to be affected by a strike announced by Greek air traffic controllers today.

The strike, starting at 12 noon until 4 pm, is expected to affect an estimated 1,200 passengers, on various airlines.

According to Cyprus airports Spokesman Adamos Aspris, the strike will affect four arrivals and four departures, between Larnaca and Paphos on the one hand and Athens, Thessaloniki and Patras on the other.

Aspris further said that the airlines are expected to inform their passengers by morning whether their flights would be cancelled or rescheduled.

Shot suspect clinically dead 

A 34-YEAR-OLD man who was shot by a police officer on Monday as he was allegedly robbing a bakery on knifepoint has been declared clinically dead, reports said yesterday. 

State broadcaster CyBC said the 34-year-old’s family intended to donate his organs. He was shot by a plainclothes police officer in the foot, chest and head. 

Police have handed over closed circuit TV footage and other evidence to a three-person committee appointed by the attorney-general. Justice Minister Ionas Nicolaou refused to comment on the case yesterday, telling CyBC that it was up to the committee – not himself – to establish what had happened.

THE GRAB on bank deposits that accompanied Cyprus' bailout could be repeated elsewhere in the eurozone, and the bloc's banking union may not be strong enough when it is introduced, Standard & Poor's said yesterday.

"We believe that the events in Cyprus highlight the increased reluctance of financially stronger eurozone countries to make their taxpayers' funds available to recapitalise banks outside their home jurisdictions," the credit ratings agency said in a report.

"For this reason, although the key features of the Cypriot banking system are not shared by other eurozone countries, we consider that the bail-in may indeed create a precedent."

Speaking at the London School of Economics, Athanasios Orphanides, who headed Cyprus’ central bank during much of the run up to the crisis, slammed the handling of the situation by both the island's government and eurozone leaders.

"I read this (deposit grab) as another Deauville," Orphanides said, referring to the groundbreaking agreement between German Chancellor Angela Merkel and then French President Nicolas Sarkozy to impose losses on Greek bondholders.

"It is not yet clear what has been done to the banking sector in the periphery... The issue is how this may play out going forward."

S&P's report also raised concerns that the eurozone's plans for a banking union - designed to break the link between costly bank bailouts and unmanageable sovereign debt levels - may fall short of requirements.

The union is due to come into force by mid-2014 but there has been substantial backsliding on the original blueprint, with Germany in particular resistant to committing taxpayers' money to supporting banks outside its borders.

S&P credit analyst Richard Barnes said the increasingly "minimalist"-looking plans would "do little to make the eurozone a more cohesive monetary union or address banks' direct and indirect dependence on the creditworthiness of their national governments."

"Unless the banking union delivers greater integration than currently appears achievable, the creditworthiness of banks will likely remain dependent on their home sovereigns' creditworthiness. Therefore, they would remain vulnerable to any further deterioration in the operating environment," he added.

WHEN THE Cyprus bank run began earlier this year, Russians set much of the pace. Documents seen by Reuters show that as the island headed towards financial meltdown in March, most notable among companies transferring money from the country's two main banks were Russians and East Europeans.

At least €3.6 billion was removed in two weeks by big depositors, according to the documents. Though many companies listed initially appear obscure, a Reuters analysis shows a significant proportion are vehicles for foreign investors more at home in Moscow or Kiev than Nicosia.

The lists give an insight into the March crisis and how Cyprus, with a population of just 1.1 million, had amassed  bank deposits that peaked at €72 billion - more than four times the island's GDP.

Prepared in April by private sector lenders Bank of Cyprus and Laiki Bank, and passed to lawmakers by the island's central bank, the documents list 5,323 transactions, most previously undisclosed. They detail transfers of €100,000 or more from Bank of Cyprus and Laiki Bank in the two weeks before Cyprus closed its banks on March 16 as it desperately negotiated an international rescue.

Reuters analysed 129 companies that each transferred €5 million or more over the two-week period, collectively accounting for €1.9 billion.

Of those companies, 95 could be traced. 

Out of that group, 34 have links to Russia, five have links to Ukraine and two to Kazakhstan. The remainder comprise companies from Cyprus and other countries including tax havens such as the Cayman Islands, the British Virgin Islands and the Dutch Antilles. By value, more than half the transactions were made in dollars.

While the transfers appear mostly related to moving money out of Cyprus, Reuters could not establish where the funds went. It is possible some transfers were between banks within Cyprus.

Deposits that did flow out of the country had to be funded by emergency liquidity assistance from the European Central Bank, according to analysts. In effect, the ECB was paying for depositors, many of them Russian, to remove money from Cyprus before those depositors could be compelled to contribute to the international rescue of the island.

As debts threatened to overwhelm Cyprus early this year, money began to flow out of the country in fluctuating amounts. In January €1.7 billion left the island and a further €900 million in February, according to Central Bank of Cyprus figures.

The run accelerated in March as Cyprus found it had few friends among international institutions suffering bail-out fatigue. Many of the biggest transfers were by firms linked to Russia.

One of the largest was listed under the name of UCP Industrial Holdings, which is recorded as moving €80.2 million out of the Bank of Cyprus on March 7. UCP Industrial Holdings is part of United Capital Partners, a $3.5 billion Russian investment firm led by Ilya Sherbovich, a former head of investment at Deutsche Bank Russia and now a board director of the oil giant Rosneft.

Sherbovich, whose UCP fund recently acquired a stake in VKontakte, a fast-growing social network known as the "Russian Facebook", told Reuters: "Our group has several dozen legal entities, and some of them have accounts at Bank of Cyprus, but we don't use those as primary accounts.

"Anybody serious who works on financial markets wouldn't have left any significant amounts in the Cyprus banks. Very simple reason: Look at the share price chart of the Bank of Cyprus. It went to zero many months before the freeze happened."

He could not confirm the transaction listed in the Cypriot documents and said his companies did not keep big deposits in Cyprus. A spokeswoman for UCP said the transaction "must be a mistake or incorrect information".

On March 16, the Cyprus government shut banks amid discussions over imposing losses on depositors as the price for an international rescue. On the day before, a company called Trellas Enterprises moved 2 billion roubles ($63.85 million) out of Bank of Cyprus. Trellas Enterprises is majority-owned by Maxim Nogotkov, an entrepreneur who controls Svyaznoy, one of the biggest retailers of cell phones in Russia. Nogotkov, 36, is listed by Forbes as having a net worth of $1.3 billion.

Nogotkov confirmed that he controlled his mobile phone and banking interests in Russia through Trellas, but declined to comment on the transfer recorded in the bank list.

"We never comment on financial transfers or mergers and acquisitions activity," Nogotkov said by telephone.

Asked whether he was considering restructuring his business interests in light of Cyprus' financial meltdown, Nogotkov said: "Not actively. We don't have any urgent decisions to restructure (the business)."

Another company illustrating the Russia connection is O1 Properties Limited, which moved €10.1 million out of Bank of Cyprus. The company is controlled by Boris Mints, a Russian politician turned businessman, and this year bought the White Square business centre in Moscow for $1 billion.

In the 1990s Mints was a state official handling issues relating to property and local authorities. From 2004 until 2012 he was chairman of the board of Otkritie Financial Corporation, which describes itself as Russia's largest independent financial group by assets. He is now president of the firm.

Mints was not available for comment. A spokesman for O1 Properties said: "O1 Properties keeps an account at the Bank of Cyprus to use it for regular business activities. We didn't know that Cyprus banks (would) shut. O1 Properties suffered losses. We do not comment (on the) total loss."

The troika of the European Commission, the European Central Bank and the International Monetary Fund insisted on tough terms for providing billions to stop Cyprus going bust. As talks progressed, speculation began to spread that any package for Cyprus would include levying money from bank depositors - an unprecedented move that came to be known as a bail in, rather than a bail out.

The impact of what politicians and officials said - and did not say - is reflected in the pattern of fund outflows.

On March 4, depositors withdrew €261 million from the two banks, according to the transfer lists. Late that day, Jeroen Dijsselbloem, president of the Eurogroup of finance ministers in the eurozone, was asked whether the rescue of Cyprus would affect bank depositors. He did not give a clear  answer. The next day depositors yanked €315 million out of the banks.

Account holders were further unnerved on March 5 when Panicos Demetriades, the central bank governor, publicly acknowledged for the first time that depositors might lose some of their money. Over the next two days transfers leapt to €342 million and €491 million ; the latter figure including the €80.2 million withdrawn by UCP Industrial Holdings.

As fears of losses mounted, Russians were not the only depositors who transferred large sums of money from the tax haven's banks. There were also Cypriot companies, individuals both Cypriot and foreign, and the occasional well-known international firm.

These included Apax Partners, a private equity group based in London. A subsidiary, Apax Mauritius Holdco Ltd, moved €68.8 million from the Bank of Cyprus on March 8. A spokeswoman for Apax Partners confirmed that it controlled Apax Mauritius Holdco but declined to comment further.

Previous news reports have noted how the Electricity Authority of Cyprus transferred €19 million out of Laiki Bank just days before it was closed. The documents seen by Reuters show the authority also transferred €22 million out of Bank of Cyprus between March 1 and 15.

The Electricity Authority said there was nothing unusual in the transfers. "This represented payments for heavy fuel oil ... our annual fuel costs are €650 million," said Costas Gavrielides, a spokesman for the authority.

While some readily identifiable companies appear on the lists of transfers, what is striking is the complex nature of many entries.

Glenidge Trading, which transferred €22.5 million out of the Bank of Cyprus, is registered in the British Virgin Islands, a tax haven often favoured because of its British-based legal system and lack of transparency. Glenidge was the vehicle through which a Cypriot company called DCH Investment UA Limited acquired an interest this year in the Karavan group of shopping malls in Ukraine, according to local reports and Cypriot and Ukrainian corporate filings.

In turn DCH Investment UA Limited is controlled by one of Ukraine's richest men, Oleksander Yaroslavsky, according to corporate filings. A representative for Yaroslavsky did not respond to requests for comment about Glenidge and the Cypriot bank transfer.

Some companies that made several of the largest transfers could not be traced. They include Jarlath Limited, which moved €76 million, and Accent Delight International, which moved €27 million.

Also on the list is Rangeley Services Limited, which transferred €9.3 million from Bank of Cyprus on March 15. A company of that name is registered at an address near Leeds in Britain and owned by Jason Rangeley, who is described in company records as an agricultural contractor.

But when asked if the transfer of €9.3 million was anything to do with him, Jason Rangeley said: "No ... I wish it was."

Rangeley, a self-employed farmer, said he had set up his company because he had hoped to buy a few sheep. "It just never came off." He said his company is dormant. It remains unclear who owns the company involved in the Cypriot transfer.

THE GOVERNMENT and parliamentary parties agreed on the need to exit the bailout programme as soon as possible yesterday though showed little sign of consensus on how to do so exactly. 

Speaking after a lengthy session of the National Council, a body initially set up to advise the President on the Cyprus problem, government spokesman Christos Stylianides said the main focus of yesterday’s meeting was the economic situation. Members were also briefed on Foreign Minister Ioannis Kasoulides’ recent contacts in relation to the Cyprus problem.   

Those present confirmed that the priority right now was the handling of the economic crisis, though this did not mean the Cyprus problem was being relegated to second place, said Stylianides. 

He said the long meeting was held in a “very constructive climate” with all parties tabling their own proposals on how to get out of the crisis. 

“After the whole discussion, it transpired that the majority of political forces consider that the effort for a speedy exit from the memorandum and loan agreement should be completed within the eurozone and the euro.”  

Only two parties, AKEL and the Greens, supported the idea of a Cyprus exit from the euro in the process of getting out of the European Stability Mechanism, said Stylianides. 

Asked about AKEL’s proposal, the spokesman the government disagreed with the main opposition party on exiting the euro: “We have repeatedly expressed the view to those who want a quick exit from the memorandum, that this will happen through its implementation. The more faithful and disciplined implementation of the memorandum there is, the quicker we get out of it.” 

Stylianides welcomed a series of “positive developments”, referring to the €2 billion already released from bailout funds, another €1 billion due next month, and the “positive indication” on Cyprus’ anti-money laundering (AML) structures. 

However, the Cyprus Mail has seen the summary prepared by the troika for the Eurogroup on the Monevyal/Deloitte audit of Cyprus’ money laundering standards, raising questions as to whether the government is choosing to see the glass more half full than empty. 

The spokesman highlighted the fact that a major Russian bank has decided to keep its operations in Cyprus, showing confidence in the Cypriot economy. 

“We strongly believe that proper implementation of the memorandum will give Cyprus even more political credibility and weight as a financial centre because it will certify that we are serious and that we want to get out of the loan agreement as soon as possible.”

The meeting, also attended by former presidents Demetris Christofias – whose government is widely seen as being responsible for the current mess - and George Vassiliou was held in a “positive climate” though AKEL and the Greens, disagree with staying in the eurozone, said Stylianides. 

“The majority, prevailing view is that the great battle for a quick exit from the memorandum and the loan agreement will take place within the eurozone,” he added.   

AKEL leader Andros Kyprianou questioned how Cyprus could release itself from the grip of the memorandum by choosing to implement it. 

He bemoaned the fact that AKEL’s proposal for a euro exit was not studied in-depth.  

Greens deputy Giorgos Perdikis said he was not at all satisfied with outcome of the meeting, which saw a “little tension” near its conclusion.

No decisions were taken on the many pressing issues like the Bank of Cyprus, emergency liquidity assistance and role of the central bank, he said.  

The Greens deputy suggested that everyone was in agreement on the need to take legal action against the European Central Bank and that the role of the governor of the central bank of Cyprus was “at best negative”, but that nothing was planned to deal with these issues. 

The lengthy meeting was held in a 'very constructive climate' (Christos Theodorides)

CYPRUS’ banks suffer from “systemic deficiencies” in implementing anti-money laundering (AML) measures, according to a troika report summarising the results of two audits on credit institutions on the island. 

The four-page summary drawn up by international lenders was distributed to the Finnish media yesterday summarising the assessments by the Council of Europe’s money-laundering watchdog Moneyval and private firm Deloitte. 

The summary, seen by the Cyprus Mail, states that between 2008 and 2010, Cypriot banks reported not a single suspicious transaction under anti-money laundering regulations, and flagging only one in 2011 and “a few” in 2012.

This despite Deloitte’s forensic analysis of sample customer transactions during its short investigation, identifying 29 potentially suspicious transactions during the last 12 months, none of which were reported by the Cypriot banks.

Banks’ current customer due diligence measures, i.e. the steps taken to ensure the institutions know their clients and understand what risks are inherent by doing business with them, are insufficient, the summary said.

Audited institutions did not appear to uphold accurate and well-documented customer profiles “and therefore were not consistently in a position to understand the purpose of the account, define the customer’s business economic profile and evaluate the expected pattern and level of transactions,” the report said.

Cited examples included “missing or insufficiently detailed” documentation on customers’ source and size of wealth and annual income, where customers’ money came from and where it was expected to go, as well as “overly generic descriptions of business activity and account purpose”.

Banks also appeared to be “overly reliant on third parties in providing customer due diligence information in the absence of a risk-based verification of the underlying information provided”.

According to the summary, an estimated 75 per cent of banks’ international business was not directly sourced by the banks themselves but came from Cypriot introducers - rather than being directly sourced - who would also provide the customer due diligence information. 

In some cases, banks are at least one step removed from direct contact with the beneficial owners, i.e. the true owners of assets and property, “and even further removed where chains of introducers are used”. 

Deloitte said that 70 per cent of “the most complex ownership structures” have nominee shareholders and an average of three layers between the customer and beneficial owner, the summary said. But the identity of the beneficial owners through an independent source was only identified in 9 per cent of those cases.

 “While identifying no regulatory weaknesses, both reports suggest that there are substantial shortcomings in the implementation, by banks, of AML preventive measures,” the document said.

The summary also said that Moneyval’s findings significantly revised “its previous, more favourable assessment of Cyprus’ AML system” without specifying why. 

Deloitte looked at 390 customers, most of whom were top depositors and top borrowers, across six credit institutions with over €2.0 billion in deposits. Top borrowers accounted for 15 per cent of total loans while top depositors accounted for 10 per cent of total banking system deposits.

Cyprus’ Finance Minister Harris Georgiades said this week that the AML reports did not justify a stricter approach by Cyprus’ EU partners but deficiencies needed to be integrated in an AML action plan. 

Cyprus has shut down its second largest bank and is restructuring its biggest bank, as part of the conditions for a €10 billion bailout. Last night the IMF approved €1 billion for three years as its part of the deal. The approval allows for the immediate disbursement of around €86 million.

Workmen dismantled all 'Laiki' and 'Popular' signs from the bank's landmark headquarters in Nicosia yesterday. (Christos Theodorides)

FORMER President Demetris Christofias attended yesterday’s National Council meeting on the economy. Could the politician, who bears the largest share of the responsibility for the economic catastrophe, have had anything of value to say at such a meeting? Could the man whose poor judgment and irresponsibility demolished the economy make a meaningful contribution to how we should rebuild? We think not.

Christofias was invited to yesterday’s meeting not because of the valuable contribution he would make to a discussion about the economy but because of protocol - all former presidents remain members of the National Council and are welcome to attend meetings. George Vassiliou was also present. We would have thought that Christofias would have been ashamed, or at least embarrassed, to attend a meeting to discuss the mess he had made during his term, but we were wrong. 

Perhaps he was there to argue in favour of AKEL’s idiotic proposal for an ‘orderly exit from the euro’ and the return to a heavily devalued Cyprus pound. This proposal, which AKEL has been promoting as some magic formula that would eliminate all the problems being faced by the economy, was the main reason President Anastasiades called the meeting. AKEL’s proposal could, thus, be officially submitted and be forwarded to the experts of the National Economic Council to evaluate it and give their views.

Anastasiades’ calculation is that once the experts have picked the proposal apart and issued their conclusions, the communist party’s campaigning would lose all credibility. Then again, calling a meeting of the National Council to discuss AKEL’s resoundingly idiotic proposal gives it significance it does not merit. We hope the president’s calculation proves correct, even though rational arguments have never stopped our politicians uttering meaningless slogans.

The most fashionable slogan now is that we ‘must disengage from the memorandum’. AKEL’s chief Andros Kyprianou used the slogan repeatedly after yesterday’s meeting and so did EDEK leader Yiannakis Omirou who acknowledged that first the stabilisation of the financial sector had to be secured. EDEK would soon submit its own proposals for the disengagement from the memorandum and the loan agreement. He omitted mention that an economic forum organised by his party a few days ago, concluded that an exit from the euro would be catastrophic. 

Yesterday’s meeting would have served a useful purpose if it exposed the sheer stupidity of the demand for the exit from the euro and disengagement from the memorandum. It is unlikely that it would. We suspect that the demand for the disengagement from the memorandum will become as popular as politicians’ meaningless call for a fair, just and lasting settlement of the Cyprus problem.    

THE PREVIOUS government’s economic policy was wide off the mark, leading to devastating consequences for the country, said former finance minister Michalis Sarris yesterday before the committee of inquiry looking into Cyprus’ near financial collapse. 

The delay by Demetris Christofias’ government in commencing substantive negotiations on a loan agreement with the troika proved disastrous for the economy, said Sarris who served as finance minister under the late Tassos Papadopoulos and in the first five weeks of President Nicos Anastasiades’ government.  

Sarris took part in both Eurogroup meetings in March which resulted in the first ever “bail-in” in the eurozone, effectively using bank depositors’ money to wind down Laiki and restructure Bank of Cyprus.  

During his testimony, Sarris outlined the mistakes of the previous government, referring to Christofias’ increase in spending on social and other benefits and overzealous protection of the rights and benefits of highly-paid public employees. 

He also discussed his brief stint in charge of Laiki Bank in 2012 and his removal from the bank.  

Responding to a series of questions by committee chair Giorgos Pikis, Sarris went over the details of the crucial events as they unfolded at the first Eurogroup meeting on March 15, as well as the lead up to them, going as far back as 2008 when Cyprus joined the euro and Papadopoulos handed a fiscal surplus to the Christofias government. 

Cyprus’ healthy financial indicators meant the country entered the eurozone in a strong position and was able to neutralise intentions, mainly from Germany, to use euro entry as a pressure point for a solution of the Cyprus problem. 

However, the former World Bank director said the clouds of the global financial crisis were already forming in 2008, and measures should have been taken to prepare for that. 

“We could have made adjustments (but) we didn’t,” he said. 

When the time came for real negotiation in Brussels, the “Damocles’ sword” was visibly hanging over the island, seriously restricting Cyprus’ negotiating position. 

Despite desperate efforts, “we had lost all credibility, and even when we told them we’re prepared to fast for ten years to pay our debts, they did not believe us”.  

So by the time March, 2013, arrived Cyprus’ credibility was below zero, and the European appetite to make a victim of Cyprus huge.  

Sarris argued that the government had three opportunities to negotiate a better bailout agreement with dignity: before May 2011 when Cyprus was locked out of international markets; in July 2011 after Mari and in October 2011 following the massive losses sustained by the Greek sovereign debt haircut. 

Instead of seeking the help of Cyprus’ EU partners after the Mari explosion, the government chose to borrow €2.5 billion from Russia.

“The Russian loan allowed us to continue, with (state) expenditure being greater than revenue, and to avoid structural changes.” 

The former minister described the following developments as the worst that could have happened to Cyprus. 

“Instead of going to the European Stability Mechanism immediately with a programme, we continued for another 18 months with the wrong economic policy.”  

Asked where the government should have taken action, Sarris said social spending doubled between 2008 and 2010 from €1.5 billion to €3 billion. And this from a state which already provided help to the most needy and “could not be accused of being ruthless before 2008”. 

This untargeted social spending led to a lot of public money being wasted, he argued. 

When growth rates slowed and state revenue dropped, measures should have been taken to rationalise public spending on social benefits, the public payroll and hiring in the public sector.  

“We protected the high earners of today and sacrificed jobs for tomorrow. We created 50,000 unemployed so as not to reduce wages in state and semi-state organisations. That’s what we succeeded in doing in 2012.”

Regarding the Greek debt haircut, Sarris argued the government could have requested special arrangements like the Greek banks did, which received €50 billion for their recapitalisation. 

Cyprus could have asked for €3 billion since 50 per cent of its banks’ operations were in Greece.  

Regarding his turn at the helm of Laiki from December 2011 to August 2012, Sarris said he stepped down when central bank governor Panicos Demetriades let him know the bank’s new shareholder, the state, wanted to see a change in leadership.  

In a letter to Saris, Demetriades told Sarris that his comments on the need to adjust the country’s economic policy were damaging to Cyprus. 

Asked about press reports that his departure had something to do with refusing to lend Omonia football club €2 million, Sarris said he would have done the same with any team. 

Regarding his comments made on March 4, that a haircut on deposits wass a stupid idea, Sarris said he continues to believe that. 

On the Eurogroup negotiations, Sarris said Cyprus moved dangerously by delaying the start of substantive negotiations on a loan agreement, leaving it so close to the German elections in September 2013. 

Providing assistance to southern European countries is a big issue for the German opposition which tries to present German Chancellor Angela Merkel as “soft on the southerners” and ready to easily give away German taxpayers’ money to those countries.

Instead of acting on the pressing issues, the previous government was fighting battles that had no relevance to the needs of Cyprus, he said, a likely reference to Christofias’ pledge to preserve the cost of living allowance and 13th salaries. 

As German elections loomed, the German position towards Cyprus hardened, he said, with German Finance Minister Wolfgang Schaueble with whom he met repeatedly saying he would never want to be in Sarris’ position.  

By the time real negotiations got started, the IMF and Germany were convinced about the need for a depositors’ bail-in. 

Sarris said the Cypriot delegation was shocked when they heard EU Commissioner Olli Rehn propose a haircut of 3 per cent on insured deposits, 7 per cent for deposits up to €500,000 and 9 per cent for over that figure.  

EU officials have strongly hinted in the aftermath of the Eurogroup meeting that this was a Cypriot proposal but Sarris insisted yesterday that Cyprus was the only country highlighting that deposits under €100,000 were meant to be guaranteed. 

Sarris said Schaueble told him the new Cypriot government had two choices: it could lump a €17 billion debt on the next generations of Cypriots and tax the children and grandchildren of today’s citizens of Cyprus to pay off this debt; or the non-Cypriots could lose some money, mainly the rich depositors who “had a good time” in the last 10-15 years in Cyprus. 

Sarris said it was crystal clear in the Germans’ mind that it was politically and economically correct to have a solution which includes Cypriot depositors.  

According to the former minister, the European Central Bank had already decided that if the Cypriots refused a bail-in, the island’s two biggest banks would be closed down. 

Asked if the Cypriot delegation, during the late night Eurogroup meetings last March, referred to the haircut as being a violation of the human rights of depositors, Sarris said this was raised, particularly with reference to the right to property. 

EU citizens have been asked in the past to pay for the mistakes of governments’ bad economic policies, in the form of violating contracts, pensions and salaries. 

However, in Cyprus, it became an issue of personal property, raising the issue of EU principles and human rights.  

According to Sarris, the Europeans took this into consideration but in their own way, focusing on what they considered the fairest way to share the burden of the crisis and avoid the complete destruction of the Cypriot economy.

He argued that the parliament’s rejection of the first proposal by the Eurogroup was wrong as it led to the closure of Laiki and to capital controls. 

Sarris told the panel, “the only euro you have which are equal to German euros are the ones in your pockets. All the rest are in doubt.”

Sarris at the inquiry yesterday (Christos Theodorides)

CYPRUS HAS finally requested the return of its very own piece of moon, originally gifted to the island around 40 years ago and lost during the chaos of the 1974 coup and invasion, according to the Associated Press. 
The tiny moon rock, weighing 1.14 grammes and taken from the moon’s Taurus Littrow valley during the 1972 Apollo 17 mission, was supposed to be a gift from then US President Richard Nixon to the people of Cyprus as a symbol of “the unity of human endeavour” and “hope of the American people for a world at peace”.
Around 270 moon rocks were scooped up by US astronauts between 1969 and 1972 and then given to countries and their representative governments around the world by the Nixon administration as an act of goodwill. Each rock, encased in acrylic, was proudly mounted on a plaque with the intended recipient’s flag.
However, over the decades, many of these little fragments of rock mysteriously disappeared, some stolen in the hope of earning big bucks on the black market, others lost in the aftermath of political turmoil.
Many of the moon rocks have been returned to their rightful countries over the course of time, such as the more recent case of the Nicaragua Apollo 11 moon rock found in the hands of a Las Vegas casino mogul.
In the case of Cyprus, however, the country never even got the chance to briefly enjoy the precious gift.
Initially, it was believed the moon rock went missing from the presidential palace during the tumultuous events of 1974. In 2007 however it came to light that the Goodwill Moon Rock was never actually given to the Cyprus government, but was instead kept at the US Embassy in Nicosia during the 1974 war until it could be officially handed over to the government.
When Roger Davies, the US ambassador to Cyprus, was assassinated in 1974, American diplomatic personnel were quickly evacuated and the moon rock mysteriously disappeared.  
Until just a few years ago, no one officially knew where it was. That is, until moon rock hunter and enthusiast, Joe Gutheinz located it.
The ex-NASA special agent and current professor at the University of Arizona has made it his mission to locate as many missing moon rocks as possible and return them to their intended recipients.
Helped by his students, he embarked on a search to track down the Cyprus moon rock, discovering in the process a most unique set of circumstances which led to the rock’s disappearance.
In 2009, he discovered that the Cyprus moon rock, complete with the accompanying plaque and flag, had been put up for sale on the black market by a US diplomat’s relative who took the rock back to America following the Cyprus invasion.
Gutheinz adopted a two-pronged approach, encouraging US law enforcement to get involved and reclaim it while putting pressure on the seller to give the rock back.
Eventually, in May 2010, an unnamed person handed the rock to NASA.
Speaking to the Cyprus Mail at the time, Gutheinz said: “I would never have guessed that an American had kept the rock. In every other country it has been someone in the government of the recipient country that took the rock. I have not once come across a story like this in all the years I’ve been looking for moon rocks.”
Two years after it was given shelter at NASA’s Johnson Space Centre, Gutheinz expressed concern that the rock would never actually make it to its intended recipient.
“It needs to be returned to its rightful owner. These moon rocks should be seen by the children of your nation in a museum,” Gutheinz told the paper last June.
When the Cyprus Mail asked the Cyprus Foreign Ministry last year whether they would request the return of the rock, the reply was a muffled one, with the relevant official saying: “We don’t know much about it.”
However, according to the Associated Press, on Wednesday, “a Cyprus foreign ministry official said US authorities are favourably considering a Cypriot request that the rock be handed over”.
The official said a number of bureaucratic hurdles need to be overcome, meaning it will still take some time before the rock is handed over to the Cyprus government, some 40 years after initially planned. 
Unless Cyprus sets up its own space agency, this tiny rock could be the closest to the moon Cypriots will ever get.  Given the lack of interest in further moon landings by the US, perhaps the Cypriot government should avoid acquiring this valuable asset until after full implementation of the memorandum with the troika.

The Cyprus moon rock is currently with NASA

THE ASSOCIATION of Cyprus Travel Agents (ACTA) has said that despite a 20 per cent decrease in reservations since the banking crisis in March, there had been a turnaround in recent days.
Head of the association, Victor Mantovani told reporters ahead of the Travel (Taxidi)  2013 exhibition which opens today, that tourist arrivals were due to increase by ten per cent this summer.
“There are two worrying trends, the first is that unfortunately we lost two very critical months of reservations because from March 15 there was a sizable reduction in the flow of bookings... around 20 per cent of all markets outside Russia... and we estimate that this somewhat difficult period will continue until the end of May,” he said. “The second is that because of losing this period we are now entering the last-minute summer bookings with travel agents forced to reduce their prices by ten per cent,” he added.
It is estimated that by the end of the year tourism will be down between five and eight per cent according to head of the Cyprus Hotels Association (PASYXE), Haris Loizides, who was speaking after a meeting with Interior Minister, Socrates Hasikos yesterday, said he hoped the number of bookings would increase and that there would be a halt in the decline.
Representatives from PASYXE met with Hasikos to discuss state support for the  industry, and property tax which could affect hoteliers adversely.
“We received reassurances from the minister and his colleagues to the extent that we believe we are on the correct road,” Loizides said.
He said the industry was still suffering the effects of the Eurogroup meeting on March 15.
“We were expecting to see a bigger recovery in the flow of reservations but up until now things are still slightly numb and although there has been an improvement we have yet to return to the status quo,” Loizides said.
Hasikos said the safeguarding and development of the flow of tourists to Cyprus was of major concern for the government. He also said that although there were negative projections for the current season, he expressed the belief that there was still time to recover.
Taxidi 2013 will open today at 4pm in Nicosia at the Hellenic Pavilion, the Multiple Use Hall of the Cyprus State Fairs Authority and the adjacent Pavilion 4. The exhibition will run until 10pm tonight, from 4pm-10pm tomorrow, and from 2pm to 10pm on Sunday.
http://www.taxidiexhibition.com/home/schedule.htm

The tourism industry is urging residents to holiday at home this year to help beat the crisis.
The head of the Paphos regional board of tourism Nassos Hadjigeorgiou said this would be the message given to everyone who attends the three-day annual travel exhibition ‘Taxidi’ which opens in Nicosia today.
“In particular the Paphos tourism board is urging Cypriots and locals to spend the summer at home this year,” he said.
Hadjigeorgiou said officials are still unsure as to how the domestic market will react to the crisis. The exhibition may give them an idea what people’s intentions are.
“This is a good opportunity for people to explore the island and stay in Cyprus and spend their money here,” he said, adding that Paphos in particular, had so many areas of natural beauty, blue flagged beaches and many other things to do and see.
“There are a large number of hotels in Paphos which are offering special rates for domestic tourism,” he said.
Brochures can be downloaded from the board’s site, listed below.
One of the hotels offering special rates in Paphos is the five-star InterContinental Aphrodite Hills.
Maria Demosthenous the marketing and communications manager of the luxury hotel said: “We are fully supporting locals holidaying in Cyprus and we have a number of special offers for the local market to retain tourism on the island.”
She said that Aphrodite Hills was a luxurious destination and is suitable for those wanting to relax, as well as for sports enthusiasts looking for a golf or tennis vacation; or for an idyllic Cyprus holiday
Special rates for the summer include a June package ‘pay two nights and stay three.’ “This is also valid for any time of the week and includes the Whit Monday holiday,” she said, adding that there would also be special rates in July and August.
Bookings are already looking hopeful for the summer months, but we are hoping to encourage more people to holiday in Cyprus. I think that people are more hesitant to book than they were last year,” said Demosthenous.
Meanwhile, agrotourism officials are also hoping that the financial crisis may encourage more residents to holiday at home. With a choice of more than 90 properties online in 51 villages all over Cyprus, the prices for a holiday in traditional Cypriot surroundings are very good, says Evie Panayioutou.
“We need to garner more interest from the Cypriot market. We are attending the Taxidi exhibition where we will run some competitions. We will give three couples three free nights and we will also have some special offers,” she said.
The Cyprus Agrotourism Company deals exclusively with holidays in the countryside. These breaks are at traditional accommodation and visitors can walk nature trails, visit historical monasteries and archaeological sites and come away with a realistic picture of life in the country.
There will also be a number of special offers, which will run until October 31.
“Personally, I’m staying in Cyprus this year,” said Panayioutou. “Bookings are not the same as last year at this point… they are down… but when the banking crisis is taken into consideration, then they are at a satisfactory level.”
Even smaller family run hotels are dropping prices to encourage more residents.
The Paradisos Hills Hotel in Lysos in Paphos is a quiet family-run traditional hotel set in a stunning location overlooking a forest with views down to the sea. A popular destination with both residents and overseas visitors it is the winner of the Travellers Choice Trip Advisor Award 2013 for service.
The hotel’s Phillip Michael said: “It’s a difficult time for many people and we wanted to try and give the best prices that we can, so we have a special offer rate for June and July.”
Michael said that the usual price for a double en-suite room with breakfast is €102 a night but for June and July, the hotel is offering the same deal for just €75.
“We have to be realistic and we want our prices to reflect that,” he said.
For further information: Paphos Regional board of tourism 26818173 info@visitpafos.org    www.visitpafos.org.cy
Cyprus Agrotourism Company - 22 340071    helpdesk@agrotourism.com.cy
Aphrodite Hills Intercontinental hotel Reservations 26 829000 - Cyprus Toll Free 80001210
Paradisos Hills Hotel Lysos www.paradisoshills.com   Nikki or Soulla 26322287

The Akamas peninsula: just one of the many things to see in Paphos

THE GOVERNMENT yesterday decided to subsidise rent increases for businesses operating in government industrial estates while decreasing pension allowances for ex-community leaders.
Speaking from the Presidential Palace, deputy government spokesman Victoras Papadopoulos announced a series of measures adopted by cabinet yesterday, starting with a 10 per cent reduction in pension allowances of former community leaders.
“The reduction is part of efforts to consolidate public finances and due to the fact that community heads are otherwise employed and their retirement is covered by other pension plans such as, for example, the social insurance fund, and others,” said Papadopoulos.
Cabinet also decided to provide a grant to cover the 15 per cent expected increase in rents in the next five years for businesses operating in government industrial areas.
This measure will apply from the date of the President’s announcement of measures to restart the economy on April 19, 2013.
The loss of revenue for the state in the next five years will come to around €3m.
The measure aims to help businesses renting properties on government industrial estates to minimise their costs, said Papadopoulos.
Cabinet yesterday approved a legal amendment related to President Nicos Anastasiades’ pledge to clean up the public sector and its reputation for wasting public money.
When tabling the state budget or the budget of any legal entity governed by public law to parliament, the legal amendment obliges the relevant body to submit a detailed report on compliance with and implementation of observations included in the latest annual report of the auditor-general.  
Other decisions taken yesterday by the council of ministers include the decision to donate two small buses in the possession of the Road Transport Department to the Cyprus Diabetic Association.
Also, a Cooperation Agreement was approved between the Cypriot and Greek foreign ministries related to overseas and repatriated nationals.
Papadopoulos explained that Cyprus and Greece will cooperate and coordinate activities related to supporting networks and organisational structures of overseas Hellenes, promoting national issues, returnee issues, and utilising EU funds for expatriates of member states.

PARLIAMENT last night passed a law designed to enable cooperative banks to raise capital on their own so as to minimise their need for possible state assistance.
The government-drafted legislation makes it mandatory for cooperative credit institutions to issue shares for the purposes of raising capital, by converting cooperatives from unlimited liability to limited liability companies.
By law, all 92 cooperatives have now been converted into limited liability shareholder companies. The cooperatives are allowed to issue class B shares, and to purchase class A shares in addition to class B shares.
The new rules are designed to fall in line with a deal signed in April between Cyprus and the ‘troika’ of international lenders. Under the memorandum of understanding, cooperative credit institutions are to come under the regulatory supervision of the Central Bank, and “they will be instructed to meet capital regulatory requirements by July 2013.”
The MoU states: “With a view to minimising state aid, cooperative credit institutions requiring recapitalisation should seek private sector participation no later than 31 July 2013.”
It goes on to say that Central Bank of Cyprus, in consultation with the troika, “will ascertain the viability of individual cooperative credit institutions and design a strategy for restructuring and recapitalising the sector.”
“This strategy, including the possibility of the application of mergers and restructuring, will be submitted…by end-July 2013 based on an assessment of capital needs and viability to be finalised by June 2013.
“The restructuring plans for the cooperatives will be submitted to the European Commission by September 2013. Cooperative credit institutions in need of aid from the state will not be recapitalised before their restructuring plans have been formally approved under state-aid rules.”
Any cash for recapitalising cooperative banks will be drawn from the €10bn assistance programme funded by international lenders.

DATA released by the banking regulator yesterday painted the picture of a robust Bank of Cyprus – at least on paper.
The preliminary consolidated balance sheet of Bank of Cyprus (BoC) – following a 37.5 per cent ‘bail-in’ of its own uninsured depositors as well as the absorbing of Laiki’s balance sheet – gave the lender a tier 1 capital ratio of 13 per cent.
Tier 1 capital, also known as the capital adequacy ratio, is a core benchmark of a bank's financial strength from a regulator's point of view. Tier 1 capital ratio is defined as the ratio of a bank's core equity capital to its total risk-weighted assets.
By way of example, a bank with €2 of equity receives a client deposit of €10 and lends out all €10. Assuming that the loan, now a €10 asset on the bank's balance sheet, carries a risk weighting of 90 per cent, the bank now holds risk-weighted assets of €9 (€10 x 90 per cent). Using the original equity of €2, the bank's tier 1 ratio is calculated to be €2/€9 or 22 per cent.
According to the Central Bank figures, the BoC’s preliminary consolidated balance sheet shows that, prior to the haircut of uninsured deposits, the bank’s tier 1 capital stood at -€785m. The bank raised €3.186bn through a 37.5 per cent haircut on deposits (already implemented), which brought its consolidated tier 1 capital up to €2.401bn. To this were added €703m in transferred assets of the ‘good’ Laiki for a consolidated total of €3.104bn of tier 1 capital.
The risk-weighted assets of BoC come to €24.001bn. Dividing this by the core tier 1 capital (€3.104bn) yields 13 per cent.
Total consolidated assets stood at €38.343bn, liabilities at €34.730bn.
The balance sheet also took into account a string of lawsuits filed by depositors against the decision to seize their cash. It assumed that if all the lawsuits were successful, the bank stands to lose €311m, which would lower its tier 1 capital ratio to 12 per cent.
But that’s still well above the capital adequacy ratio of 9 per cent under the Basel III accounting rules.
In its press release, the Central Bank did not explain why it had set 13 per cent as its target for the BoC’s adequacy ratio. But it stressed that the figures were provisional.
The regulator said the final size of the deposits haircut, via a deposit-for-equity swap aimed at recapitalising the BoC, would depend on a pending independent valuation of the assets of BoC and Laiki.
Under the deal struck with international creditors, the valuation must be completed by the end of June. The April 2013 memorandum of understanding with the ‘troika’ of international lenders states that “Following that valuation, and if required, an additional conversion of uninsured deposits into class A shares will be undertaken to ensure that the core tier one target of 9 per cent under stress by end-programme can be met.”
The regulator announced also that the independent auditor who will conduct the valuation has been selected, but that the actual valuation would get underway once the vacant seats on the board of the Central Bank are filled, given that the decision to appoint the auditors requires a quorum.
Determining the final haircut, the conversion of deposits to equity, and thus the new shareholder base of BoC is the key step towards returning the lender to normalcy.
The bank, which lacks a CEO, has been under administration by the regulator since March – a source of friction between the Central Bank and the government, which would like to see the BoC return to normal operations as swiftly as possible.
Currently, 60 per cent of the uninsured part of BoC deposits - the 37.5 per cent already subjected to a haircut, plus another 22.5 per cent - is susceptible to a conversion into equity. The remaining 40 per cent of uninsured BoC deposits is for the time being not subject to such conversion but 30 per cent of it remains frozen.
Perhaps in a bid to take pressure off itself, the Central Bank said yesterday that the appointment of a CEO was “expected over the next few days.”
The Central Bank’s press release yesterday came just as the ruling DISY party tabled a legislative proposal which aims to bring the BoC out of the state of administration.
The bill envisages placing 22.5 per cent of BoC’s uninsured deposits into an escrow account in tandem with appointing an escrow agent with the sole job of overseeing the 22.5 per cent of ‘frozen’ deposits. In effect it would replace the BoC’s administrator by the escrow agent, and is intended to unlock the remaining 40 per cent (100 minus 37.5 minus 22.5) and make it immediately available to the cash-starved market.

The balance sheet took into account a string of lawsuits filed by depositors against the haircut, the CBC says

THREE Russian warships will today be making a port call at Limassol, the defence ministry confirmed last night.
Defence minister Fotis Fotiou has been invited aboard one of the vessels tomorrow, a spokesperson for the ministry said. He will be accompanied by the Russian Federation’s ambassador to Cyprus.
The ships will remain here until next Wednesday.
They include the destroyer “Admiral Panteleyev,” two amphibious warfare ships, the “Peresvet” and the “Admiral Nevelskoi,” as well as a tanker and a tugboat.
The ships left the Far-Eastern port city of Vladivostok on March 19 to join Russia’s Mediterranean task force, which currently consists of vessels from Northern, Baltic, and the Black Sea Fleets.
The Russian Defence Ministry announced setting up a naval task force in the Mediterranean in April, while the country’s Defense Minister Sergey Shoigu has said a permanent naval task force was needed to defend Russia’s interests in the region.
The Mediterranean has recently become a hotspot of military muscle-flexing as global powers seemingly vie for influence.
NATO has been staging major naval war games involving several countries, last October holding an exercise code-named Noble Mariner 12. Russia held its largest naval exercises in the region this January, with drills spanning both the Black and Mediterranean Seas. The media quickly linked both the NATO and Russian war games to the situation in Syria.

Making a port call at Limassol

THE UNIVERSITY of Cyprus’ medical school will start as scheduled in September despite a bill which was submitted to parliament to postpone the opening.
Health Minister, Petros Petrides, told state radio yesterday morning that plans to open the medical school were in their final stages and that it would open as planned in September.
“We have already met on many occasions with university officials and spoken to the university’s rector as we are in the closing stages of the school’s opening,” Petrides said.
The minister said any plans to delay opening the school would cause huge problems as many students have already sent their applications and will be sitting exams in the next few days.
“Hospital employees who want to work at the medical school will have to fill out an application if they wish to cooperate with the university and will then be asked to sit an exam,” he added.
Petrides revealed that during a recent visit to the World Health Organisation headquarters in Geneva he was asked by three health ministers from Middle Eastern countries how their students could apply to the medical school.
“Attracting foreign students during these financially difficult times can help the economy,” the Minister said.
In order to attract more foreign students, lessons will be carried out in both English and Greek.
DISY MP Andreas Themistocleous submitted a bill to parliament to postpone plans to set up the medical school and said that Cyprus faced a choice “of either getting real and actually looking at the country’s situation or else – and I’m willing to bet on this – destroying ourselves”.  He said it would cost the state €100 million a year to run, and that the country could not afford it right now.
The Cyprus Medical Association said on Wednesday that despite the crisis, matters of education and health needed to be treated differently and “with more sensitivity”. A medical school would contribute to upgrading the country’s medical practice improving health care provision, the association said.

OUR STATE may have had to be bailed out by the troika, in order to avoid bankruptcy, but many of the politicians and other rabble-rousers are still urging it to spend money it does not have. There has been a strong reaction to the government’s decision to abandon plans to establish radiotherapy departments at Nicosia General Hospital and Limassol Hospital, which had been a demand of pressure groups supported, not surprisingly, by all the political parties.
Even President Anastasiades was in favour of the establishment of the two radiotherapy departments during the election campaign. The government, presumably on the advice of the troika, has now decided that the state cannot afford to establish the departments, provoking protests by AKEL’s big-spenders and a pressure group that has been waging an ongoing campaign against the Bank of Cyprus Oncology Centre and insisting that treatment of cancer patients should take place at state hospitals.
While a radiotherapy department at Limassol hospital would make sense, if the state could afford it, because it would serve patients from the Limassol and Paphos districts, a department at Nicosia General Hospital would be a complete waste of money. The Bank of Cyprus Oncology Centre has a well-equipped radiotherapy department that treats all patients at present. According to health minister Petros Petrides, a department would cost €22 million to set up and €3 million a year to run. A department in Limassol should be set up when the state can afford it, but in the capital there is no need for another one.
However, Dr Petrides tried to appease the government’s detractors by disingenuously saying that a second radiotherapy department would be set up in Nicosia at the new Medical School of the Cyprus University. The only problem is that the government could yet shelve the opening of the high-cost school, which would be a very good idea, in these difficult times. We do not know whether this was also a suggestion by the troika, but we should be thankful to whoever came up with the idea.
A state with no money is in no position to set up a Medical School at huge expense and not charge fees to students (this was the previous government’s idea). If we were a very wealthy country we could have done this but it would be criminal for a poor state with no funds to waste money it does not have on a Medical School it does not need, especially as there is already private one operating.
Scrapping the plans for a second radiotherapy department in Nicosia and for a state Medical School are correct decisions in current conditions. We hope the government will also scrap that other multi-million, vanity project – the Culture Centre – as part of its drive to reduce state spending. If it does not, we are sure a word from the troika would force a decision.  

CONCERNS that lives would be put at risk were expressed by outraged deputies yesterday when it was revealed that four urgently-needed and long-delayed new regional ambulance stations would not now be going ahead.
The issue was discussed at a meeting of the House Health Committee, whose chairman Costas Constantinou, a DISY MP, said the move was due to limits being put on recruitment as part of the bailout deal.
The halt on hiring 49 newly-trained paramedics means the ambulance stations earmarked for Palechori, Limassol centre, Oroklini and Peyia will not happen.
Speaking after the meeting yesterday, Constantinou said the 49 paramedics had been in training for over a year to man the stations, and expressed his concern over the development.
“The finance ministry must find a way, regardless of the economic problems faced by the state, to fill the stations because clearly above and beyond any financial cost is the value of human life,” he said.
AKEL deputy Irene Charalambidou who had brought up the subject at the committee meeting said the creation of regional ambulance stations had been taken by the Cabinet as far back as 2007.
“In accordance with international standards there is a set time it should take an ambulance to reach the site of an accident to provide adequate emergency aid,” she said. “Staff has been trained, the stations are prepared and the ambulances are ready but they have not been put into operation, something which is putting human lives in danger,” she added.
Charalambidou went on to say that the health ministry’s pleas towards the finance ministry to man the stations had been desperate and had raised the issue of putting lives in jeopardy. She concluded that any negotiations with the troika and the bailout agreement should not compromise human lives.
DIKO MP, Athena Kyriakidou said she did not feel the government fully comprehended the subject of saving lives.
“We have asked for an amendment to be made so that retiring ambulance drivers will be replaced by the 49 trained emergency responders,” she said. The government is still currently employing untrained drivers for ambulances, she said.
Roulla Mavronicola, MP for EDEK noted that following the freeze on funding for radiotherapy centres the matter of the regional ambulance stations should be laid at the door of the troika.
She revealed that the state had spent €500,000 on training staff. “We expect the finance ministry to rescind its decision and go ahead with staffing and opening the ambulance stations,” Mavronicola added. She ended by saying that the committee would not accept any excuse which involved the bailout agreement or troika for not opening the stations. “We cannot allow lives to be endangered or for vulnerable groups of the population to be affected,” she concluded.
Speaking after the committee meeting, Greens MP, George Perdikis said society was now facing another cruel aspect of the bailout deal and a silly provision which had set quotas on recruitment.
“A small number of people need to be hired to save lives,” he said. He wondered whether the International Monetary Fund's, Delia Velculescu, a troika official, would accept living in an area where there was insufficient ambulance coverage. “Either the troika representatives are tough negotiators, or officials from the Republic who are in talks with them have not presented the facts properly,” he said.
“I cannot accept the excuse that the regional stations are not being put into operation because the troika does not allow it as it is the government’s responsibility to explain to them their necessity,” he concluded.
Peyia councillor, Linda Leblanc told the Cyprus Mail yesterday she felt the decision not to operate the stations after the money had already been spent to train paramedics, to build the stations and to buy ambulances was absolutely ridiculous.
“Opening the stations is really a matter of life and death as we have many elderly people living in Peyia who might require aid,” she said. Leblanc said it takes an ambulance an hour to travel to Peyia and back to Paphos General Hospital “if you are lucky”.
“It is not the time for the government to be meddling in quality of life issues like this one when they are giving out €20 million in compensation to Cyprus Airways employees,” she added.
With only the cost of hiring the paramedics left, Leblanc expressed the hope that the government would reconsider its decision as lives were at stake.
Head of the newly-trained paramedics, Michalis Savva, expressed his bitterness and sadness on behalf of the 49 newly-trained staff. “We feel we have been deceived by the government,” he said.
“We sacrificed the jobs we had, some of us were forced to move house and incur expenses and when the time came for the state to put us into use they left us feeling exploited,” he added. He went on to say that the worst aspect of it all was that human lives could be lost.
He revealed that the majority of the 49 newly-trained paramedics would remain unemployed and be forced to live off of their parents. “The cost to the government to hire 24 first-aid responders, which is the minimum requirement to efficiently run the regional ambulance stations, comes to €340,000 a year,” he said. He explained that the government’s immediate needs could be met by hiring only 24 first-aid responders but 49 were trained to insure the needs of the private sector would be covered also.
At the same time, the health minister announced yesterday that the University of Cyprus medical school would be going ahead. One deputy said on Wednesday it would cost €100 million a year, something the country could ill afford at the moment, he said.

Plenty of ambulances but not enough people to staff the four new rural stations as had been planned

THE NEW law aimed at enabling cooperative banks to raise capital paves the way for better running, more modern entities, the co-op banks’ supervisor said yesterday.
Constantinos Liras, Commissioner for the Cooperative Societies’ Supervision and Development authority, said that by having the right to issue shares, co-ops would be able to better run their finances in the future.
Parliament on Thursday approved government-drafted legislation making it mandatory for cooperative credit institutions to issue shares for the purposes of raising capital, converting them from unlimited liability to limited liability companies. Liras said that rather than having to undergo this step separately for all 92 co-ops, the move expedited the process, paving the way for “better-run, more modern” bodies.
Future steps include rationalising expenses, and merging smaller co-ops into bigger bodies, Liras said.
Under Cyprus’ memorandum of understanding (MoU) agreed with its international lenders, cooperative credit institutions are to fall under the regulatory supervision of the Central Bank and are expected to “seek private sector participation no later than 31 July 2013”.
The Central Bank in consultation with the island’s lenders will “design a strategy for restructuring and recapitalising the sector” including the possibility of mergers. Any institutions needing state aid may only be recapitalised after their restructuring plans are formally approved under state-aid rules, the MoU says. Cash necessary for recapitalisation purposes is due to be drawn from the €10 billion bailout aid that Cyprus has secured from its lenders.

THE GOVERNMENT expects borrowing rates to fall in line with a reduction in deposit interest rates, the spokesman said yesterday.
Christos Stylianides was speaking after a meeting between President Nicos Anastasiades, the finance minister and bank brass. The Central Bank governor was out of the country and did not attend. “For the first time in years we have had a fundamental reduction in deposit interest rates, which anyone who knows fundamental economics understands, comes with an analogous reduction in borrowing rates because of market rules,” Stylianides said.
He added that yesterday’s discussion made clear that the drops, both real and expected, would offer funding solutions to “productive sectors of the economy”.
Stylianides said they could not intervene in the free market, conceding however that both government and the banking regulator believe that lower interest rates would benefit the market. “There is also market competition and we hope this leads to a further reduction of interest rates,” he said.
However, ruling DISY leader Averof Neophytou said that his party had submitted a bill to penalise banks imposing over than a 3.0 per cent interest rate on deposits. He said he hoped efforts by the government and the Central Bank bore fruit so it would not be necessary to pass the bill into law.
If interest rates drop, then many more borrowers, households, and small to medium size businesses will be able to service their debt reducing negative impact to the whole of the economy and the banking sector, Neophytou said.
Anastasiades also met yesterday with the planning bureau’s executive team to discuss its new role in light of Cyprus’ agreement to a memorandum of understanding (MoU) with its international lenders.
The planning bureau is getting a fancy new name, and will now be referred to as the General Directorate of European Programmes, Coordination and Development. This is to reflect its upgraded duties, Stylianides said.
The Directorate, formerly known as the Planning Bureau, will be in charge of monitoring the MoU’s implementation and coordinate development policies set by the Anastasiades government. Civil servants from all the ministries will be seconded to the Directorate, Stylianides said.
Development proposals will be evaluated and prioritised “especially when it comes to formulating strategies to promote research and innovation,” Stylianides said. The Directorate will continue supervising EU funds for both the public and businesses including providing information to relevant parties.
Cyprus must now target its use of funds available via the European Union, Stylianides said.  “We need a better planning framework in light of the serious economic crisis, as well as evaluating development needs as they may arise at any given moment,” Stylianides said.

UNSCRUPULOUS individuals have been going door-to-door in Paphos falsely asking for money to help five-year-old leukaemia sufferer George Philippides who is due to go to Germany to receive a bone marrow transplant.
The fake collection has been going on for around 20 days with the culprits asking people to give no less than €20. The boy’s family, while they did issue a plea for bone marrow donors – two were found on Monday – never asked for cash.
“As a family we have not asked anyone for help. The family and friends will financially support my grandson’s trip to Germany. It is up to the doctors now as to when the transplant will take place,” Philippides grandfather, Iacovos Philippides said yesterday.
Young George and his parents will spend about 200 days in Germany for the boy to have the transplant and also recover.
“This is a crime against humanity and a crime against the goodness of Cypriot society. We have received so much help from people while we were looking for a bone marrow donor that it is shameful to think that some people are taking advantage of that goodness for their own financial gain. It also puts shame on our family. A friend of mine told me about this false fundraising and I also told a friend of mine who is in the police force in Paphos,” Philippides said. Police are now investigating.
Philippides said that he wants people to be warned so they do not give money to criminals during these hard times.
“When a donor was found for George we received many messages of joy and we also felt very happy to know that our search for a donor also helped other children who are going through similar problems,” Philippides went on to say.
Five viable bone marrow donors for Philippides who is suffering from leukaemia, were found earlier this week. The donors were found in Germany, Israel and the USA but only two were currently available. The search began in April.