By Elias Hazou

CYPRUS found scant support yesterday for any changes to its bailout programme, with eurozone finance ministers and officials dismissing the idea.

“Determined implementation of the programme is indispensable,” Jeroen Dijsselbloem, who chairs the Eurogroup meetings, told a news conference after the Eurogroup meeting, when went on until after midnight.

President Nicos Anastasiades had written to European Union leaders requesting modifications to the terms of the bailout. “It is my humble submission that the bail-in was implemented without careful preparation,” the President said in the letter.

The letter was discussed at last night’s Eurogroup meeting but the comments made ahead of the finance minister’s talks to set bank bailout rules for the bloc, indicated early on that little support would be forthcoming from Cyprus’ EU partners.

Going into last night’s meeting, European Economic and Financial Affairs Commissioner Olli Rehn said the bailout programme had only recently been agreed and “we will work on the basis of that programme.”

Luxembourg Finance Minister Luc Frieden likewise said Cyprus could not expect changes to its bailout deal.

It is “very unlikely that the Cyprus compromise can be opened up or another solution introduced. It was the best solution for Cyprus in the circumstances,” he said.

The problems in Cyprus were caused not by the bailout programme, but by its troubled financial sector, Dijsselbloem said earlier as he ruled out any more money for the island.

“It wouldn’t be a good thing for Cyprus because loans should also be repaid. This was the reason why we said the loan shouldn’t be more than 10 billion euros,” Dijsselbloem said.

“I assume that there is great incomprehension among all the colleagues,” Austrian Finance Minister Maria Fekter said. “I cannot imagine there is an alternative proposal that is better than what we worked out arduously and consensually.”

Officials from the ‘troika’ of international lenders – ECB, IMF and European Commission – also rejected the idea of tweaking the rescue package.

“There is no viable alternative than now implementing 100 per cent the strategy outlined in the [Cypriot] memorandum of understanding,” European Central Bank executive board member Joerg Asmussen said.

The ECB official went on to urge Cyprus to make every effort to restore confidence in its financial system, in order to implement the strategy outlined in the memorandum of understanding.

Other than Cyprus, euro-area finance ministers were set to hold a complicated debate on whether EU banks should be recapitalised directly through the European Stability Mechanism (ESM). The talks extended late into the night.

The island secured a €10bn rescue package in April to avert bankruptcy, in exchange for downsizing its over-leveraged banking sector.

It was a take it or leave it deal with the European Central Bank (ECB) threatening to turn off the tap of emergency liquidity to Laiki, which would have meant its immediate collapse and possibly that of Bank of Cyprus soon afterwards.

Thousands of uninsured depositors lost their savings in the wake of the ‘bail-in’, a first in the history of the eurozone debt crisis.

But the capital controls imposed to prevent a drain on remaining deposits have put a chokehold on transactions.

In his letter to EU leaders, the President had suggested the rescue package had not been well thought-out, resulting in a shock for the Cyprus economy, driven mainly by its financial services sector.

“An alternative, longer term, downsizing of the banking system away from publicity and without bank runs was a credible alternative that would not have produced such a deep recession and loss of confidence in the banking system,” the President said.

The government later clarified that it was not seeking to amend the bailout deal or additional loans, but rather to re-jig some of the aspects of the agreement.

In his letter, Anastasiades said the ‘bail-in’ of the two Cypriot banks, agreed back in March, made no distinction between long-term deposits earning high returns and money flowing through current accounts, such as company working capital.

The IMF meanwhile yesterday confirmed receipt of Anastasiades’ missive and said the organisation intended to respond to it.

At a press briefing in New York, IMF spokesman Gerry Rice declined to be drawn further, saying only that the IMF treats bailout programmes “on an ongoing basis.”

All rescue packages – not just Cyprus’ – are evaluated every three months, Rice said, adding that bailout programmes are “dynamic.”

However, Rice noted the government’s statement that it intends to fully comply with the terms of the loan agreement.

The IMF will be contributing up to €1bn of the total package.

By Mike Collett
Spain won by a landslide as expected but tiny Tahiti emerged with their reputations enhanced and their dignity intact despite their 10-0 loss to the world and European champions in the Confederations Cup on Thursday.
Fernando Torres scored four times, and missed a penalty, David Villa hit three, David Silva two and Juan Mata one as Spain scored double figures for the third time in their history.
The outcome of one of the most unlikely matches to take place in a senior FIFA competition was never in doubt and even Tahiti coach Eddy Etaeta said before the game his side’s chances of winning were “quite impossible”.
Despite the Group B hammering, Tahiti played some attractive attacking football against a second-string Spain side that still contained some of the biggest names in European football including Sergio Ramos and Pepe Reina.
“Often inferior teams look to break up the game and get aggressive, they play without spirit or hope. Standards aside,Tahiti showed a great example of how to go about playing football,” Torres told Spain’s Telecinco television after a record Confederations Cup victory.
“We have tried to show them respect in every sense. We tried to play well, to play simple football, and to score goals and these goals will be important for the next stage.”
Tahiti’s first meeting with European opposition was more of an occasion than a match in many respects, and the fans created a superb atmosphere in the newly refurbished Maracana, the venue for next year’s World Cup final.
They cheered every Tahiti pass and tackle and roundly booed Spain.
Two of the loudest cheers were for two fine saves made by 20-year-old Tahiti goalkeeper Mikael Roche midway through the second half with his side already 7-0 down.
The first goal arrived after only five minutes when Torres scored in the huge gap which Roche left between himself and the near post.
Tahiti, who lost 6-1 to Nigeria first up and next face Uruguay on Sunday, kept Spain at bay for the next 26 minutes and weaved some neat passing moves together with Teheivarii Ludivon providing some of the best distribution for his side.
But they were unable to make any real impact on the Spanish defence apart from a fine angled shot from Ricky Aitamai just before halftime.
By then Spain were already well in control and leading 4-0 with Silva, Torres and Villa all finding the target in an eight-minute spell.
But despite Spain’s obvious superiority against the Oceania champions, who are ranked 138th in the world, the amateurs from the South Pacific never stopped trying to play football to the delight of the 71,000-plus crowd.
Spain midfielder Santi Cazorla even earned himself a booking for a clumsy challenge in the first half, which ended with the crowd cheering Tahiti off.
Spain flexed their muscles after the break with Villa adding two more and Torres one in the first 15 minutes of the second half before Mata made it eight when he got a lucky deflection after a one-two with David Silva.
Torres then missed a penalty after 78 minutes, prompting a huge cheer from the crowd, but got his fourth goal and Spain’s ninth a minute later when he rounded Roche to score.
Silva made it double figures in the 89th minute after another move that slit open the Tahiti defence.
Spain coach Vicente Del Bosque, whose side beat Uruguay in their opener and next play Nigeria on Sunday, said: “We played a good game, we took it seriously and our superiority was evident.
“I don’t think the stadium were against Spain. I think it was more to do with things beyond the stadium. We have seen in the previous game, and in the street, everyone has shown us great affection.”
Protests about the cost of living and the cost of the World Cup have rocked Brazil in recent days.
In the day’s late match Diego Forlan celebrated his 100th cap with a goal at the start of the second half to secure Uruguay a 2-1 win over Nigeria and all but guarantee their place in next week’s semi-finals.
The result continued Uruguay’s undefeated record against African opponents in 12 encounters and left them hot favourites to join Spain in the last four.

IN THE first five months of 2013 the Mediterranean Institute of Gender Studies (MIGS) has responded to 685 calls concerning male violence against women and girls, including sexual violence and rape, it said yesterday.

MIGS said the calls included one relating to the rape of a minor by a 48-year-old man in Yermasoyia in the Limassol district, and another the rape of a 26-year-old woman by a 42-year-old priest.

Other cases involve a Palestinian man who stabbed and beat his wife from the Ukraine, and the rape of a Vietnamese housekeeper by two Romanian men.

“The majority of the calls received were from women and had to do with 225 cases of psychological violence, 395 cases of psychological and physical violence, 71 cases of psychotically, physical and sexual violence and 16 cases of neglect,” MIGS said.

“It seems that there is a general upward trend of violence in general and especially that of sexual violence against women.”

MIGS said that reported rates of violence and the percentage of convictions were still very low “showing, among other things, that sexual violence experienced by women is a private matter.”

MIGS called on the government – namely the ministry of labour and the ministry of justice – to sign the convention on the fight against all forms of violence against women in Europe.

“The convention will strengthen national legislation and contribute to the effective development of specific measures to protect and care for women and girls who are victims of sexual violence.

It would also contribute to developing systematic information and prevention programmes to promote the development of a society where violence against women is not acceptable, the MIGS statement added.

By Peter Stevenson

CYPRUS needs to enter the digital era sooner rather than later as it is believed that by 2015, some 90 per cent of jobs will require some form of computer knowledge.

It was with that in mind that in October of last year, the Cabinet appointed the commerce ministry’s permanent-secretary, Stelios Himonas as the island’s digital champion.

Speaking at a press conference yesterday to announce the government’s measures on how to increase access and knowledge of the internet, government spokesman Christos Stylianides said it was imperative Cyprus invests in digital development.

“Cyprus needs to join the digital era as soon as possible to help it become more competitive with other EU countries,” he said.

Stylianides revealed that a survey showed that just over 36 per cent of Cypriots have never used a computer which is significantly higher than the EU average of 22.4 per cent.

“Recent developments mean we need to implement measures which will kick-start the economy by learning to produce more with less,” the government spokesman said.

Stylianides said he believes it is imperative Cyprus invests in digital development and Himonas’ appointment is a move in the right direction.

“He has been tasked to create a method to improve technological advancements which will in turn begin a technological revolution,” he said.

Himonas explained that the internet and access to the internet plays a vital role in contributing to a country’s GDP.
“The internet’s contribution to GDP in developed countries comes to between 10 and 30 per cent while in developing countries it only contributes between 1 and 5 per cent,” he said.

He added that research carried out by Microsoft shows that lifetime earnings are directly affected by people’s access to the internet.

“It was calculated that without any internet knowledge, the average person’s lifetime income would come to around €935,000 while for someone who has internet knowledge their lifetime income would reach €1.4 million,” Himonas said.

He added that technological advances could create new job opportunities and that despite positions becoming obsolete with more computer advancements, it is believed that in the future for every two jobs lost, five will be created.

“It is estimated that if the government becomes fully digital then it could save up to €700,000 a year and by 2015, some 900,000 jobs will have been created as everything becomes computerised,” he said.

Himonas added that technological advancements would also help improve the quality of life of people with special needs and the elderly and it will help reduce pollution.

The government has managed to increase internet coverage on the island although it is well below the EU member states average, he said.

“In 2005, 32 per cent of the Cypriot population had access to the internet, while last year that number rose to 62 per cent but that is still significantly less than the average of 76 per cent within the EU,” he revealed.

The permanent secretary explained that the measures he was championing would include the creation of Wi-Fi hotspots in mountainous communities. The government will train local ambassadors who will be able to then train the public.

They will be shown how to access the internet and how to use government sites like the Road Transport Department’s site for paying road tax.

The programme will also increase hotspots in frequently populated areas like malls and beaches but also in archaeological and religious places where tourists visit. It will also help vulnerable groups by teaching them how to use the internet to help improve their quality of life.

There will also be competitions for students to create apps or formulate ideas, with the winners receiving funding or scholarships to universities.

Himonas revealed the government had spoken to the Future Worlds Centre about the creation of a Cyprus Wiki using the Media Wiki platform. Talks have already begun with the Cyprus Tourism Organisation to build a base for the page.

“There will be no cost to the government for all of these measures and we hope they will be complete by the end of the year,” he said. One of the main aims is to improve agro-tourism which Himonas believes can benefit greatly from the programme.

By Stefanos Evripidou

CYPRIOT FINANCIAL crime authorities are investigating the “suspect” transfer of €1m in 2007 from a Greek ship owner’s account to that of a company headed at the time by the daughter of former central bank governor Christodoulos Christodoulou.

Police spokesman Andreas Angelides yesterday confirmed that Attorney-general Petros Clerides, earlier this week, instructed the Criminal Investigation Department at police headquarters and the Unit for Combating Money Laundering (MOKAS) to launch an investigation into the matter.

“What I can confirm is that instructions were given by the Attorney-general to carry out a criminal investigation into the transfer of €1m from one account in Greece to a Cypriot company’s account,” he said.

The former central bank governor yesterday released a written statement saying there was “nothing wrong or illegal” with the transfer in question.

“I have nothing to hide,” he added.

Christodoulou said he only learnt of the ongoing investigation after reading it in yesterday’s Politis.

The local daily reported that Greek and Cypriot authorities were investigating a “suspect” transfer of €1m in July 2007 from Greek ship owner Michalis Zolotas to the company of the former governor’s daughter Athina Christodoulou, less than two months after her father left the office of central bank (CBC) governor.

Politis said the money was deposited for an unknown service provided by Athina Christodoulou’s company to the ship owner, Zolotas, who the paper claimed is a “friend and close associate” of former Laiki strongman Andreas Vgenopoulos.

According to Politis, during an investigation into money laundering by the Greek financial crime squad, the Greek authorities came across the transfer of €1m to a bank account in Athens held by the Cypriot company A.C. Christodoulou Consultants Ltd. They found the transfer suspect and requested the involvement of the Cypriot authorities.

According to the paper, the Cypriot consultancy company was set up in June 2006, and had Athina Christodoulou registered as shareholder and director.

The transfer in question was allegedly made to the company’s Athens-based bank account in July 2007.

Around two years later, the €1m plus interest was then allegedly transferred to an account in Laiki Bank.

In February 2010, reported Politis, control of the company passed on to the father.

Speaking to various media yesterday, the former governor highlighted that he was not a shareholder of the company, which belonged to his daughter the time of the transfer, adding: “Since 2010, I work there.”

He welcomed the investigation into the transfer, saying he did not believe any wrongdoing took place, noting that the company offered consultancy services to a number of clients.

Asked if he knew the two Greek men referred to in the article, he said: “I do not know Mr Zolotas personally.”

Christodoulou accused Politis of trying to tar his name, hinting at legal action against the paper.

Vgenopoulos also released a written statement saying he was not even aware of the case in question which he denied any involvement in.

He accused the paper of groundless “mudslinging”, adding that it falsely stated Zolotas was his friend and close associate.

By George Psyllides

THE OUTGOING chief of the Cooperative Central Bank (CCB) yesterday rubbished rumours that a haircut on deposits was on the cards, assuring that the cooperative movement had ample capital and liquidity.

Erotokritos Chlorakiotis sought to allay fears that deposits in cooperatives would suffer the same fate as those on the island two biggest banks.

Those fears, along with the rumours doing the rounds lately, became stronger on Thursday after he announced he was stepping down some 18 months before his contract expired.

“It is a joke, if not criminal depending on the source, for these rumours to continue,” Chlorakiotis told a news conference.

He said some of the cases had been reported to police but did not elaborate further.

On Monday, the Central Bank of Cyprus announced that cooperatives could need up to €1.5 billion to cover their shortfalls until 2015.

The cash will come from the island’s €10 billion bailout.

“Are we going to recapitalise the cooperatives twice?” the 66-year-old Chlorakiotis said.

The outgoing cooperative official said their capital adequacy and liquidity was sufficient.

“Do they impose a write-down when you have a capital adequacy level of 12 per cent or 26 per cent? We have no losses; we did not make investments that accumulated losses, which could not be covered,” he said of the big exposure to Greek debt of the island’s two biggest banks – the now defunct Laiki and Bank of Cyprus.

Chlorakiotis added that the CCB had €1.0 billion deposited with the ECB to ensure that depositors get their money whenever they need it.

“We have the liquidity and we have the capital adequacy so why would they impose a haircut on our deposits?”

He also rejected other suggestions that he was stepping down because of his disagreement with rolling over state debt.

Chlorakiotis said the government has already paid off €656 million worth of bonds held by cooperatives.

Co-ops hold an additional €950 million of state debt, most of which matures next month.

And he rejected suggestions that his early retirement was linked to his family having millions in loans.

“I personally feel there is nothing wrong regarding loans possibly taken out by my family,” he said, adding that there had not been any preferential treatment.

Chlorakiotis stressed that he was “retiring” not “resigning” on September 30, to pave the way for a new general manager who will guide the movement through the new state of affairs created by the terms of the island’s bailout.

“I feel that I am not abandoning anything; I have completed my work,” he said.

Managing the situation would take many years, he said, and “if I were 55 I would not leave because I would have enough years. I am 66 however, and I think I am doing the right and prudent thing to open the way for a new general manager.”

By Stefanos Evripidou

THE CYPRIOT authorities are ready to cooperate with the troika to see how to tackle some of the “difficulties” that have arisen during implementation of the terms of the Cyprus bailout, without wishing to change those terms, clarified Finance Minister Harris Georgiades yesterday.

Speaking after a Eurogroup meeting in Luxembourg, Georgiades told state broadcaster CyBC that he reiterated to his eurozone counterparts Cyprus’ commitment to implementing the memorandum of understanding with the troika in full, noting that Cyprus will be subject to its first progress report by the troika.

At the same time, he highlighted to eurozone finance ministers that some issues were causing problems in completing the MoU programme, like the capital controls imposed and delays in restructuring the island’s biggest lender, the Bank of Cyprus (BoC).

Ahead of Thursday’s Eurogroup meeting, a number of foreign press reported that Cyprus wanted to change the terms of its bailout agreement, inviting the ire of several unnamed EU officials.

The reports were based on a letter sent by President Nicos Anastasiades to the heads of the troika (IMF, European Central Bank and European Commission) effectively calling for help to deal with the liquidity strain on the BoC.

He argued that the badly-planned ‘bail-in’ of BoC and the now defunct Laiki ended up dumping €9 billion worth of Laiki’s emergency liquidity assistance (ELA) on to the BoC, in turn, creating a serious liquidity problem for the systemic bank.

If the BoC loses access to cash, this will have grave consequences, not only on the banking system, but on the economy and the successful implementation of the MoU, argued Anastasiades.

Instead of maintaining capital controls and further undermining confidence in the Cypriot banking system, the troika needs to help Cyprus come up with ways to secure the BoC’s viability, preferably by getting the practical backing of the ECB.

Georgiades yesterday argued that press reports claiming Cyprus was seeking changes to the MoU, barely after having signed on the dotted line, created the wrong image and undermined Cyprus’ efforts.

“There is no such issue. Cyprus is not seeking renegotiation of the MoU, but there are some issues that are causing problems in its implementation, and tackling them requires the cooperation of the troika. That is what I asked for at the Eurogroup and that is what we agreed,” he said.

The minister said the Cypriot authorities, including the central bank, will cooperate with the troika to examine ways of tackling the difficulties raised.

Speaking after the Eurogroup meeting, its President, Dutch Finance Minister Jeroen Dijsselbloem said: “We are unanimous that a determined implementation of the (bailout) programme is indispensable. We agreed that the BoC needs to be brought out of resolution as quickly as possible and the best way to achieve this is through the implementation of the financial strategy on the restructuring of the financial sector that was agreed between Cyprus and the programme in the MoU.”

He added: “Swift and determined progress on the part of the Cypriot authorities with the implementation of the financial sector strategy as agreed in the MoU is key to bringing the bank of Cyprus out of resolution and eventually lifting capital controls at a pace that is optimal for the economy.”

According to sources, at the Luxembourg meeting, the Cypriot finance minister confirmed his government’s commitment to fully implementing the MoU but at the same time raised the issue of certain side-effects and practical problems emanating from the process.

The source said these problems were registered by the eurozone partners and will be further discussed to find solutions.

The purpose of Anastasiades’ letter was to raise the alarm at an EU level and that was achieved. The matter has been put on the agenda and is already being dealt with, added the source.

Whether the solutions eventually proffered will achieve the intended result remains to be seen.

At the same time, Cyprus’ EU partners reiterated that the resolution process of the BoC must be completed as soon as possible; a message the government has oft repeated to the responsible authority, the Central Bank of Cyprus.

In all the discussions in the press on the “Cyprus financial crisis” very little attention has been paid to the private sector debt problem.

Cyprus has very high private indebtedness (household and non-financial company debt), in 2010 of €51.4 billion rising to €56.6 billion in 2011 (source Eurostat May 2013). As a share of GDP, in 2010 only second to Ireland at 275%, in 2011 Cyprus moved to first place with 283% of GDP. The highest in both the euro area and the 27-strong EU; this makes the Cyprus private sector very exposed, as the economy contracts and unemployment rises, severely reducing the ability of households and companies to both service and repay their debts.

What is very worrying; these numbers are greater than the forecasts (IMF and Eurogroup), of Government debt to GDP for the country as a whole and a lot larger than the bailout needs.

The private business sector has been in decline for a number of years, due in part to the oversupply of goods and services to a limited market. The shortfall in cash flow being largely made up; by obtaining easy credit from banks or taking extended credit from suppliers. The slowdown and tightening of credit had the effect of businesses and individuals not paying their debts in a timely manner (won’t pay) resulting in their creditors in turn being unable to pay their own creditors (can’t pay). The consequence is a gradual hardening of the financial arteries of the economy, reducing liquidity in the private sector and indeed the country.

The bail in and the terms of the Troika memorandum of understanding, has brought this slow motion car crash to an abrupt and untidy end, to continue with the medical metaphor “a financial heart attack”, with the banks unable or unwilling to lend and capital controls imposed.

What now? It is widely recognized that the state and households have become accustomed to living beyond their means, the only solution; is to plan for the worst and hope for the best, there is no easy alternative. The debt has to be reduced to manageable levels, both private and government; it would be refreshing for the authorities to acknowledge, as Winston Churchill did in 1940 “I have nothing to offer but blood, toil, tears and sweat”, warning the British people of the hardships to come in WWII. The situation now is not a war, but it will be a battle to reduce debt; it can be done and it will be painful, but Cyprus has to learn to live well within its means.

There’s no doubt there will be difficult times ahead for both individuals and businesses but the resourceful and the best will survive the recession and be well placed when the economy finally improves. What a recession does; is make businesses take stock of their activities and challenge established systems and methods. This will help businesses go back to fundamental principles and emerge from the crisis as up to date, well managed efficient companies. For individuals, recessions, unpleasant as they are, often offer life changing opportunities that they may not have considered in the past.

This recession will end and those people and businesses that take effective measures to counter the problems facing them will survive and prosper, doing nothing is not an option.

Paul Rowland is a founder member of a European consultancy for asset protection and debt management, and former senior executive in international banking in the Channel Islands.

By Yiorghos Leventis

THE CURRENT financial crisis vexing Cyprus makes the history -and sharp-eyed observer ponder over the recent course of the small Mediterranean state’s financial and political troubles, more often than not the two being inextricably intertwined. To put it in plain words, the birth of the Republic of Cyprus was imperfect by design, hence the new state was mutilated, incapacitated by birth.

It has been described as the stillborn Republic. Burdened by a cumbersome constitution designed to serve the interests of the principal minority – the Turkish – and the neo-colonial overlord rather than the interests of the Greek overwhelming majority, the young state already in 1963-64 was deprived of its means of subsistence.

The Turkish Cypriot delegates holding an inexplicable to any well-meaning constitutional analyst, separate majorities prerogative, bent on promoting segregation, refused to pass bills of financial nature. Consequently, the state machinery was paralyzed as the stillborn state was intentionally deprived of the legal apparatus to collect taxes, so vital for the coverage of costs involved in its basic smooth functioning. All the more so that the young RoC had to finance the creation of new institutions.

Strategically located, the island has been suffering under an all but name neo-colonial regime. The Treaty of its Establishment constitutes a remarkable drawback in the annals of constitutional history, unique in its tortuous provisions for the ill-conceived protection of the principal minority and the equally suspicious provisions for the extended privileges of the British Armed Forces that were to remain in eternity (?) and continue to use unobstructed the land, sea and airspace of the crippled-by-birth statelet. In Appendix P (Future of Sovereign Base Areas) of the said Treaty, the British Representative makes it abundantly clear in an Exchange of Notes to Archbishop Makarios and Dr. Kutchuk that the UK do not intend to relinquish their sovereignty or effective control over the SBAs and that therefore the question of their cession does not arise.

Furthermore, the shameful Treaty of Establishment of the Republic of Cyprus abounds in provisions that tie down the future governments of the RoC to servility to the British neo-colonial overlords. Apart from the two SBAs the UK enjoys use of a host of other installations scattered around the territory of the island designated in the ToE as ‘retained sites’. But should it be so after the RoC’s full accession to the UN and, more recently, to the EU?

Whichever side of the above argument one takes, there has always been, a huge moral and an enormous financial dimension to the use of military, surveillance and espionage facilities by the UK in Cyprus.

The UK government recognized this moral and financial debt in Appendix R of the ToE. In the Exchange of Notes between the British representative and Archbishop Makarios and Dr. Kutchuk the former committed his government ‘to pay to the RoC, by way of grant, the sum of 12 million pounds sterling during the five years ending on the 31st March, 1965′.

A year earlier the UK terminated its financial assistance payments leaving them in abeyance for half a century by now.

London has been arguing ever since that the RoC’s constitutional order collapsed in December 1963, their Turkish Cypriot protégés withdrew from the Cypriot government hence there is no bi-communal administration to administer the agreed financial assistance, the level of which, importantly, was to be reviewed in regular five year periods according to Subparagraph (c) of Appendix R, ToE, 1960. The agreed text specifies that taking all factors into account, including the financial assistance requirements of the Government of the Republic, shall, after full consultation with the Government of the Republic, determine the amount of financial aid to be provided …

Putting the examination of the UK’s share of responsibility in the tragic dismemberment of Cyprus aside; for the sake of focusing on our argument: it is high time that the UK government fulfilled its huge moral responsibility undertaken in 1960 to come to the financial aid of the RoC, all factors taken into account.

In the fifty plus years that lapsed since the conclusion of the ToE which legally endorsed the retention of British military bases, the Cypriot governments never challenged the existence of the SBAs, despite their unpopularity among the Cypriot public and in spite of their half-a-century use endangering the good relations that the lilliputian and crippled RoC enjoyed with friendly neighbouring and other nations.

The Cypriots respectfully have done their part of this uneven, if not shameful, deal, despite the change of times: nowhere in the world does a nation retain bases without the payment of rent and the agreed periodic review and hence re-negotiation of the terms of their use – with the exception of Guantanamo but then again there is no agreement between the Cuban and the US governments. Quite the opposite in the case of the British Cyprus bases where the agreement to retain them, i.e. the Treaty of Establishment forms at the same time the birth certificate of the RoC. But is it a Treaty establishing a sovereign state or a treaty establishing a sovereign base in the end?

Dr Yiorghos Leventis is Director of the Nicosia-based independent think tank International Security Forum www.inter-security-forum.org

ALTHOUGH the government announced that it would allocate funds for investment in renewable energy sources (RES), as a way of helping the economy’s recovery, the relevant budget bill is still gathering dust in the legislature. Last Tuesday the Environment Commissioner Ioanna Panayiotou issued an announcement extolling the benefits of this scheme, after discussing the issue at the House Commerce Committee.

She cited the impressive results of the net-metering pilot scheme by which the electricity produced by photovoltaics (PV) and channelled into the grid was credited to the house’s electricity bill. The balance the householder had to pay the EAC was impressively low. A PV system may cost several thousand euro, but the saving on the electricity bill, assuming net-metering goes ahead, would ensure the investment was paid for in a few years.

The government decided that net-metering would be a good way of reducing the electricity bills for low income households and as part of its RES scheme would be subsidising 50 per cent of the PV installation cost. While this is a very a good idea there is one practical problem that the government does not appear to have addressed. Where would a low income household find the funds (in the region of two to three thousand euro) to pay the remaining 50 per cent of the installation cost?

These are hard times and low income households would be happy to have enough money to put food on the table. They are unlikely to have the spare cash to invest in a PV system nor would they be able to borrow the money from a bank or a co-op. In the very unlikely event that they were able to borrow the money, any saving on the electricity bill would go towards paying off the loan, so how would a poor household benefit from the government scheme?

The government needs to re-think the whole scheme, assuming it is serious about implementing it, if the objective was to help what were described as ‘vulnerable groups of society’. The fear, however, is that the relevant bill on net metering might remain in the legislature’s drawers for some time, because the EAC’s union would not support a scheme that would reduce the Authority’s revenue and threaten jobs. Its chairman has already reported that electricity consumption had fallen by about 20 per cent this year, putting additional financial strain on the Authority.

Net-metering would further reduce EAC revenue as households and businesses would be taking a share of it. Would union and political parties allow such a thing to happen?

MILK, cheese and eggs in Cyprus are the most expensive in the EU, according to the latest Eurostat report clocking in at 141 per cent of the EU average of 100 per cent.

According to the report, released yesterday, the price of bread and cereals in Cyprus is 121 per cent of the EU average and alcohol 110 per cent of the average. Meat and tobacco prices on the island came in at 89 per cent and 82 per cent respectively of the average in the bloc.

The report said that in 2012, the price level of a comparable basket of food and non-alcoholic beverages was more than twice as high in the most expensive EU27 Member State than in the cheapest one.

Denmark had the highest price level for food and non-alcoholic beverages in the EU27 in 2012, at 143 per cent of the EU27 average, followed by Sweden (124 per cent), Austria (120 per cent), Finland (119 per cent), Ireland (118 per cent) and Luxembourg (116 per cent). The lowest price levels were observed in Poland (61 per cent), Romania (67 per cent), Bulgaria (68 per cent) and Lithuania (77 per cent). Cyprus’ total was 109 per cent of the average.

For bread and cereals, price levels ranged from 57 per cent of the EU27 average in Bulgaria to 159 per cent in Denmark; for meat from 55 per cent in Poland to 132 per cent in both Denmark and Austria.

For milk, cheese & eggs prices ranged from 63 per cent of the EU average in Poland to 141 per cent in Cyprus – the most expensive.

The price levels for alcoholic beverages ranged from one to more than two and a half. The lowest price levels for alcoholic beverages were registered in Bulgaria (67 per cent of the EU27 average), Romania (75 per cent), Hungary (79 per cent) and Germany (82 per cent), and the highest in Finland (175 per cent), Ireland (162 per cent), Sweden (161 per cent) and the United Kingdom (143 per cent).

For tobacco, the price levels were almost four times higher in the most expensive Member State than in the cheapest. The lowest price levels were observed in Hungary (52 per cent of the EU27 average), Lithuania (55 per cent), Bulgaria (57 per cent) and Poland (58 per cent), and the highest in Ireland (199 per cent), the United Kingdom (194 per cent), Sweden (132 per cent) and France (129 per cent).

Cypriot expat organisations and private individuals in the USA donated $460,000 to the Relief Fund for Cyprus, which was set up to provide support to crisis-stricken people on the island.

 Archbishop Demetrios of America said the money will be distributed through the Church of Cyprus, to children day care centres, an organisation that helps people with autism, and a rehabilitation centre for children with special needs.

“We are in the midst of an enduring crisis” the Archbishop said, adding that efforts to raise assistance must continue.

Former Cyprus Federation of America President Panicos Papanicolaou said $50,000 will be made available, probably by next week, to provide free meals to poor pupils.

Cyprus’ ambassador to the US expressed his deep gratitude on behalf of the government.

“It is not just the financial assistance, but also the psychological support, because Cypriots see that there are many people who care and support our struggle” Giorgos Shiakkalis said.

By Loucas Charalambous

THE BIZARRE story of Greece’s public broadcaster ERT gave the opportunity to the spoilt employees of CyBC to show their true character. They stopped everything they were doing in order to give their support to the ‘struggle’ of their colleagues.
They even adopted the full range of nonsensical slogans being used in Greece. We heard that democracy was supposedly under threat, that ERT was the ‘voice of Hellenism’ (even if it was watched by only 2.5 per cent of Greeks) and other such nonsense. Patriotism remains the last refuge of every scoundrel and of course the scoundrels of the CyBC could not be the exception.
Interestingly, the ERT hysteria coincided with the publication of a report by the auditor-general who once again exposed the shenanigans taking place at CyBC.
A friend, who previously worked at the embassy of a European country, recently told me a story which gave a good illustration of how the CyBC operated. He had called an employee at the CyBC to inform her that he had prepared a video that had been requested by the corporation.
The response of the CyBC employee was: ‘Let me see if I have a car available; fortunately there is one… Let me see if there is a driver; yes, I have a driver. Let me check if there is a worker. Oh… unfortunately Mr, I have no worker to send.’
The astonished man asked: ‘As you have a car and a driver, why do you need a worker? I will give the video to the driver.’
She explained that this was not how things worked at CyBC: ‘But Mr, it is not the job of the driver to bring the video – that is the job of the worker. Hold on to it and when I find a worker I will send him to you.’
This is the absurdity that prevails at the CyBC and these are the scoundrels who are now peddling us patriotism and civilisation.
Let us also take a look at the corporation’s operating costs which are insane. Consider that ERT costs every household in Greec €50 per year. You will not believe what the CyBC costs the Cypriot household. I had the patience to make a calculation based on the figures for seven years, from 2005 to 2011. In these seven years, the total subsidies taken by the CyBC from the state amounted to €211,582,619.
In the case of ERT the €50 per household is the final cost and the monthly instalment is included in a house’s electricity bill. In our case, the average annual cost of €30.2 million is paid through loans. In other words, interest has to be paid on the amount as it is part of the public debt.
Let us assume that everything will go according to plan with regard to the MoU and the loan from the troika will be paid off by 2053. Assume also that the public debt of €16bn will also be paid off by then.
This means that by then the state subsidy to the CyBC, of just these seven years, would have cost us, with interest €697,129,512. This comes to €569 per year for every household.
But the lunacy does not end here. At the end of 2011, the corporation had an accumulated deficit of €68.7m while the deficit in the staff pension fund stood at €93.6m. These would also be paid for by the state. If we add these amounts to those of the seven years, the total by 2053 would be an astronomical €1.2bn.
In other words, the real, final cost for financing of the CyBC for seven years, plus its deficits up to 2011 would be bigger that the budget deficit of Cyprus in 2012. The cost per household comes to €6,907, which is the annual salary or annual pension for tens of thousands of people. And this would be the case if we paid off the loan by 2053.
These few numbers perfectly illustrate the reasons why we bankrupted the state. With the political demagogues, who created the all-devouring monsters like the CyBC and other SGOs, still deciding our fate, the only solution for a prudent Cypriot would be to follow the example being set by many young people – emigrate.

By Costas Apostolides

One of the victims of the economic crisis has been the UN sponsored talks for a Cyprus settlement, which have now been put back until October. President Anastasiades has his hands full dealing with the economic crisis, while on the Turkish Cypriot side the political scene is in turmoil and will not clarify until parliamentary elections at the end of July. Add to that the demonstrations and the fall from grace of the Erdogan government in Turkey, and the omens do not look good.
Given the economic crisis a Cyprus settlement would get Cyprus (as a whole) out of the economic crisis, benefitting both communities, but for most Cypriots that prospect is too far away and many have written it off completely. Given this situation the Greek Cypriot side has proposed that in parallel to the Cyprus talks a proposal for major confidence building measures (CBMs) be resuscitated and seriously examined as a way of giving the negotiations a new momentum. This would encourage the two communities to use the opportunities provided by the CBMs to exploit the growth potential for both economies.
Ever since 1974 the proposal for confidence building measures involving the resettlement and reconstruction of Famagusta by its Greek Cypriot owners has been considered, in part because the uninhabited closed area of Varosha and the agreement that it should have priority, made it an obvious starting point. Today, given the crisis, such a major development as the reconstruction of Varosha would have massive positive effects on the economy.
The most serious effort to agree on a package of major confidence building measures was undertaken by the UN in 1993. It involved the resettlement of Varosha and the opening of Nicosia airport for both communities with aces from either side. A UN team of experts visited Cyprus to examine the economic impact of the measures proposed. Their report suggested:
•    The UN would assume responsibility for the area, and enlist the support of both sides.
•    The area would be opened in two stages, first the area to the south, and then the area further north in adjacent to the Famagusta port would be resettled.
•    The area would have a special character for intercommunal contact.
•    Both communities would be able to enter the area without formalities, and it would be a link between the two communities.
•    There would be unhindered travel of foreign visitors through a reconstructed Nicosia airport.
•    The laws to be applied in the area would be the laws in force in the Republic of Cyprus in 1963 before the intercommunal fighting of 1963/64.
The UN proposals were accepted by President George Vassilliou at the time but rejected by Rauf Denktash.
A different confidence building package emerged after Cyprus’ accession to the European Union in 2004, when owing to the Greek Cypriot rejection of the Annan Plan the government of Cyprus came under pressure from the European Union and was isolated internationally. The specific problem was the draft Direct Trade Regulation of the European Commission prepared for the Turkish Cypriot Community in 2004. This was blocked by the Cyprus government and it was therefore necessary for a counter proposal to be made. President Tassos Papadopoulos proposed the following:
•    Resettlement of the closed area of Varosha by the Greek Cypriot owners with an appropriate direct trade regulation offered to the Turkish Cypriots, with Famagusta port under EU administration and investments for the port to be modernised and developed.
•    The TCC considered that there was an imbalance of benefits owing to the great value of Varosha and its beach. They requested that direct flights be allowed into Tymbou/Ercan airport to provide more benefits to the Turkish Cypriots.
The Greek Cypriot side did not accept the inclusion of the airport, and negotiations continued to find a solution that did not imply recognition of the Turkish Cypriot regime.
Drawing upon the past experience it would seem that the components of an agreement could be found with the following provisions.
1.    The European Commission should change its proposal for the Direct Trade Regulation for the Turkish Cypriots, so that it complies with the views of the Greek Cypriot community, and the legal opinion of both the European Council and the European Parliament.
2.    In general whatever arrangements are made there must be no recognition of the Turkish Cypriot regime, otherwise no progress can be made.
3.    Famagusta port can be opened under EU or UN administration, empowered by the Republic of Cyprus, with special arrangements to ensure Turkish Cypriot involvement in management.
4.     Direct flights could be arranged to Tymbou/Ercan as long as no recognition of the regime is implied.
5.    The main problem would be the Flight Information Region (FIR) for Tymbou/Ercan flights, which could be settled under similar arrangements as the port and airport. It is expected that the government of Turkey and the military would not agree but this needs to be examined.
It is not clear that even with such a package the Turkish Cypriots would have matching gains, but certainly their gains would still be substantial as they would contribute considerably to the reconstruction of Varosha. There are insufficient Greek Cypriot resources in the region to use contractors only from the south, likewise with labour. Furthermore, much of the infrastructure (notably the utilities such as electricity, sewerage and water, and possibly gas) would require cooperation from both sides.
The cost of reconstructing Varosha was put at 1,270 million Cyprus pounds in 2004. In today’s prices the cost could be about €4,000 million.
A lot of work is required to get a clearer picture of requirements, and the above figure does not include expenditure for Famagusta Port, and infrastructure improvements and the reconnection of utilities that will be required for both communities.
It is important that an economic study be carried out. A team of Greek and Turkish Cypriot economists submitted a proposal for an economic study in 2005, but that was rejected by the Cyprus government at the time.
A lot of serious work by both communities (working together) needs to be done if we are to make progress on the confidence building measures, transform the political climate and move on to a Cyprus settlement.
Costas Apostolides is chairman of EMS Economic Management (costas.a@highwaycommunications.com) and a member of Conciliation: Peace Economics Network

By Hermes Solomon

DON’T ASK me what you can do for your country; just tell me what the hell you’ve done to your country!
Between 2004 and 2011, over fifty members of various boards of Laiki Bank borrowed up to 1.8 billion euros from the bank’s coffers. It is claimed that the majority of these loans were for short term real estate ventures which turned sour in a non-performing market, but on closer examination, most of the loans seem to have evaporated into pockets of thin air.
In 2011 alone, credit facilities of more than a billion euros were granted to board members by the two largest banks, exceeding the limits set by the law, which prohibit banks from lending more than 20 per cent of their funds to board directors.
Central Bank ‘confidential data’ gives details of credit facilities granted by the two major banks to directors and related parties to ‘off-set’ capital losses suffered after the haircut on Greek bonds; data does not indicate what collateral banks took in lieu of securing these facilities.
Unlike the Bank of Cyprus, Laiki exceeded the limit of loans that may be granted to related parties sans collateral; the threshold of 2 per cent of bank equity reaching 8.66 per cent. Following the resignations of directors in 2011 and 2012, total loans declined significantly.
The names of ‘beneficiaries’ are available on http://cyprusdebt.com/what-you-didnt-know-about-laiki-bank/ most of whom are already multi-millionaires in their own right yet prefer to form limited companies on borrowed money that they, as directors, bankrupt at no personal cost to themselves.
The total amount of loans made to Laiki/BoC board members during the past eight years exceeds 4.5 billion euros, which would more than have sufficed to save the BoC from bankruptcy!
You must be asking yourself why board directors needed such huge loans. Was there any due diligence carried out prior to approving these loans? Why didn’t borrowers pay off these debts? Why were the directors allowed to borrow from their own banks in denial of ‘conflict of interests’ laws? And just why did the Central Bank, under the helm of Athanasios Orphanides, remain silent/complicit throughout?
Board directors milking the Laiki/BoC cash cows with impunity has driven savers, who lost millions through haircuts, to seek recourse to justice – now seen as a sick joke in Cyprus. And should savers ‘eventually’ win district court actions brought against banks, where is the money coming from to reimburse them?
Why should you or I be expected to cough up for the ‘pet Ponzi schemes’ of a select few, whether former board members, directors or Vatopedi Monastery monks?
But I am Batman and these Jokers must be made to answer for bringing our two major banks into criminal disrepute, causing countrywide financial chaos, the eventual closure of innumerable branches and the loss of thousands of bank employee jobs.
It is high time these Jokers were properly investigated, stripped of their assets and sent to jail. All fifty plus must confess to ruining and robbing the country blind! Their ill-deeds brought about capital controls which turned Cyprus into a ‘concentration camp’ of the destitute policed by Brussels! They laughed their way out of the banks, forcing compatriots to close down their businesses, lose jobs and default on loans.
It is time for action! I’m sick of watching them get away with grand larceny Scot free. ‘Shoot the bastards’ has become the phrase in common usage.
Calme-toi mon vieux, pour l’amour du ciel! Just tell us what went wrong.
The cause for the decline and fall of the Cyprus economy are plain to see in Dr Alan Waring’s recently published book, Corporate Risk Management and Governance: Necessary Virtues.
At a talk next week the good Dr Waring will address corporate risk management and governance requirements affecting large organisations in all industry sectors and countries, wherein he strongly advocates implementation of Corporate Governance Codes and Standards.
He challenges many hallowed beliefs, attitudes and practices that continue to hamper the delivery of effective Enterprise Risk Management (ERM) and thereby good governance. He will demonstrate how boardroom and corporate cultures that are complacent about risk exposures and management encourage ‘chancers’ and a ‘what can we get away with’ attitude. He defines what is required to embed a culture of responsible risk-taking.
Separate cases from around the world (including a number in Cyprus – our banks, Cyprus Airways, etc) provide graphic examples and lessons to be learned. His book is designed to encourage better informed risk-decision making; a comprehensive view of enterprise risk exposures, control and mitigation issues, and an awareness of boardroom and corporate culture issues and their impact on effective ERM.
Waring has 35 years’ experience in risk management consultancy. Typically working with board risk committees, individual directors and senior executives in Europe, the Middle East and Asia, his briefs have included governance-related corporate risk reviews for large organisations as well as a wide range of strategic and operational risk issues. He has contributed to the Risk Watch column in the Cyprus Financial Mirror since 2004, when the Cyprus economy first began to blatantly overspend more than it earned.
His previous books include Managing Risk (1998), co-authored with Prof Ian Glendon, and Practical Systems Thinking (1996). He is a Fellow of the Institute of Risk Management.
The event is sponsored by the Bank of Cyprus (seeking redemption) Misco Cyprus, EKO (Hellenic Petroleum Cyprus Ltd), and me and Robin of course. But we won’t be wearing our familiar ‘commedia dell’arte’ costumes on the night lest Jokers present panic then disappear.
Entrance is free. Be there!

Dr Alan Waring is speaking on June 27 at 7.00 pm at the auditorium of the Bank of Cyprus HQ, Ayia Pareskevi, Nicosia

By Gwynne Dyer

FOOL ME once, shame on you. (The Taliban regime in Afghanistan helped al-Qaeda to plan 9/11. We must invade.)
Fool me twice, shame on me. (Saddam Hussein is building weapons of mass destruction in Iraq. We must invade.)
But fool me three times… (The Syrian regime is using poison gas against the rebels. We must help them with arms supplies.) There’s nothing left to say, is there?
President Barack Obama’s administration announced last Thursday (13 June) that it will now arm Syrian rebels, since it has proof that President Bashar al-Assad’s regime has been using chemical weapons against them. He clearly doesn’t want to do this, but he has been trapped by his own words.
“The president … has made it clear that the use of chemical weapons or transfer of chemical weapons to terrorist groups is a red line,” said deputy national security adviser Ben Rhodes, expanding on Obama’s statement. “He has said that the use of chemical weapons would change his calculus, and it has.”
But in a further statement on Tuesday, Obama fretted that it is “very easy to slip-slide your way into deeper and deeper commitments,” ending up with full-scale US involvement in the Syrian civil war.
“If (the arms aid to the rebels) is not working immediately,” the president pointed out, “then what ends up happening is six months from now people say, ‘Well, you gave the heavy artillery; now what we really need is X, and now what we really need is Y.’ Because until Assad is defeated, in this view, it’s never going to be enough, right?”
Quite right. So how did this very reluctant warrior wind up at risk of being dragged into yet another Middle Eastern war? By making a threat that he never thought he would have to act on.
Last August, faced with constant allegations that the Assad regime was using poison gas, Obama announced that such an event would cross a red line and trigger US intervention in the war. He was just trying to fend off demands at home for instant intervention, and made his promise in the confident belief that the Syrian regime would never be so stupid as to do such a thing.
Poison gas is not really a “weapon of mass destruction,” although it is technically classified as one. It is a purely tactical weapon, vastly less indiscriminate in its effects than nuclear or biological weapons. It is not even very effective in conventional warfare. It was widely used by both sides in the First World War, but was responsible for only one percent of the military deaths in that conflict.
Chemical weapons were banned after the First World War, partly because they were horrible but also because they made battle even more unpleasant without producing decisive military results. And despite occasional subsequent uses – by Egypt in the Yemen in the 1960s, by Iraq against Iran in the 1980s – the ban has mostly held ever since.
It would clearly help the rebel cause in Syria if they could prove that the Assad regime was using chemical weapons. Indeed, they would make such accusations whether they were true or not.
On the other hand, it was most unlikely that the Syrian regime would actually use its chemical weapons. It has such weapons, of course, like practically every other country in the Middle East, but using them would have no decisive effect in the kind of war it is fighting against the rebels. It would simply give the rebels a better argument for demanding foreign military intervention against the regime.
So ten months ago, when he made his “red line” statement, President Obama was confident that Syria would never cross it. It would be particularly foolish for it to use poison gas to use in the manner that is now alleged: in small amounts, in four relatively unimportant places, causing a total of 100 to 150 deaths. It just doesn’t make sense, either militarily or politically.
In all likelihood Obama’s calculation remains correct today: Assad’s regime has probably NOT used chemical weapons. Yet the American intelligence services, or at least some of them, are telling him that this has indeed happened. Why would they do that?
They may have just been sucked in by the steady flow of rebel allegations that Assad’s troops are using poison gas. Even good analysts can succumb to the line of thinking that holds that if there’s enough smoke, then there must be fire. You think that can’t happen? Remember Iraq?
It can happen especially easily when the analysts or their superiors want it to be true. The rebels in Syria have been losing all their battles recently, undermining the widespread conviction in American government and media circles that the fall of the Assad regime is just a matter of time. So the desire grows in those circles to reverse that trend by helping the rebels directly.
Even if Obama disbelieves the intelligence he is being fed, he cannot reject it openly, and he is shackled politically by his ill-advised “red line” commitment of ten months ago. All he can do now is talk a tough line, while dragging his feet as much as possible on actual action.

Gwynne Dyer is an independent journalist whose articles are published in 45 countries.

 A Letter from London by Alexia Saoulli

One thing I love about living in London is how easy it is to visit friends and family in Northern Ireland. One thing I hate is the use of budget airlines to get there.

It’s not the ‘no frills’ part of the experience that gets to me, it’s all those rules and regulations. Rules and regulations that often make the whole travelling experience more stressful. Rules and regulations which if broken result in paying through the nose to make up for it.

Not too long ago I had the pleasure of using one such budget airline. The reason was less about cost – given the ticket was not exactly cheap – and more about airport location.

Getting to Belfast International airport from London Luton was no bother. In fact the trip from start to finish was a pleasurable one. Unfortunately, the same cannot be said for the return journey, even if it did start out with such promise.

I leave the house and get to the airport in good time and pass through passport control ok. The security personnel in Northern Ireland can be a tad on the pernickety side at the best of times. Thankfully the guys at Belfast International are always so much more pleasant than the ones at Belfast City Airport and so I got through without a bother.

I even get to my gate on time. I found an empty seat and wait for boarding to commence. I knew it wouldn’t be long because I could see a man from the airline marching purposefully to the gate wearing one of those bright yellow windbreakers with reflective markings on it. I should have figured something would go wrong when I noticed how particular he was about removing his jacket and folding it away neatly. Unfortunately hindsight is 20/20.

“Speedy boarding and airline membership cardholders first please,” he cried shrilly into the microphone.

That was me. Speedy boarding. I’d paid for seat 2D. An aisle seat and near the front. Not only would I be first on and first off, but I’d also have easy access to the toilet. A facility I nearly always use on any flight thanks to a daily water consumption regimen of at least 2litres.

Paying for your seat also has another advantage. No randomised seat allocation. Can’t think of anything worse than “the middle seat”. Being confined to a small space for more than 30 minutes doesn’t appeal to me on the best of days. Add randoms to the equation and I feel the onset of a panic attack. Such close proximity to strangers just freaks me out. I don’t know why, it just does. Especially if they’re digging into cheese and onion crisps and licking their greasy fingers with gusto and then wiping them on their jeans.

As I made my way over to the man at the gate, I knew I was a goner when he looked pointedly at my wheelie and then at my handbag.

“Miss, you’re only allowed one bag on the plane.”

I started to say that on the flight out at Luton airline staff had let me on with my handbag as well as my wheelie.

“Don’t even go there,” the bald expletive said with his nasal Belfast twang. I wanted to scream.

He then suggested I put my handbag into my wheelie.

“Not possible,” I told him.

“Are you sure?”

“I’m sure.”

“Do you want to give it a try,” he said.

I wanted to say: “Fitting the contents of my handbag into my wheelie would be like trying to squeeze my size 16 derriere into size 8 jeans.”

I didn’t think he’d see the funny side of it though.

I settled for: “I do not want to give it a try. I’m sure.”

Inside I was seething. I know it’s “policy” but it seems to be “policy” whenever it suits budget airline staff. I’ve often flown with a handbag and a wheelie. So have most people I know. To make matters worse the flight was only half full.

When I later rang a cousin to moan she said that it was always this way. If they’re busy or running late they don’t notice. When they have plenty of time to look you up and down, you get caught.

Five minutes later the eager beaver came back over to me and said: “So do you want to check-in your bag?”

I said: “Can I pay you £40 and take it on board?”

The look I got in return was as if I’d asked him if he liked wearing his wife’s underwear.

“Nooooo, madame, you cannot. It’s airline policy that only ONE bag is allowed on the aircraft. So, do you want to check-it in?”

What was I supposed to say, no sunshine, leave it here? Of course I bloody wanted to check it in. The bleeding thing was costing me more than my return ticket but, hell, I had to get it home with me.

Peeved off and irritated with myself as well as the airline’s one-bag policy, and aware that I wasn’t going to get away with this in a month of Sundays, I did what any self-respecting, put-out frequent traveller does and whipped out my AMEX. If I wasn’t going to get away with it, I was going to at least ensure that they lost as much of their cut of £40 as possible.

The Rottweiler then called over his faithful sidekick who dealt with my bag. In the meantime he told everyone that the airline was operating a strict one bag policy and that they were to cram extra bags into their hand luggage, which several people quickly did. The Rottweiler made sure to give every single passenger the once over as they passed him on the way out to the plane.

Once on the aircraft the airhostess came over to my full row and told the three of us sitting there that we could move to a seat in one of the two rows behind us, as all three seats were free. The couple next to me said no thanks. I thought, too right, and proceeded to move. If I was going to pay £40 extra I was going to make sure my handbag got its very own seat, which it did.

Nestled comfortably in my seat, I prepared for takeoff; and that’s when I heard it. The sound all travellers can’t wait to hear:  the wails of a teething baby. Wonderful. London Luton here I come.

Paphos police arrested five people yesterday in connection with two separate cases of card theft.
In the first instance, police arrested three men and a woman, aged between 27 and 36, on suspicion of stealing credit cards and cash from a Polish man.
The four were rounded up while using the card at a petrol station.
Officers found the stolen card, €445 in cash as well as Polish and British paper currency in the possession of a Georgian permanent resident, 36.
He claimed that, together with a Romanian friend, they beat up and mugged an unspecified number of Polish nationals.
The car, a grey BMW that was being filled with petrol, was driven by another Georgian man who had a Russian woman with him.
He tried to flee the scene on foot but was picked up by police, along with a Romanian national who had been waiting for him.
Some items found in the suspects’ possession had been stolen from two rooms of a hotel in Paphos, police said.
All four were remanded in custody for eight days.
In a separate case, a 22-year-old permanent resident of Paphos was remanded in custody for stealing a credit card and using it 11 times for petrol.

By George Psyllides
CYPRUS cannot sustain any more asylum seekers, Interior Minister Socratis Hasikos said yesterday.
He was speaking at an event held at the EU House focused on the lives of political refugees in Cyprus.
Outside, refugees protested about the conditions they were living in and against, what they claimed to be, the policy aiming to force them to leave the island.
Reports said the group jeered Hasikos.
“I do not think they can attack the interior minister who represents the Republic, which hosts them, looks after their health, education, nutrition and accommodation in general,” Hasikos said. “They must realise that this country has its own problems, which are big and many, especially now with the economic crisis and rampant unemployment.”
The minister said asylum seekers must understand and show consideration.
“Cyprus cannot sustain any more asylum seekers and I wish we manage to handle the ones we have here,” Hasikos said, urging the EU and the UN to provide assistance.
They must first help Cyprus financially so that it would be able to handle the asylum seekers currently on the island.
The EU and the UN must also understand that Cyprus cannot take any more asylum seekers.
“Cyprus continues to be a hospitable country… it honours all international conventions and agreements on human rights, but I repeat, our problems today are serious and we at least want them to respect this,” the minister said.
A statement from migrant support group KISA said the crisis had led the majority of refugees to unemployment, poverty, racist discrimination and social exclusion.
“In their majority, they live in abject destitution and no longer have access to the necessary resources for housing and food,” KISA said.
The United Nations’ refugee agency UNHCR has asked the European Parliament and the European Commission to make mandatory for the state to consult civil society and non-governmental organisations when it comes to programmes relating to asylum seekers, refugees and migrants.
UNHCR said that with Cyprus in dire financial straits, authorities must make better use of substantial EU funding available to member states to address the needs of asylum seekers, refugees and migrants across Europe.
One way of making better use of sources of funding available to Cyprus is by consulting CSOs and NGOs, UNHCR said.
The UNHCR has previously said that Cyprus, as an EU member state facing serious financial difficulties, was now entitled to receive 95 per cent of the cost of providing appropriate reception facilities for asylum seekers from EU Refugee Funds. And in its latest Cyprus report, Amnesty International said that authorities continue locking migrants up in poor conditions without considering alternatives.

THE RESPONSE by the Eurogroup and the ECB to President Anastasiades’ letter asking for some changes to the Memorandum of Understanding was an unequivocal ‘no’. Finance ministers on their way into Thursday’s Eurogroup meeting in Luxembourg were united in the view that the MoU signed on March 25 was “the best solution for Cyprus in the circumstances” and that “there is no viable alternative than implementing the strategy outlined in the memorandum”.
These comments were preceded, a day earlier, by reports in the European press quoting spokesmen and officials of European governments insisting there was “no chance we would revise the terms of the bailout.” Like the ministers, officials felt that the priority was on “implementing the programme consistently and without further delay.” The only concession, made by one official quoted by Reuters was that “potentially” there could be adjustments in the medium term, as was the case with Greece.
This unanimous position plus very critical comments in the German press forced government spokesman Christos Stylianides to go on the defensive, insisting that no changes to the bailout deal were being sought. “What we seek is to resolve practical problems, but always within the framework of the programme,” he said, defending Anastasiades’ letter which expressed genuine concerns about the survival of the banking system. The president felt that the MoU terms imposed on the Bank of Cyprus, which was of systemic importance to the economy, made necessary the capital controls that were stifling business activity.
He certainly had a point. It is all very well for ECB executive board member Joerg Asmussen to urge Cyprus to make every effort to restore confidence in its financial system but he should also suggest how this could be done after the Eurogroup forced the BoC to merge with Laiki, sell its operations and assets in Greece for peanuts and lumbered it with Laiki’s €9b debt to the ECB, which has refused to offer support to the bank. How could confidence be restored in the financial system when the biggest bank has been made completely dysfunctional by the terms of the bailout?
Finding a formula to rid the BoC of Laiki’s debt is the only way of restoring some confidence and eventually returning to normalcy but the sending of the letter by the president was not a good idea especially as it was made public. Inevitably, it was interpreted by EU politicians, officials and commentators as an attempt by Cyprus to change the terms of the MoU, less than three months after it was signed. The Europeans felt obliged to take a hard line and insist that their only concern was the implementation of the programme. The MoU was not a game which Cyprus could change the rules of.
It has not helped that the political establishment has been openly discussing ways of avoiding implementing terms of the memorandum, parties insisting that SGOs should not be privatised. Even Anastasiades’ announcement of tax breaks for businesses to a gathering of accountants was not such a clever idea. He said this aimed at reviving the economy but in Brussels it could be seen as another sneaky attempt to get round the MoU by giving back to companies what they lost through the increase of the corporate tax. This was probably not the objective but nobody in Europe would give us the benefit of the doubt.
This was why every European finance minister and official that spoke to journalists on Thursday underlined the need for the MoU to be implemented. And our government would do well to take heed. It must avoid the feet dragging of the previous government and implement the programme with a sense of urgency and commitment. Once it has shown that it is honouring its signature, the finance minister could again raise the issue of the Bank of Cyprus with his colleagues of the Eurogroup, but behind closed doors. As we have seen, it is a mistake to discuss such matters publicly because everyone digs in his heels less he is accused of showing signs of weakness.
The government needs to learn from its mistakes and adopt a more measured approach in its dealings with the EU if it wants to achieve certain things. And it should bear in mind that the previous two Cyprus governments were not considered trustworthy by the Commission. If we are to regain our partners’ trust so we could secure their support and help, we need to play the game by their rules.