THE LARNACA criminal court yesterday sentenced 33-year-old Prodromos Hadjipanayi to 25 years for manslaughter and 15 years for the attempted murder of four people in Kofinou in March last year following a property dispute.
The two sentences will run concurrently the court said. The court’s decision was met with applause from the victims’ relatives.
Hadjipanayi had originally been charged with premeditated murder, a charge that carries mandatory life imprisonment if found guilty but the charges were changed after a plea bargain.
In total, he had pleaded guilty to nine charges but the court decided it would charge him with manslaughter and attempted murder.
Hadjipanayi was accused of killing Panayiotis Stavrou and injuring his son Giorgos Georgiou as well as three other people during a shooting rampage with a Kalashnikov assault rifle on March 23.
The father and son had been working on a Turkish-Cypriot house at the time, which appeared to have been at the centre of the dispute.
The 33-year-old defendant had been lobbying the Guardian of Turkish Cypriot Properties at the Interior Ministry to allocate the house to him but it was given to Giorgos Georgiou instead.
Hadjipanayi subsequently went to the local market where he shot and injured the owners, brothers Adamos and Panayiotis Lambrou – with whom he also had property disputes – and 37-year-old Katy Charalambous.
Trouble kicked-off inside the courtroom before the court’s decision as members of Stavrou’s family shouted obscenities at Hadjipanayi, resulting in a delay to proceedings. The courtroom was vacated until tempers mellowed and the court managed to deliver its sentencing.

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THE ATTORNEY-general’s office was yesterday handed two previously withdrawn probes drafted by the Securities and Exchange Commission (SEC) relating to Bank of Cyprus.
The SEC had recalled its findings regarding the two inquiries following a court ruling earlier this year.
That court decision came after an appeal lodged by the bank’s legal advisor, who argued that the inquiries had begun before the official publication of the appointment of one of the members of the SEC’s board, rendering void any subsequent decisions taken by the SEC.
On the advice of its lawyers the SEC withdrew the probes due to the court ruling, but then launched fresh investigations.
One of the SEC probes, initiated in July of last year, concerned the decision by Bank of Cyprus (BoC) to seek state aid of €500m, instead of €200m as it had initially announced. The second inquiry concerned the conditions under which the bank bought Greek government bonds and whether the lender had made the necessary announcements to investors.
In June of last year BoC said it needed €500m to reach its €1.56bn recapitalisation target without which it would fail European Central Bank (ECB) stress tests at the end of that month.
That announcement came 48 hours after the government had asked EU for a bailout of its own.
In December 2012 the SEC had found that BoC had acted in breach of the law regarding its request for state support to the tune of €500 million, because it had originally said it would need €200m.
Deputy attorney-general Ricos Erotokritou said yesterday that the actions of the legal advisors of either the bank or the SEC, or both, could potentially constitute a cover-up.
The potential cover-up would pertain to actions prior to the recalling of the SEC’s findings, he added.
The SEC’s initial findings should have been made public regardless, Erotocritou said.
Countering, Polis Polyviou, of the Chrysafinis and Polyviou law firm – legal advisors to the bank – denied any malfeasance.
The law firm had merely taken recourse with the courts, Polyviou said, adding that this was a right enshrined in the constitution.

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By George Psyllides

THE co-operative movement pledged to regain ownership of its banks within a reasonable time following their nationalisation, the head of the Co-operative Central Bank (CCB) said yesterday.
Erotokritos Chlorakiotis said the love of the public and the confidence shown by depositors would help co-ops repay the €1.5 billion in state aid to regain ownership.
“With proper management and practices … it will be possible for co-ops to regain their shares within a reasonable time,” he told the CCB’s 44th AGM, the last one under the current structure.
The state will fund co-operatives with €1.5 billion, effectively making it its sole owner with a 99 per cent share.
The cash is part of the island’s €10 billion international bailout.
Co-ops will have to pay the state 10 per cent annually as interest on the capital held by the government.
Economists do not expect the movement to be able to buy back its shares.
Co-ops will also undergo radical restructuring that will see the number of credit institutions cut from 93 to 18.
Around 25 per cent of the sector’s 410 branches will close.
Co-op officials have disputed the amount needed for recapitalisation, which was the result of an audit of the portfolios.
They have also played down the extent of the sector’s non-performing loans (NPLs)
Chlorakiotis said the majority of the loans were small and there was sufficient collateral to cover them.
NPLs were not were not “dead loans” he said, and a lot could return to normal servicing if restructured.
Chlorakiotis said a lot of NPLs concerned loans, which are serviced but had been charged with extra expenses such as insurance and evaluation costs, which had not been included in the initial installment.
He expressed certainty that the situation would improve given the impending mergers, the restructuring of individual co-op banks, and the reinforcement of the CCB’s role.
Cholrakiotis said they were not under any illusions regarding the difficulties of buying back the shares.
“Despite this we are optimistic and base our optimism on the restructuring measures that will be put in place and will bolster our profit potential; on better management of our loan portfolio, and the structural changes that will reinforce the co-op’s operation and tackle weaknesses of the past,” Chlorakiotis said.
The CCB reported a net profit of €52.7 million in 2012 compared with a €37.6 million loss in 2011.

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By Peter Stevenson

MEMBERS of secondary school teachers union OELMEK protested outside the education ministry yesterday against a decision preventing public school contract teachers from becoming permanent.
“We call on the education ministry to implement our proposals which will solve the current problems of understaffing, but more importantly it will boost public schools which will in turn benefit our children,” an OELMEK statement said.
Following a meeting last month, the union said it believed all contract teachers needed to be appointed permanently at public schools.
“Both the President and the Education Ministry must deliver on promises to appoint all the contract teachers, and we emphasise that we do not support making appointments for the sake of it. They should be made so public education can be upgraded,” the statement said.
The union also suggested the unfreezing of promotions as problems could be caused following a number of early retirements.
“We reaffirm our previous position that we will not accept a decision which will give current teachers more responsibilities,” the statement said.
On Wednesday a delegation from the primary school teachers union POED visited DISY headquarters and President Nicos Anastasiades in an effort to get parliament to agree to make some 300 contract-teachers, permanent.
“We received mixed messages as DISY chief Averof Neophytou told us he was against the move while we held positive talks with the President who said he would do his best to take our proposal to Parliament,” deputy head of POED Christoforos Theophanous told the Cyprus Mail.
The budget has a provision for 4,000 permanent primary, kindergarten and special education teachers. Every year 100 of those teachers retire and up until 2010, Theophanous explained, those positions would be filled by the next eligible 100 contract teachers.
“In 2011 the House Finance Committee decided that it would no longer be filling the spots vacated by retiring teachers, a move which was backed by DISY and DIKO,” he said.
“Neophytou told us that once a teacher becomes permanent then it becomes difficult to let them go so it is preferable to keep more contract teachers, who can be more easily let go, for the time being due to the uncertain financial future of the island,” Theophanous said.
Making 300 contract teachers permanent would have no additional cost to the government, the deputy head said and that is the reason he told the Mail that he hopes parliament will listen to the President’s plea.
“Unfortunately there are currently more than 800 contract teachers waiting to be made permanent even though we have accepted pay-cuts in our attempts to help the state,” he said.
Back in April, parliament approved scaled cuts (0.8 to 2.0 per cent) on the salaries of all public-sector workers, including teachers – a fiscal measure stipulated in the loan agreement between Cyprus and its international lenders.
The teachers unions say they went along with it because at the time they were promised that the savings generated from the pay cuts would be used to secure all contract employees.
Education Minister Kyriacos Kenevezos said in August that the need for teachers has lessened compared to last year because student attendance in public elementary and high schools this fall is forecast to drop by as much as 2,000.
The government said in August, public-school teachers whose contracts were not renewed for the 2013-2014 academic year were due to get jobs in the National Guard although they did not disclose any details.

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By Maria Gregoriou

THE INTERIOR, justice and agriculture ministries hope to have a bill ready for parliament to amend the noise pollution law by the end of the year.
During a meeting yesterday at the interior ministry to the problem of noise pollution from entertainment establishments, suggestions were made as to how and by what means it could be measured.
Interior Minister Socrates Hasikos, Justice Minister Ionas Nicolaou, Agriculture Minister Nicos Kouyialis and other officials were present.
By the end of October the interior ministry will have completed consultations with all concerned, Hasikos said.
“We have asked officials to bring forward proposals and recommendations about how to tackle this problem,” he said.
Discussions focused on the manner and means of measuring noise, defining areas where it is acceptable and unacceptable, monitoring and penalties.
Pancyprian restaurants and entertainment establishments’ owners association’s general secretary Phanos Leventis, who was present at the meeting said: “The government not managed to come up with a ‘noise map’ so far but now with the suggestions the ministry will collect, it can be created.”
Leventis explained said the problem was not being caused by clubs and discos because these were indoors where noise is contained. It had to do with bars and other outside entertainment establishments, he said.
“Indoor clubs have licences to run as such and so the noise created within the clubs should not penetrate outside,” he added.
He said a noise map was a graphical representation of the sound level distribution existing in a given region for a defined period.
Machines are used to calculate the level of noise from a certain area, normally within 24 hours.
“These numbers are then used to measure the allowed amount of noise for an area. It is normally a little bit higher than the noise level already existing in the region,” Leventis said.
After the meeting Nicolaou also commented by saying that amendments to the law would control noise and resolve the problems it causes to those who live near recreational centres “which continuously pollute the environment with sound.”
“By defining the level of noise allowed by each area and by checks being made by police and local authorities, we will be able to have an effective control over the situation,” Nicolaou added.
This will either be by imposing fines or, in some cases, by prosecuting law breakers he said.
Nicolaou concluded that the government’s intention was not to harass recreational centres, nor was it to further bother residents of these areas.
“The situation must be brought under control so we can all have the required quality of life,” he said.
Kouyialis said the most important thing to come out of the meeting was the fact that a timeline had been set.
“I hope that by the end of the year we will be ready to make the necessary adjustments to the law,” he said.

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THE UN Secretary-General’s special representative Alexander Downer cannot say anything in public without sparking the obligatory knee-jerk reaction by the spokesmen of the smaller parties who seem to think that attacking the Australian, whenever he speaks, enhances their patriotism credentials. He could not talk about the weather without provoking a barrage of criticism of his alleged pro-Turkish bias, combined with calls for his immediate replacement.

We heard this chorus again on Wednesday. After meeting President Anastasiades, Downer said that a Cyprus solution “would give the Cyprus economy a huge boost” as it would “lead to very significant lift in economic confidence and to substantial new investments in Cyprus.” These could hardly be described as controversial or biased views, but the parties still felt obliged to have a go at him, even though they agreed with what he said. How absurd is that?

DIKO totally agreed that a solution would give a huge boost to the economy, but said that instead of an economic analyst, Downer should become “a trustworthy and fair mediator.” Even the hard-line Nicholas Papadopoulos agreed, but the solution had to be fair, workable and viable and not the type that Downer was working on.

EUROKO was more scathing, insisting that he should be replaced if there would be any hope of productive Cyprus talks, while the ultra-nationalist Greens, unimaginatively, dismissed the Australian’s views as “unacceptable”, because they were using the economy to put pressure on the government. Funnily enough, three days earlier, Anastasiades had said more or less the same thing – a solution could help the economy’s recovery – and nobody took offence.

But Downer is an easy target for the demagogues of the parties who always hide their impotence behind big words and public grandstanding. These were the same people who last year were abusing the troika and setting red lines, creating the false impression that we would be setting the conditions for bailout. It was the same sterile defiance they always adopted for the Cyprus talks, but in the case of the bailout their political dishonesty was exposed.

In the Cyprus problem they seem to be getting away with it, by focusing on Downer’s alleged unsuitability as mediator; before him, Alavaro de Soto was also accused of being biased. And if Downer was replaced – something that will not happen – his successor would also be labelled biased.

The truth is that the anti-Downer camp does not want the type of settlement on offer – that the Turkish Cypriot side would agree to – and claims it would achieve Papadopoulos’ viable and workable solution if Downer was replaced, if the EU was more actively involved in talks, if we forged a strategic alliance with Israel and if the sun set in the east.

For Cyprus’ demagogues politics has always been the art of the unachievable and anyone who thinks otherwise is biased and his views “unacceptable”.

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By Elias Hazou

TALKS with preferred bidder Itera on interim supplies of natural gas are officially at an end, the Natural Gas Public Company DEFA said yesterday.

In a brief statement, DEFA said it had received an email from Itera earlier in the day, in which the Russians indicated they were not willing to further revise their offer as they already consider it cost-effective.

“Based on the above developments, DEFA’s board of directors proceeded with its decisions and has notified Itera that negotiations with it have been completed,” the statement said.
The DEFA board will convene early next week to discuss the “further handling of the arising issues,” it added.

It’s understood that the tender itself has not been scrapped. DEFA can now presumably initiate talks with Vitol, whose bid was ranked second-best in terms of price and proposed delivery date.

Both Itera’s and Vitol’s bids involved procuring liquefied natural gas (LNG) and re-gasifying it aboard Floating Storage and Regasification Units. The gas would be used to generate electricity at Vasilikos, the island’s main power plant.

Vladimir Makeev, vice president of the Itera Group, had flown here for last-ditch talks with DEFA yesterday afternoon, but the scheduled meeting was called off after Itera’s email.
Itera evidently saw no point in taking the meeting, sources said.

But it’s understood that Makeev got some face-time with the President on Wednesday evening, briefing Nicos Anastasiades on the situation.

Meanwhile, the Mail is told that, at the behest of the administration, a government department may be taking a closer look into the natural gas saga.

Sources said an agency – perhaps the auditor-general – could be tasked with scrutinizing the whole tender process, in particular the latter stages involving advanced talks between DEFA and Itera.

DEFA’s tender stipulated the provision of natural gas from September 2015 to late 2018, with an option for a 15-month extension.

After weeks of talks, DEFA– in conjunction with the electricity utility – decided that an updated price the Russians quoted for natural gas was still not good enough.

The Russians reportedly first offered around $16 per million BTU later agreeing to drop to $14.75 (€11). DEFA and the electricity utility determined that this will still too expensive, and wanted the Russians to go even lower.

Itera’s latest offer of $14.75 is slightly higher than the current spot market rate for natural gas ($12.5 to $13).

It’s understood that the price quoted by Itera covers fuel costs (LNG), delivery and capital investments.

Under the terms of the tender, DEFA is not obliged to pick a supplier if it deems that the price of electricity does not drop significantly through the use of natural gas.

The dispute revolves precisely around defining what a significant drop in electricity price is, with Itera and DEFA/EAC apparently disagreeing on core assumptions.

The Ant1 news network recently revealed a confidential report, compiled by the EAC and forwarded to DEFA, showing that, under Itera’s offer, between 2015 and 2021 the electricity utility would save some €800m by running its plants almost exclusively on natural gas instead of mazut and diesel.

According to the report, the cost of mazut and diesel for the six years would come to some €3.3bn. By contrast, with natural gas under Itera’s offer, the fuel cost would amount to a little less than €2.5bn.

The EAC has acknowledged the report’s authenticity, but argues that the report’s findings were founded on initial assumptions made by Itera that are no longer valid.

The electricity utility now claims that, due to the financial crisis, it anticipates a sharp drop in electricity demand in the coming years – hence less fuel needs to be purchased. The lower the volume or quantity of fuel required, the higher the price per unit, rendering Itera’s price unattractive.

According to the EAC, the utility will need 845,000 tonnes of liquid fuel for this year, compared to 1.1 million tonnes it purchased in 2012 – a decrease of around 20 per cent. In 2012 the EAC spent €645m on fuel.

Only this week the EAC said it was inviting tenders for the purchase of liquid fuels for the period December 2013 to January 2015, where it estimates it will need around 800,000 thousand tonnes of fuel – not much of a plunge compared to 2013.

Some commentators have been suggesting that liquid fuel importers are leaning on the EAC not to switch to natural gas.

Cyprus is looking to secure intermediate supplies of the cleaner natural gas to fire its power stations until its own offshore hydrocarbon reserves come on tap. Currently, the island is reliant on costly heavy fuel oil (mazut) and the even more expensive diesel.

Eurostat figures show that household electricity prices in Cyprus are the highest in the EU-27, both in terms of kilowatt-hours and in terms of living costs.

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Two armed men stormed a Limassol home on Thursday evening, beating and robbing its residents.

The men, who wore hoods and carried a shotgun and a knife, assaulted the Russian couple inside their Pissouri home at 10pm.

Both the husband, 58, and his 54-year-old wife were beaten and then tied by the assailants who ransacked the house.

The men took between €2,000 and €3,000 in cash, jewellery, three mobile phones and two electronic devices, police said.

The couple managed to free themselves after the assailants left.

Following the arrival of the police, they were taken to Limassol general hospital where they were treated for bruises.

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By Pavlos Loizou

OVER THE past few weeks I have grown more concerned about the mismatch between Cyprus’ society and economy.

Cyprus’ society comprises of four different groups. The first and second groups comprise of those from overseas who reside on the island (around 24 per cent of the population or 200,000 people).

These non-Cypriot groups are at the extremes of the employment spectrum. The first is the more affluent segment of the market comprising entrepreneurs, accounting and legal services professionals, etc while the second group is at the low-end of the employment spectrum consisting of those undertaking manual labour.

Let’s call the first group Ivan and the second group Mihai.

The third and fourth groups are Cypriots. The one is termed as ‘middle class’ and encompasses the majority of the local population employed in state organisations, financial institutions and major corporations. Let’s call this group Eleni.

The last group are locals who either undertake manual labour or who are low level employees in the service sector, mainly tourism and commerce. Let’s call this group Andreas.

Andreas tries his best, but sees that his employers almost always favour Mihai as he is a hard worker and carries out his work with gusto. Andreas has learned that the only way to move up in society and become like Eleni, is for his kids to go to university and get a job with one of the big employers.

He has warned his kids not to follow his profession and has pushed them to undertake a degree even if they did not want to. Eleni has learned that working for a large organisation is the best place to be, as she has a guaranteed income, employment safety and low number of working hours.

In turn, Eleni has groomed her kids to follow in her path and not to be risk takers.
Ivan and Mihai observe the risk adverse nature of Eleni and Andreas and are perplexed by their respective lack of ambition and willingness to undertake manual work.

Ivan utilises Eleni’s knowledge to develop his business interests in tourism, services, etc whilst Mihai continues to work hard and save money because he knows Andreas would not work for the same salary and that Andreas’ kids are not even on the market.

This segmentation of Cyprus’ society explains a number of things relating to the current state of affairs in the economy. Eleni’s salary is being reduced while her colleagues are being made redundant or are jumping ship. Andreas is out of a job because Mihai is willing to work harder and for a lower salary. Andreas’ kids are disillusioned; their father pushed them on a path which they did not necessarily want to follow and now they have reached a dead-end.

Eleni and Andreas moan because they are cornered. The bubble they have meticulously constructed has burst and the only thing they can do is complain and blame everybody else for it.

Ivan is troubled by the moaning of Eleni and Andreas, so he keeps his distance hoping that they will settle down, realise that the ‘good times’ was just a phase, and that they will now become more productive and efficient.

The problem is that neither Andreas or Eleni know what to do, or rather they don’t like what needs to be done. Andreas and his kids need to compete with Mihai, playing to their strengths which are language skills, professionalism and appreciating how local customs work.

Eleni needs to move outside her comfort zone and realise that she can’t hide behind her union anymore and that her kids need to work for smaller salaries or find employment overseas.

The immediate issue for Andreas and Eleni is that in trying to do the best for their kids, they indebted themselves by paying for their education and catering to their whims.

In doing that, their kids have learned to expect everything from their parents. They believe that money is a phone call away to the local bank and that work will come via a relative working for the government.

Whilst Andreas and Eleni remember how things were before Ivan and Mihai came to Cyprus, in order for their kids to have a chance of living well in the ‘new’ Cyprus they have to undergo a complete transformation of expectations and ethics.

Pavlos Loizou MRICS is managing partner of Leaf Research pavlos.loizou@leafresearch.com

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By Hermes Solomon

Marc Faber, the noted Swiss economist and investor, has voiced his concerns for the US economy, stating, “I think somewhere down the line we will have a massive wealth destruction. I would say that well-to-do people may lose up to 50 per cent of their total wealth.”

Faber believes that this bleak outlook stems directly from Federal Reserve Chairman, Ben Bernanke’s policy decisions of ‘quantitative easing’ – other economists calling it ‘a medicine which will become a poison’ or ‘money from heaven [which] will be the path to hell’.

Faber claims that if the Fed maintains its stimulus, standards of living will fall, and that social security and government pensions will not be paid in full, which is already the case in Cyprus.

Equally critical of the US economy is real estate mogul and entrepreneur Donald Trump, who is warning that the United States could soon become a large-scale Spain or Greece, (he’s never heard of Cyprus) teetering on the edge of financial ruin.

He points out America’s unhealthy dependence on China. “When you’re not rich, you have to go out and borrow money.” It is this massive debt that worries him.

“We are going up to $16 trillion [in debt] very soon, and it’s going to be a lot higher than that before ‘he’ gets finished,” Trump says referring to President Barack Obama. “When you have [debt] in the $21-$22 trillion [range], you are talking about a [credit] downgrade no matter how you cut it.”

Peter Schiff, the CEO of Euro Pacific Capital remarks that “the stock market collapse we experienced in 2008 wasn’t the real crash. The real crash is coming.”

With the Fed feeding 80 billion dollars monthly into the US economy, thereby disingenuously reducing unemployment, boosting the housing market and maintaining growth, it doesn’t need a renowned pundit to predict an even worse repeat of 2008.

By printing money so that banks can interminably make loans to corporations, SME’s and individuals, world economies have been kept afloat, suffering temporary set-backs in 1981 to 1985, 1990 to 1997, 2000 until 2003, and the whopper of 2008, when the entire house of cards crumbled and most are still struggling to pick up the pieces.

This last recession did not seriously affect Cyprus until late 2010, but when the slide finally began, our economy crashed like no other.
When a boat develops a serious leak, crew and passengers usually bail-out, but our government and the troika chose to sink the boat.

This tiny tax haven serving several thousand corporations/investors, was of little consequence to the Fed, the troika, IMF and those major players like Singapore, Switzerland, the Cayman Islands, the island of Jersey, Gibraltar, etc. where funds to the tune of over 200 trillion are deposited in non-functioning registered offices; e.g. an eight roomed house in the Caymans with over 18,000 company registrations and not a single ‘brass nameplate’.

Colgate-Palmolive, with its factories in France, recently moved its ‘head office’ to Switzerland – a corporation that turns over 20 billion annually and now pays 6 per cent corporation tax instead of the 30 per cent it was paying in France.

Fyffes Bananas moved its head office to Jersey and pays virtually no tax at all to the government of Costa Rica, where the bananas are grown or in Europe, where the bananas are sold.

There are over 200,000 corporations/companies avoiding payment of taxes to countries in which they grow their profits – Starbucks and Google are two well known examples.

Tax avoidance counsellors like Ernst & Young, KPMG Ltd (six offices throughout Cyprus) Price Waterhouse and many others, devise intricate schemes/loopholes in tax avoidance to enrich the rich and further impoverish the poor.

If a government cannot collect taxes from devious corporations where else will it search if not knock at the doors of the ordinary citizen?
The wealth of the world is held in the hands of one tenth of one per cent of the world’s population, and most of it offshore! That gives us a total of seven million stinking rich.

The Swiss banker, UBS actually dispatches tax advisors throughout the world soliciting investors to bring their dosh to Switzerland, where the vaults are straining under the weight of overload.

Tax avoidance schemes worldwide are the cause of today’s impoverished treasuries.
Over this past 20 years the world’s wealth has more than quadrupled, and most of it sits unused in Swiss banks. Poverty could be eliminated in a stroke, disease annihilated, hunger abolished and wars ended if only wealth was distributed evenly and due taxes from multi-nationals rightfully paid.

Corporate altruism does not justify tax avoidance.
Money is now the master of the house. (Matthew 6:24)

Shareholders at the Bank of Cyprus were again robbed blind this week by a new board, the members of which probably hold tax haven accounts offshore.

Our minister of finance, Harris Georgiades only has to flap his ears with statements like, ‘I do not envisage any new taxes’ for us to know there will be, and that our standard of living is set to fall even further.

What he doesn’t say is that in ‘tax-haven’ Cyprus our bankrupt property developers/banks will be protected at the cost of the ordinary tax payer – that our flag of convenience shipping will also enjoy similar protection as will MPs, their cars, perks, pensions and bodyguards.

Georgiades and his EU confrere ministers of finance will increase direct/indirect taxation and unemployment of the masses, slashing benefits and pensions, thus taking money out of the system and reducing the spending power of the ordinary man, while the real crooks (tax advisors and large multi-nationals/corporations) pile billions into one or other of the forty odd ‘paradis fiscaux’.

Once the greed-driven have acquired and protected, they begin to covet. They are not satisfied with all they have; their eye is on all that they don’t have. (Luke 12:15) This coveting begets more greed, the greed begets more selfishness, and the selfishness begets more coveting and so on towards madness.

Yes, it’s paradise at the moment for multi-nationals and hell for us! Governments must do more than simply pay lip service to shutting down tax havens. If they don’t then the ‘Walls of Jericho’ will come tumbling down and money become worthless!

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By Loucas Charalambous

ONE OF the most serious issues that will need immediate attention by the new board of the Bank of Cyprus will be what to do with the very big non-performing loans (NPL) on its books.

In July there was a big public row after the then chairman of board Sophoclis Michaelides spoke about the possibility of splitting the bank into two separate entities, the first dealing with commercial business and the other with asset management.

The leaders of both AKEL and DISY expressed strong objections to this idea, though their comments were marked by a large dose of populism. They cited the danger of re-possessions of the homes of those on low incomes.

“I would not like to wake up one morning and see people’s properties being auctioned off at 20 or 30 per cent of their value,” said DISY chief Averof Neophytou at the time.

He ignored that Michaelides had said that if the bank was split into two the properties of small businesses and low income bank customers would not be at risk. The plan would deal with the NPLs of developers he explained.

It is therefore clear and rational that any decision to separate the operations of the bank would not have as its objective the re-possession of small properties (apartments and houses) bought with loans and used as the home of the borrower.

The split would be designed to deal with the massive, unserviced loans of the big sharks who led the BoC to the brink of bankruptcy. It would be the NPLs of big developers and big businessmen which would be taken over by the asset management company.

In last week’s column I referred to two cases that had been revealed by Kathimerini regarding Leptos Estates and Aristo Developers, which belonged to a former chairman of BoC, and were truly astonishing.

In 2012, while the country was deep in recession and the bank unable to meet its capital needs, the BoC management, quite scandalously, gave new loans to these companies – €222 million to the first and €140 million to the second. Incredibly, in the previous three years, these companies had not even been paying the interest on their existing loans.

What purpose would be served by keeping these and similar NPLs at BoC? So the bank can include in its accounts income from interest that will never be collected, adding this to its provisions and thus increasing its losses?

It is very clear that the transfer of loans that will never be repaid and of properties used as their collateral, to an asset management bank would be the best solution. Admittedly, an attempt to sell these properties now, so the bank could recover its loans, would not be wisest decision as it would not secure reasonable prices for them.

There are however, among these assets, unfinished buildings, the completion of which could be done in two ways: by the asset bank making capital (assuming it has it) available or by their sale to foreign investors who would pay for their completion with funds from abroad.

This solution, apart from creating jobs, would have two benefits – first, it would allow the delivery of apartments or houses to the buyers and second, there would be revenue for the state, from the transfers of the unfinished buildings and transfers of the properties to the buyers, who will be dealing with a reliable seller.

In the case of tourist developments, once it takes ownership, the bank could reach a deal with investors or tour companies regarding their sale; these companies could agree to pay for the completion of the projects in exchange for having use of them for a pre-agreed period.

There is no doubt that once an assets bank takes control of mortgaged properties it will find ways to make money from them, even if this takes some time. It would be better than leaving the properties under the ownership of the bankrupt customers resulting in more losses for the bank.

Under the circumstances, the new board needs to be courageous and determined in taking these decisions, without taking into account the objections of Averof and Andros Kyprianou, who should stop interfering in the affairs of the BoC. They have no authority to get involved in how a privately owned bank is managed.

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INFORMATION about the work of environmental charities and other organisations working on the island will next month be included on the Green Party website.
The scope of this section of the website is to create an archive of data about oraganisations’ history, their social activities and any other information available.
“I recently had a meeting with the Paphiakos animal welfare charity and I asked for a written statement of their history, profile and the services they provide. I did not do this to check-up on them, but rather to have an updated record that will be uploaded onto the website,” Environment Commissioner Ioanna Panayiotou said.
Paphiakos had requested the meeting because they are having problems with funding and they are understaffed. They are the organisation that municipalities turn to to remove dead animals from the road and they neuter cats for free.
Panayiotou said the idea behind the website is for the public to have a point of reference when they need to contact such organisations.
“It can also be used by researchers and organisations to find out what other kinds of organisations like them are out there. The hope is that they can help each other solve problems or exchange advice,” Panayiotou added.
The organisations targeted are animal shelters, animal welfare charities, environmental companies, NGOs dealing with matters of the environment and universities that teach or are involved in green topics.
“These could include Green Dot for example,” Panayiotou said.
Animal shelters and animal welfare organisations are having dramatic problems recently as their funding has been cut. The general public also cannot contribute to such organisations as it did before.
“If animal shelters and animal welfare establishments were not running, we would have a much bigger problem with animals on our hands.
“Volunteers do a lot to help stray animals and I would like to congratulate them but their work is not enough unfortunately. An animal police force should be put into action and the laws against animal crimes should be upheld,” Panayiotou said.
Panayiotou has discussed these problems with municipalities and she always gets the same response; that they are wiling to help but do not know how.
“The economic problem is also a factor. The solution does not lie with just municipalities, the police or volunteers, it must be found by following a collaborative effort,” she added.

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MORE than 85 exhibitors will gather next weekend in 6,500 square metres of space to showcase products and services to help cut the cost of power, a sensitive issue in times when people’s incomes are falling ans the cost of power increases.
Products on show at SAVENERGY 2013 will include:
Heating systems using renewable energy sources
Photovoltaic systems
Wind power
Systems to monitor electricity usage
Electric and hybrid vehicles
In parallel to the SAVENERGY exhibition the Employers and Industrialists Federation (OEV) will organise the sixth water technology exhibition ENVIROTEC 2013. Those taking part aim to protect the environment of Cyprus and improve the use of water sources.
Twenty companies will take part, with an exhibition area of 1,000m2.
Products on show include:
Systems to reuse water
Biological cleaning
Water filters
During the opening of the exhibition awards will be given to businesses that have saved energy by using innovative systems. This will be €8,500 to a business and €1,700 to a private home considered to best use energy.
Renewable energy sources in Cyprus in 2012 accounted for 7.5 per cent of the energy used, surpassing the target for the period 2015-16. The island’s European commitments aim to see this figure rise to 13 per cent by 2020, and the energy ministry expects to succeed. A national target of 10 per cent of energy use provided for by renewables by 2016 also looks set to be met.
The biggest tool towards meeting these targets, according to the ministry, are grant schemes. Since February 2004 when they were first introduced €91.1 million has been given to 47,825 schemes.
One scheme the government is currently putting focus on is net metering by private homes.
It is not only the government that is working towards reduicing the price of electricity, so is the Electricity Authority (EAC)
According to the authrotiy’s general director, Stelios Stylianou, in 2011 and 2012 the cost of fuel accounted for 63 and 59 per cent respectively of the total expenses of the EAC.
Auuthority efforts to see bills reduced include the trialling of a project to save money on road lighting, which will see a saving of up to 48 per cent by 2014. The project involves 16 local authorities and 63,000 LED lights.
In terms of photovolataics, EAC is developing a park at its substation in Tseri capable of producing 3MW of electricity which will be up and running by the end of 2013 or the beginning of 2014. Also, it has signed a contract to create a windpark in Ayia Anna which will produce 10.8MW of electricity.
SAVENERGY 2013
September 20-22, halls 5 and 6 at the State Fairgrounds in Engomi, Nicosia. Opening hours: Friday 4-10pm, Saturday 3-10pm, Sunday 12-10pm. Free. www.savenergy.org.cy

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By Bejay Browne
AFTER the turmoil of the banking crisis in March and fears about foreigners flocking from the island, those in the industry in Paphos say more have arrived in the last few months than have left.
Owner of Peter Morton Removals – PMR- which has been operating in Cyprus for more than eight years – says the last eight months in particular, have seen a massive increase in the number of expats moving to the island.
“Previously our ratio of people of all nationalities leaving Cyprus to those coming here to live was about 80/20. This year, this figure has now changed to about 50/50 and most of them are British,” he said.
Natalie Alexiou of Alexiou Real Estate agreed. She said an increasing number of British clients have approached her in recent weeks, with the intention of renting property in Paphos.
“Most of them are looking for short term rentals though. I presume this is to see if they like living here. Most are requesting three or six month contracts.”
However, Alexiou said she believes it will be some considerable amount of time before the British purchase real estate in Cyprus and show trust the banking system again. “People are being very cautious”.
And their sentiments were reflected by a third company – rental specialists 123-asap, which said a steady flow of Brits are still moving to Paphos.
“We have all sorts of people looking for homes. They have moved here from the UK and are interested various types of properties, from the villages to the Tomb of the Kings road,” a spokesman said.
“They haven’t been put off by the banking crisis at all,” she said.
Morton says that recent weeks have become so busy for their team two new members of staff are being employed to help with the work load.
Although many Brits are aware of friends or acquaintances leaving the island, he says they are probably unaware of the vast numbers moving here.
“The problem is, people only know about their friends who are leaving, obviously they don’t know about the hundreds arriving from the UK.”
According to Morton, most of the people arriving from Britain are either retirees or those with money.
“It’s very hard for young families to earn enough money here to support themselves and their kids. We are seeing more middle aged and older people coming to live here. We thought people would be put off by the banking crisis but that hasn’t been the case. Maybe they were already committed to leaving and some are leaving their cash in the UK to draw out whenever they want.”
As the property market is moving in Britain again, Morton believes more Brits have the ready cash to move to Cyprus.
He said UK families and individuals relocating to Cyprus are choosing areas all over the island, but the favourite destination remains Paphos, with many choosing to live in Peyia.
One such couple is Carole Rainford, 70, and her husband David, 60. They moved to Paphos from near Bath in the UK on April 1, undeterred by the banking crisis which shook the island just a couple of weeks before.
“The problems being encountered in Cyprus didn’t put us off moving here, we love it and haven’t regretted our decision at all,” Carole said.
“We decided to move here for a number of reasons; our daughter lives here, we love the island, the weather and the taxation is much better here than in the UK.”
However, the couple decided not to transfer a substantial amount of money to Cyprus, instead leaving deposits in the UK. They also elected to rent a property and not buy one.
“We would seriously consider moving more funds to Cyprus when the financial situation here becomes more stable,” she said.
“A number of our friends in the UK are also seriously considering moving to Cyprus,” she added.

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THE BANK of Cyprus finally has a board representing it new shareholders, but looking at its composition it would be no exaggeration to say that our only hope are the Russian directors. They are the only ones likely to provide the kick-ass leadership that has been so desperately lacking at the sinking bank the last six months.

They have a strong incentive, recovering some of their lost millions, will have no links – and therefore no obligation to help – to big, local businesses that cannot service their loans and will abhor seeking consensus with the union on staff issues. The bank would benefit from the more ruthless management style used at businesses in Russia.
There are six Russians on the 16-member board, all with significant business experience, but all press attention has been focused on the man with the unpronounceable surname – Vladimir Strzhalkovskiy – who was reportedly a former KGB colleague of President Putin.
Strzhalkovskiy, who was also formerly CEO of the giant mining company Norlisk Nickel – the biggest nickel producer in the world with an annual turnover in excess of $10 billion – was elected vice-chairman and is more than likely to rustle a few feathers.
On Wednesday morning, the day after their election, several of the Russian directors arrived at the bank accompanied by their hired muscle and the first thing they asked to see, according to our mole, was a list of the bank’s biggest non-performing loans, news that may have caused a little stress and anxiety among our big developers.
There were also reports that the temporary CEO Christos Sorotos had been shown the door by the Russians but there has been no confirmation from the bank.

MEANWHILE the BoC is currently looking for Russian speakers to hire as translators for their new directors who are, understandably, unwilling to speak in English at board or committee meetings. It might not be long before senior managers at the bank would start taking Russian lessons as knowledge of the language could be considered a brown-nosing advantage.
Most senior managers of the BoC had decided to attend last night’s annual Cyprus-Russian Gala at the presidential palace in the hope their unwavering commitment to strong ties between the two countries would be seen and appreciated by their new Russian masters that might also be there.
At least they did not have to pay for the €90 a head tickets. The gala is in aid of the Radiomarathon Foundation, which the BoC inherited together with the €9.5 billion ELA from Laiki, and several dozens of tickets were purchased by the bank in order to help the charity. After the election of the new board, there was big demand for these tickets from the senior managers, who felt their presence at the gala was a professional duty.

AFTER the election of the new board, rumours were circulating that the Governor of the Central Bank Professor Panicos, whose approval of the new directors was necessary, had decided to make two of them stand down because he had deemed them unfit to be directors; one was supposedly the vice-president, but does Panicos possess the cojones to stand up to a former Putin colleague?
This joke about the approval of directors by the Governor, which the Central Bank press office has been making a big issue out of, has a lot to do with the insecure professor’s wounded ego, which was dealt a bitter blow by the crafty DISY chief Averof.
Power-mad Panicos had insisted he would personally use the 18 per cent shareholding of the resolution authority in the BoC in the board elections. But Averof changed the law 10 days ago, making the resolution authority share its powers with the ministry of finance and the Securities Commission.
These two then decided by majority to give the power to vote in the BoC elections to the perm sec of the finance ministry, thus excluding Panicos who has been sulking like a kid deprived of his Playstation ever since.

THE SULKING Governor has been trying to get his own back on the government. Last weekend he leaked, via a third party, an e-mail from the troika warning the government against political interference in the election of the BoC board to Politis which made a front page story out of it. No prizes for guessing who tipped the troika off.
In another attempt to show us he remained super-powerful, the complex-ridden professor had his press office issue statements informing us that the Governor had the authority to cancel the election of any new BoC director he personally considered unfit to sit on the board. He had not vetted the candidate before the AGM and board elections and would do so subsequently, a Central Bank announcement said.
Then there was the obligatory leak about the troika’s alleged dissatisfaction with the new board of directors. The report was carried on Thursday by the professor’s favourite medium for leaks Stockwatch website, which has become the semi-official mouthpiece of the Central Bank.
Stockwatch said the troika was ‘concerned’ about the composition of the board and had asked to see the Central Bank’s evaluations of those elected as directors.
As if the troika gives a toss about who is on the bank’s board. But the pitiful Panicos has made out that the lenders are concerned so if he decided to flex his weakened muscles by making a couple of directors stand down he could courageously blame his decision on the troika.

CALL ME ultra-conservative or reactionaty but when I saw the photograph of the new chairman of the B of C, Kristis Hassapis, I was shocked by his looks. Hassapis, an economics professor at the University of Cyprus, looks a more like a vain, over-aged rock star striving to maintain his long-lost youth with his long wavy hair and designer stubble than a banker.
Perhaps I am being a boring old fart but I would have much greater confidence in a bank chairman who pays regular visits to the barber, shaves every day and wears a suit, shirt and tie. Is an unshaven, long-haired, middle-aged academic going to restore much-needed public confidence and trust in the struggling BoC? And public confidence could be completely shattered if, as a compromise, he decided to wear his hair in a pony-tail.
Hassapis may be an excellent economics professor but academic qualifications mean nothing as we have seen. Does anyone need reminding of the damage done to the banking sector by an economics professor whose name begins with ‘P’?

THE QUESTION everyone is asking is how Professor Hassapis became chairman of the BoC? It was reported that he represented the ‘provident funds’ but we were never told which funds. The ‘provident funds’ he represented were those of the members of the bank employees’ union ETYK.
ETYK became the second biggest shareholder in the BoC after the bail-in of its provident fund deposits so it had the votes to elect its people to the board. To show his support of Hassapis, union boss Loizos Hadjicostis arrived at the AGM with Mrs Hassapis, who is a senior official at the labour ministry.
Having a Hadjicostis protégé as chairman of the bank is not just frightening it is alarming, which is why I will repeat that the BoC’s only hope are the Russians.

THERE was one novelty at the BoC AGM that we would do well to introduce to our political elections. Shareholders were allowed to cast negative votes against candidates they did not approve of. It would be great if we could the same next time there were parliamentary elections. Those with the fewest negative votes would be elected, which would mean the candidates that voters believed would do the least harm to the country would enter parliament. As experience has shown, giving power to the most popular candidates is a big mistake.

OUR GOOD friend and Alithia columnist Alecos Constantinides took exception with our establishment’s remark last week about the “AKEL sheep that were brought to the House of Representatives to bleat against the co-op bills.”
In his Wednesday column he pointed out that the “sheep stayed home”. Those “100 to 200 people that were outside the House, during the debate of the bills, were not sheep, they were paid employees of the central committee, paid employees of the party, the nomenclature of the party.”
It was a fair point and the same phenomenon was evident on Monday when the commies organised a march to the US embassy to express their opposition to an air-strike on Syria. Again the sheep stayed home and the protesting was done by the paid employees of the party, who must have seized the opportunity to earn some overtime pay as the march took place after office hours.

SPEAKING of Syria, it was wonderful to hear that Marios Garoyian’s proposal for preventing an air strike by the US was adopted by Moscow and accepted by the Yanks. DIKO welcomed Moscow’s proposal for the destruction of Syria’s chemical weapons and said on Tuesday “this was exactly the idea that had been publicly presented the previous week by DIKO leader Marios Garoyian.”
It was disappointing the Russian government did not give any credit to Marios. Meanwhile, the Greens also claimed ownership of the Russian idea, as the Perdikis party had submitted this proposal to the House of Representatives and the European Parliament.

BACK IN the late seventies a Nicosia businessman bought a plot of land just outside Prodromos village in the Troodos mountains and built a country house. However, because of its location the house did not have running water.
The plot on which it was built was at an altitude higher than Prodromos so his house could not be given water from the reservoir that supplied the village. To this day, the owner had to pay a water truck to fill the house’s water tanks.
But in the last week the house-owners were given some good news – Prodromos village would soon be supplying the house with running water because it would build a new reservoir. There are another two houses, one very recently completed, in the same area above the village that would no longer need the water truck.
The Prodromos mukhtar – or community leader, as they say in polite society – is not too thrilled about having to build a reservoir his community does not need at a cost to the village council of some 50 grand.
Building a reservoir, at a cost of 50 grand, to serve three houses used as holiday retreats for a few weekends and the odd week every year is a resoundingly stupid idea. It makes you wonder who took this lunatic decision at a time when local authorities are being starved of cash by the government because the state is broke.
Surely the poor Prodromos council could have wasted this money on a slightly less meaningless investment that may have been of some benefit to locals.

WHO TOOK this insane decision? From what we hear, the recently completed house belongs to a very influential personality, who pulled a few strings at the interior ministry and was thus spared the inconvenience and expense – a couple of hundred euro a year at most – of having to rely on a the water truck supplying the house with water.
The owner of the new house, we are reliably informed, was a close relative of the late Archbishop Makarios, the members of whose extended family still seem to have a hell of a lot of clout in state circles. The Makarios clan is treated as our royal family.
Our establishment will never again mock those who still used the slogan ‘Makarios lives’, because they have a point. Not only ‘Makarios lives’ he also decides local government policy.

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NO PUBLIC sector group has defended its privileges and interests with the tenacious single-mindedness displayed by state school teachers. When the troika proposed they taught an extra period a week so that the state would not have to renew the contracts of 500 temporary teachers they threatened indefinite strikes. In the end, the Anastasiades government came up with a compromise by which a small additional pay cut was imposed to cover the cost of keeping on the 500.
When it subsequently transpired the government would need only a couple of hundred contractual teachers because of the decrease in the number of students enrolled for the new school year their union bosses protested every day on radio and television shows, claiming they had been fooled by the government. Such was the pressure they applied, President Anastasiades tried to appease them by coming up with a ludicrous suggestion – the teachers whose contracts would not be renewed could be hired by the National Guard. To do what he did not say but it would appear the idea has been abandoned.
On Wednesday the leaders of primary school teachers union POED met the president to push another demand – giving permanent jobs to 300 teachers employed on yearly contracts. In the past the practice was for 100 such teachers to be hired permanently by the state every year but because it had not been followed in the last three years POED demanded the appointment it was owed was made altogether now that the state has no money at all. Astonishingly, the president promised to try to satisfy this demand. He reportedly told the union he would try to persuade the political parties to lift the moratorium on public appointments for the sake of the teachers.
This would not need troika approval as it would not incur an additional expense for the state as the 300 teachers were already receiving a state salary. The president’s irresponsibility and poor judgment is frightening. He is setting the worst possible example and undermining the government’s message about the need for cuts. The public sector, including state education, is grossly overstaffed, there is a desperate need to downsize it in order to reduce the crippling public payroll and there is a freeze on all appointments but the president wants to give permanent jobs to another 300 teachers. It is almost surreal in its absurdity.
It is a very peculiar way of pursuing the target of reducing the public sector by a thousand workers every year. On the one hand public employees are being encouraged to take early retirement for numbers to be reduced and on the other, the president wants to hire more because he cannot resist his populist urges. He may have pandered to POED in the knowledge that the political parties would not agree to lift the moratorium, but if there was such a calculation it does not honour him. What confidence could people have in a president who is playing populist games at a time the country desperately needs strong leadership?
This mindless politicking was taking place while the finance minister had still not been able to make the spending cuts of €700 million to the 2014 budget agreed with the troika. According to the MoU the budget deficit should not to exceed 4.3 per cent of GDP next year. Ministries had cut operational costs as much as they could but the savings still fell short of the finance ministry’s target. At the time this was reported the deputy government spokesman was giving public assurances that public sector salaries and pensions would not be cut. How are cuts going to be justified when the president is acting as if the state has unlimited funds and wants to hire even more public employees?
The 2014 budget needs to be finalised and submitted to the Council of Ministers for approval at the beginning of October so it could subsequently be debated in the legislature. However ministries have been unable to make the necessary cuts to their respective budgets, claiming there is no more ‘fat’ left to get rid of. We very much doubt this is the case, but if it were there is a very simple and easy solution – the government could cut an extra two or three per cent from public employee salaries and pensions (including those of teachers) and meet its €700 million cuts target.
There would be no need for the finance minister to keep haggling with every ministry over cuts while public employees’ would still be the best-paid workers in the county. But it might be difficult to impose this tidy and sensible solution when the president wants to appoint more employees and his spokesman has ruled out pay cuts, both creating the false impression that public finances are in perfect shape.

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By Stefanos Evripidou
THE LAST six months have seen a fundamental shift in Cyprus’ foreign policy, away from “doubtful” positions of the past to a “clear and assertive” stance on key developments in the volatile region, Foreign Minister Ioannis Kasoulides told the Sunday Mail.
The shift in policy is considered an investment, geared towards proving Cyprus’ credibility as a reliable partner to the West in return for which the country hopes to reap dividends later, the minister said.
In an interview with the Sunday Mail, Kasoulides laid out his ministry’s plans for anchoring Cyprus’ foreign policy in Western waters by proving Cyprus’ worth as a relevant and useful EU actor in the troublesome region of the eastern Mediterranean.
“This is exactly the argument we want to make. And we have proven within six months, through our actions, that we are a reliable and credible partner in facing today’s threats to the existing security architecture,” said Kasoulides.
“And the threat is definitely not Russia, because the Cold War is over. The threat is terrorism, extremism, fundamentalism, nuclear proliferation, trafficking of human beings and other forms of organised crime. And we are at the frontline of this threat,” he said.

Kasoulides with his Egyptian counterpart earlier this month

The minister listed a number of “unequivocal” steps taken by the government of President Nicos Anastasiades since taking power in March that attest to the new shift in foreign policy: extraditing an Iranian national to the US on suspicion of violating UN arms sanctions; prosecuting (and convicting) a Hezbollah member of plotting to attack Israeli citizens in Cyprus; and rerouting a Cyprus-flagged container ship carrying dual use material believed to fall under the EU sanctions regime on Syria.
Kasoulides, a former Member of the European Parliament (MEP), stressed that these actions were in stark contrast to the previous government’s policy where, at best, “there was doubt as to where we stand” on key issues.
He gave as examples the Monchegorsk ship carrying the munitions that eventually exploded at Mari, and the Russian-operated Chariot ship which was allowed to leave Limassol port carrying ammunition and headed for Syria.
Kasoulides said the “change of approach” came from the fear that a “monothematic” foreign policy centred on differences with Turkey risked making Cyprus “irrelevant” and “boring” for interlocutors on the international stage.
“So the first choice of this government is to give emphasis to a specific and assertive foreign policy on other issues than the Cyprus problem” without abandoning the rights of the Cyprus Republic sometimes disputed by Turkey.
“Just to say we have very good relations with our neighbours is not enough. We have to be relevant in all developments in this very volatile and important region that usually, not just now, attracts the attention of the whole world. Cyprus’ foreign policy has to count,” he said.
And because of its geographic location, on the edge of an important yet unstable region, Cyprus can add value to the EU’s common foreign and security policy, he said.
“Just having a foreign policy that retracts into the safety of the lowest common denominator does not offer any benefit,” he said, adding: “Our policy of being a credible and useful partner has to pay dividends for the national interests of this country, without any doubt.”
Earlier this month, Kasoulides visited Cairo to meet the new Egyptian leadership despite heightened fears of an imminent US-led strike on Syria and ongoing turmoil in the North African country.
While some international partners questioned the legitimacy of the Egyptian military forcing from power the democratically elected President Mohamed Morsi, Kasoulides was clear that this was simply the latest stage in the ongoing Egyptian revolution which began in January 2011.
“This was not a coup. We have known coups in Cyprus and in Greece and there is no similarity whatsoever.
“Certainly, some may argue differently, but you have to take a position. It’s either this or the other and we have chosen.”
During his visit, Kasoulides proposed enhancing bilateral cooperation on energy issues. The interim Egyptian government went a step further, proposing a trilateral consultations process and cooperation between Cyprus, Greece and Egypt on a range of issues going beyond energy.

The situation in Syria means Cyprus would house certain refugees

On Syria: “We made a choice there as well. (President Bashar al-) Assad sooner or later will go. As things appear at the moment it will be later and not sooner. Even if he stays… how can he help us?”
Regarding doubts over the use of chemical weapons by the Assad regime, Kasoulides said Cyprus was not in a position to reach its own conclusions.
“We have never said who used the chemical weapons. We have unequivocally condemned use of chemical weapons as a crime against humanity which should not remain without consequences,” he said.
In any case, Cyprus was never asked its opinion.
“It was asked to serve as shelter for the evacuation (from the nearby region) of all foreign nationals from EU and other friendly countries. So Cyprus has to preserve this capacity as a shelter, which is incompatible with it becoming party to any kind of military operation in Syria.”
But this did not prevent widespread concern in Cyprus that British bases on the island made it a target for possible retaliation attacks by Assad.
Asked to clarify the terms of the Treaty of Establishment of the Cyprus Republic, Kasoulides said the treaty stipulates clearly that the UK should consult the Cyprus Republic government on events of this nature, and take into serious consideration its opinion.
“But the ultimate decision-makers are the British. And so far, on this issue, not only were we consulted, but they are not going to use the Akrotiri base as a launching pad for military strikes, nor were they planning to before the House of Commons vote (against British involvement). Not because we asked them to but because they themselves so decided, so there is no issue here.”
However, the Syrian conflict has served to highlight the risk that engagement in the region poses to Cyprus, whatever choice Britain makes.
“This is a very serious issue. It is true and that is why at the end of the crisis with Syria, we need to take stock of what has happened and discuss this fact very seriously with our partners and other countries,” he said.
“The issue of security for Cyprus has always been the threat from Turkey. Now I think everybody must sit down and reconsider, and begin to see Cyprus as the frontier post of the EU, if not the Western world as I call it.”
In a possible reference to Cyprus’ desire to join NATO’s anteroom Partnership for Peace (PfP), Kasoulides said other countries needed to “review their position of neutrality and equidistance between the two sides of the Cyprus issue, and also view the issues that don’t have anything to do with the dispute with Turkey, but have to do with the fact that we are the frontier, at least of the EU”.
And how will Cyprus’ relationship with Russia evolve in the process?
“We will maintain our relations with Russia. I see nothing incompatible. The Cold War is over. Russia now has something much more than PfP. Russia has a strategic partnership with NATO. They hold joint military exercises.”
It is Cyprus that remains the only EU member state with no relationship with NATO.
“We need some kind of relationship. And the most innocent programmes that exist are within the PfP.”
Does Cyprus stand a chance of getting in, given Turkey’s track record of vetoing Cyprus’ membership to international organisations?
“Let me put it this way. I think a process to bring things to maturity before we apply is necessary. It is much more important for us to declare our disposition and desire to join in order to give the EU and NATO an opportunity to resolve existing problems than the end result.”
On Turkey, the minister said the large country will remain in the eyes of the US and EU an important partner and ally in the region.
“This will never just suddenly go away. And Cyprus has no ambition to change this position vis-a-vis Turkey and its allies and partners.”
But through its foreign policy, he argued, Cyprus can demonstrate, particularly in its triangular relationship with Israel and Greece, that there is another solid platform the West can rely on.
Even if relations between Israel and Turkey improve, this is not a zero-sum game, and ties between Cyprus and Israel are there to stay regardless.
“The relations between Israel and Turkey, whatever their future is going to be, will never be the same again as they were a decade ago. If there is ever an improvement of their relations, this will be based on interests. In the case of Cyprus, Greece and Israel, there is also a commonality of values, which is not the case with Turkey.”
And the benefits emanating from this strengthened relationship with Israel can already be seen through “the Greek-Jewish alliance within the American congress and within US decision-making circles”.
So, how do these developments impact the Cyprus problem, where Greek Cypriots have faced an uphill battle since 2004 to convince the international community of their will for a solution?
“First, it takes two to tango. And second, President Anastasiades and I are in no need of credentials in terms of our political will to solve the Cyprus problem. Our past speaks for itself.”
Kasoulides refused to be drawn into details on efforts to restart the peace talks, saying only Turkey was the most important stakeholder in the process.
He added that the two appointed negotiators have already met twice and will meet many other times until the ground is prepared for the two leaders to be able to meet, issue a common declaration and agree on the methodology to proceed with the talks.
When it is suggested the international community has become exasperated by the lack of progress on the issue, the minister loses the diplomacy.
“There is a notion there that certain people are exacerbated, and they never think how exacerbated we are. I give nobody the right to be more worried about Cyprus than me, and I don’t like the patronising.”
While the return of Varosha could provide an obvious, if somewhat unlikely, boost to the talks, a “game changer” in the dispute is the finding of natural gas in Cyprus’ exclusive economic zone (EEZ).
“It is a very strong incentive for all stakeholders, including Turkey.”
However, if it becomes the subject of threats and blackmail, it will complicate the Cyprus issue even further and make matters worse, he added.
In the very long-run, Kasoulides feels that hydrocarbons in the eastern Mediterranean could be used to bring all countries in the region closer together, taking as a historic example, the intricate regional collaboration of former enemies that followed the establishment of the European Coal and Steel Community after the Second World War.
Cyprus, which has a common and adjacent EEZ with Lebanon, Israel and Egypt could play the role of common denominator, and help implement regional hydrocarbons cooperation.
“I don’t see it happening in the foreseeable future, but as a vision of a long-term perspective,” he said, adding, “For some other generations perhaps”.

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Cyprus may need to only partly privatise state-owned enterprises to meet one of the conditions of its international bailout, President Nicos Anastasiades said on Sunday.

The €10 billion euro bailout deal Cyprus reached with the European Union and International Monetary Fund this year envisages selling some state assets.

Authorities could convert state enterprises into joint-stock companies and seek out strategic investors with the state retaining a controlling stake, Anastasiades said.

“Part of the share capital could be allocated to a strategic investor, without full disengagement (of the state) from semi-government corporations,” Anastasiades was quoted as telling the Kathimerini newspaper.

Bailout terms state the process would be on a case-by-case basis, and the methodology could include the sale of shares or assets, licences or concession agreements.

Cyprus assigned PricewaterhouseCoopers (PWC) to look into a privatisation strategy for state-owned firms on September. 9.

International lenders have identified telecoms company Cyta, the dominant electricity operator and seaport commercial activities as potential privatisation targets, raising about 1.4 billion euros.

It was not clear whether that target assumes full privatisation of these firms. They are known as semi-government corporations, even though they are fully owned by the state.

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By Ed Osmond
Swansea City midfielder Jonjo Shelvey struggled to conceal his emotions after taking a leading role at both ends of the pitch in the 2-2 Premier League draw with his former club Liverpool on Monday night.
Shelvey opened the scoring for Swansea but two poor passes allowed Liverpool to take the lead before his neat header set up striker Michu for a second-half aqualiser.
“I just want to say sorry to the Swansea fans for the two bad mistakes that gifted Liverpool a draw and I thought we deserved more than that,” Shelvey told Sky Sports.
Shelvey joined Swansea from Liverpool in July for 5 million pounds.
“I did not really want to celebrate when I scored – I still have respect for the fans and loved every minute at Liverpool, but it is hard to contain emotions,” he said.
“You just want to go into a hole where nobody can see you but it has happened to great players over time.
Shelvey broke forward in the second half to nod a neat pass into the path of striker Michu, who clipped the ball past Simon Mignolet to secure a point for Swansea.
“I showed a bit of character to keep getting on the ball,” he said. “I still feel I have given Liverpool a draw but it was a great game to play in.”

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By Peter Griffiths
British Business Secretary Vince Cable has said it is “possible” that the coalition between his Liberal Democrats and Prime Minister David Cameron’s centre-right Conservatives could break up before the next election in 2015.
There has been no hint that Lib Dem party leader Nick Clegg shares Cable’s view, and Cable said there was no discussion yet within the party about the issue.
Instead, Cable’s comments at his party’s annual conference in Glasgow, Scotland, combined with fierce criticism of the Conservatives, were seen by some as a bid to win over those on the left of his party to a potential coalition with centre-left Labour after 2015.
Asked at a conference meeting late on Monday whether an early coalition break-up was possible, Cable said it was “certainly possible”, adding: “We are not at the stage of talking about that process. It is obviously a very sensitive one. It has got to be led by the leader.”
Some of Cable’s supporters hope he could replace Clegg as Liberal Democrat leader and move the party further left, into coalition with Labour, if the 2015 election is inconclusive.
With an election due in May 2015, polls again suggest that no party may gain an outright majority and another coalition government – rare in Britain’s history – is possible.
A YouGov poll in the Sun newspaper put Labour on 37 per cent, the Conservatives on 34 per cent and the Liberal Democrats on 10 per cent.
Tensions between the Liberal Democrats and the much larger centre-right Conservatives have surfaced periodically since they joined forces in 2010, with hardliners in both parties barely able to contain their mutual disdain.
But Lib Dem leader Nick Clegg and Cameron have always played down their differences and insisted the coalition must stay the course for the sake of Britain’s economic recovery.
The coalition set itself the task of rebuilding the economy after the financial crisis. It has survived arguments over austerity, taxation, Britain’s place in the European Union and planned reforms of electoral boundaries and the upper chamber of parliament, the House of Lords.
On Monday, Cable pouring scorn on the Conservatives’ “ugly politics” and called them the “nasty party” in language more akin to that used by the opposition Labour Party.
Liberal Democrat Treasury Minister Danny Alexander, seen as close to Clegg, told ITV television on Tuesday: “We are going to stay in the coalition government right up until the election in 2015.”

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