Cyprus Mail: News Articles in English, 00-03-08

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From: The Cyprus Mail at <http://www.cynews.com/>

Wednesday, March 8, 2000

CONTENTS

[01] 'Best time' for a Cyprus solution

[02] Hercus on peacekeeping review panel

[03] Government spurned offer for extra water from Dhekelia

[04] Four settlers deported after influx from the north

[05] Banks bring share index tumbling down

[06] Disy rounds on Akel over 1974 weapons claim

[07] Attorney-general blocks Igoumenides appointment

[08] ‘Witch cast spells to retrieve errant partners’

[09] Electricity prices to come down

[01] 'Best time' for a Cyprus solution

THERE ARE high hopes for progress towards ending the island's division this year, US presidential envoy Alfred Moses said yesterday on arrival at Larnaca Airport for a five-day visit.

The leaders of the two communities have already completed two rounds of proximity talks under United Nations auspices on a Cyprus settlement, the first in New York last December and the second in Geneva last month.

The third round, due to start in New York on May 23, is expected to be substantive and to focus on the core issues of the problem.

"This is the best time to make a settlement," Moses said. "All the factors are there to make progress."

Since the new round of talks began late last year, the first in more than two years, the Turkish Cypriot side has been pushing its demand for a confederation between two separate 'states' on the island. However the Greek Cypriot side is not willing to accept anything less than a bizonal bi- communal federation.

'All we need is the political will and commitment on the island to reach results,' Moses said.

He and his associate, US State Department Co-ordinator Thomas Weston, who was expected to arrive on the island later last night, are the latest in a long line of international and UN mediators who have tried to make progress towards a Cyprus settlement over the past 25 years.

The improvement in Greco-Turkish relations over the past six months has contributed to a better climate, which the international community is hoping will help in the search for a settlement on the island.

Moses said yesterday that if the opportunity created by the EU Helsinki summit is not seized now it will have been wasted. The summit last December in the Finnish capita accepted Turkey's candidate status for the bloc.

'What you need is political commitment and a willingness on both sides to compromise. Where we are today is the sides have positions that are different, but there is a recognition that what is ultimately in the interest of both sides is a comprehensive settlement,' Moses said.

During his visit Moses will meet President Glafcos Clerides and Turkish Cypriot leader Rauf Denkltash, who have just completed a round of talks with UN special Cyprus envoy Alvaro de Soto, the mediator at the recent proximity talks.

De Soto will leave the island later today after briefing the press on his week-long visit to assess the climate for the return to talks and the possibility of long-awaited direct negotiations in May.

But Moses indicated that although the commitment of the two sides to direct talks is evident 'they are not there yet'.

Wednesday, March 8, 2000

[02] Hercus on peacekeeping review panel

According to Reuters news agency, Annan said the group is expected to complete its work in time for September's 'Millennium Assembly', a summit of government leaders from around the world.

"It's a question of being clearer about what we are trying to do, what kind of forces we need to do it, and what are the conditions in which different kind of missions are appropriate and what do you do when circumstances change," Annan told a news conference in New York.

Cyprus has the longest-serving UN force in the world. Unficyp troops arrived on the island in March 1964 following a request by the Cyprus government in response to the outbreak of intercommunal troubles between Greek and Turkish Cypriots.

The force currently stands at around 1,200 mainly British, Austrian and Argentinian troops.

Dame Ann, a New Zealander, served in Cyprus for just over one year. She resigned last September for personal reasons. While here she engaged in shuttle talks between the two sides with the aim of bringing the two leaders back to the negotiating table.

Her policy of not revealing anything to journalists led to many run-ins with the local press. Dame Ann also made several organisational changes at Unficyp, many of which were unpopular with personnel.

Wednesday, March 8, 2000

[03] Government spurned offer for extra water from Dhekelia

CYPRUS could have an extra 20,000 cubic metres of desalinated water flowing within six months - and could have had it years ago if the government had wanted it, Olga Salangos, manager of the Caramondani desalination plant in Dhekelia, said yesterday.

"We can have (the extra) water in six months," Salangos said, and "we could have had a new plant in Dhekelia in six months pumping 20,000 cubic metres of water a day," years ago, if the state had taken Caramondani's June 1997 offer.

"I think we were approached by the government in January (2000)," about building a 20,000 cubic metre (20 million litre) capacity plant at the current Caramondani plant site, she said.

In fact, "we could go to 60,000 (cubic metres per day) any time we wanted" at the Dhekelia plant, she said, with some simple additions to the current machinery and building.

"We have an environmental study already done that would have covered the (extra) 20,000 cubic metres per day. We have the EAC power station here and we have enough electricity to cover the extra 20,000 cubic metres per day," she said.

"This power station was paid for by the government in 1996," she added, "so we don't see why they'd want to build another power station in another place, when the one here is ready. And we have the pipeline that can accept the extra 20,000 cubic metres of water per day" and carry it to the Southern Conveyor.

"We gave this offer to the government on February 2 this year, but this is just a copy of an old offer that was given to the government in June 1997, at the time the Larnaca (desalination) project was under consideration," she said.

At the time, "we gave the government our main offer for Larnaca, but at the same time we gave an alternative quotation for a 40,000-cubic-metre-per-day- plant here at Dhekelia in June 1997," she said.

If the state had taken the alternative quotation, "by now, they could have here 80,000 cubic metres of water per day" flowing into the cities along the Southern Conveyor, which stretches from Kouris Dam to Nicosia.

This would have solved the island's summer drought and the threat of even more draconian rationing this year than in previous years.

"We have never had any official reply (to the offer)," Salangos said. "We heard, but not officially, that one of the reasons (it was rejected) was because the tender was for Larnaca, and we gave an alternative tender for Dhekelia."

Nicosia Water Board Technical Manager Panayiotis Theodoulides said yesterday he had not yet got any Water Development Department (WDD) orders to tighten the rationing of water to Nicosia homes and businesses for this summer.

"If there will be further cuts, we are in very deep trouble," Theodoulides said. "Actually, the level of service we are giving now is barely adequate... We are not serving our customers the way we should, so if there are further reductions, yes this summer could be extremely bad," he said.

To prevent this, Nicosia Mayor Lellos Demetriades led a delegation of the mayors of Nicosia's suburbs into a meeting yesterday with Nicos Anastassiades, acting President of the House of Representatives, to voice their concern about the water crisis.

"The point is that no one can bring water to Nicosia during the summer. That's a fact," Demetriades said. "What we can do though, is to make sure that appropriate steps are taken - if nobody else does that, we shall do it - to bring water, even after six or eight months, to Nicosia - desalinated water."

This way, "during the summer period, the authorities who supply the water to Cyprus will feel less nervous about giving more water" to Nicosia if they know the mayors are going to be able to provide desalinated water to the government water system for the rest of the year. "That's the whole scope of the exercise," he said.

"We cannot work miracles. But what we can do, I think, is to make sure ourselves that this additional quantity of water will reach Nicosia sometime after eight months," he said.

Demetriades said he had heard of the June 1997 Caramondani offer, but "we do not know the details. We knew there was such an offer... That has to do with the government, not with us."

The Cyprus Mail has learned the Caramondani offer is one of several alternatives the mayors are considering to provide the desalinated water they plan to add to the state system to offset a larger allocation to Nicosia this summer. Mooring desalination ships offshore and using bore- holes are two other alternatives they are considering.

Demetriades said the mayors let Anastassiades know "it was not a very bright idea to stop the executive from setting up the desalination plant at Zakaki."

Yielding to political pressure, the House of Representatives killed a bill that would have funded the Zakaki plant the government had hoped would be on-line by late August. Similar pressure killed a desalting plant planned for Ayios Theodoros. And court suits by Larnaca Mayor George Lycourgos threaten to stall or halt construction of the Larnaca desalination plant.

Wednesday, March 8, 2000

[04] Four settlers deported after influx from the north

THE GOVERNMENT said yesterday that four of the recent arrivals from the north had been deported after it had been determined they were Turkish settlers, not Cypriots.

Spokesman Michalis Papapetrou said that in the past six months since the influx began, four people had been found to be Turkish settlers and had since been deported.

Between 200 and 250 people, mostly families, have crossed at various points along the island's 180km long buffer zone. The majority are Turkish Cypriots, Papapetrou confirmed.

Papapetrou dismissed claims by Turkish Cypriot leader Rauf Denktash that the government did not know how to handle the situation. On Monday, after his meeting with UN envoy Alvaro de Soto, Denktash accused the Greek Cypriot side of enticing the Turkish Cypriots and then pushing them aside. Papapetrou said Denktash's claims were ridiculous.

"He is trying to justify the unjustifiable, that the so-called paradise in the occupied areas leads these people to cross minefields in order to secure a better future for their children," Papapetrou said.

"Denktash displayed cynicism once more and acted in an offensive manner in front of the UN Secretary-general's special Cyprus envoy."

Papapetrou said that settlers married to Turkish Cypriots would be deported only if it could be established the marriage was one of convenience.

There are three cases of non-Cypriot women married to Turkish Cypriots, which the authorities are looking at, Papapetrou said.

One of the women was born in Turkey, one in the north of settler parents and the third is a Romanian national.

He said it was unlikely these women would be deported unless their marriage was proved to be a sham or unless they were a threat to national security.

The government is handling the issue on the basis of principle, and claims that it has no policy are unfounded, Papapetrou said.

Commenting on Denktash's statement that any Greek Cypriots who recognised his breakaway regime in the north were welcome to return to the occupied areas, Papapetrou said the government recognised the freedom of movement of all people.

"We regard these procedures that Denktash is attempting to apply to gain recognition of this regime as blatant blackmail," he said.

Meanwhile, Justice Minister Nicos Koshis said yesterday the majority of those who had crossed were gypsies. "At this moment we don't have exact figures, but I estimate it at less than 200 people over the last six months, " he said.

The majority of those who cross head for Paphos. This has caused a backlash among the local population, already angry at the number of Pontian Greeks who have flocked there in recent years.

Paphos deputies have been outspoken about the Turkish Cypriot influx to the area and say they are concerned at the socio-economic impact on the town.

New Horizons leader Nicos Koutsou said yesterday the influx of Turkish Cypriots was a "burning issue" and had to be sorted out.

Wednesday, March 8, 2000

[05] Banks bring share index tumbling down

STOCKS came under the hammer again yesterday as banks tumbled, dragging down the benchmark index 3.6 per cent in a volatile session which saw the market down by almost five per cent at one point.

Laiki shares trading ex-rights from yesterday sent the banking index spiralling down 5.3 per cent.

The adjustment means that as of yesterday, shareholders buying the stock would not have a right to acquire stock in Laiki Investments, the Laiki subsidiary which is being spun off by the bank for future flotation on the exchange.

The technical adjustment was not however priced in by the CSE, since Laiki Investments has not yet been approved for entry to the bourse. In other cases, the adjustment would have been priced into the banking sector index and the decline would have been less pronounced.

Laiki are due to announce their 1999 earnings this morning, while market players said they also expected some unspecified "surprises" from chairman Kikis Lazarides.

"The results themselves, however exceptional they may be, have already been priced into the share price," said Suphire Stockbrokers' Yiannos Andronikou.

Laiki were off £1.57 to £13.45, while the descent also affected Bank of Cyprus stock, which lost 16 cents to a last trade of £9.11.

The all-share index was down 21.57 points to 572.70 on a turnover of £20.03 million, about eight million less than on Monday.

The market openedsome 30 points less than Monday and fell to an intraday low of 565.66 points, climbed to a high of 579.11 before trimming back the gains to 572. There were 3310 deals, slightly lower than Monday's 3480.

A cash squeeze from millions drained out of the market was still stifling the bourse. Traders said there was also poor sentiment from investors who have either seen their savings sitting idle withthe 40-odd companies in the bourse waiting room or got burnt after entering the market before the current corrective cycle began in December.

Rumours have also surfaced once more of a bear play on the market by traders issuing sell signals for investment firms to snap up shares on the cheap.

Brokers are divided on the issue, with one camp maintaining that it is happening and the other denying that anyone is influential enough to trigger a decline.

Another trader said that the market was also influenced by a poor showing of the Athens Stock Exchange; that market fell 3.12 per cent yesterday on fears of a cut in a key 14-day deposit rate after February inflation spiked 2.9 per cent on the back of a surge in world oil prices.

"Investors are keeping an eye on Sophocleous (Athens) because of the Bank of Cyprus plans. Things in Greece and Cyprus might look a bit rough at the moment but people who have patience and invest in selected stocks will get good returns this year," a fund manager active in both countries said.

* Euroinvestment and Finance said yesterday its pre-tax returns surged 415 per cent to £3.5 million on the back of a wider capital base and yields from investments on the stock exchange, it said.

Euroinvestment's 1999 results show a £3.5 million pre-tax profit, from a £686,000 profit in 1998. Earnings per share rose 896 per cent to 23.81 cents. Euroinvestment and Finance is 45 per cent ownedby Greece's Pireaus Bank.

* Shimoda Resources Limited, the only foreign company registered on the CSE, has fired off an angry letter of complaint to the bourse over the disappearance of the company from data feeds.

"If you really want to attract foreign companies to your exchange, don't treat them like rubbish," said Shimoda's chief investment officer David Mapley in an e-mail to bourse general manager Nondas Metaxas.

Mapley has repeatedly complained that Shimoda's code is nowhere to be seen on the stock exchange screens, nor in the daily stock market report it issues.

He was in Cyprus two weeks ago where he was given assurances the matter was being actively pursued. However, his queries on the matter since then have apparently hit a brick wall.

"My company fires people who don't pass messages in a dealing environment... you people don't even respond," Mapley said.

London-based Shimoda, which invests in commodity licences in East Europe and Russia, became the first offshore company to list on the bourse last December.

* Cyprus's front-runner status among European Union candidates for membership has helped offset concerns about continuing fiscal reform delays and keeps the outlook stable on the Republic's A2/P-1 ratings, Moody's have said in a recent review of the economy.

Nevertheless, Moody's analysts caution that the Cyprus economy is more vulnerable to external or domestic shocks given the current size of the fiscal and current account imbalances and say that lack of timely economic reform could put ratings under pressure.

"They attach great significance to the expectation of fundamental economic reform saying the absence of such action could exert downward pressure on the ratings," Moody's said in a news release.

Moody's has not changed the A2 rating of Cyprus since it was first assigned in 1996. It said a significant deterioration in the fiscal and external finances in recent years was not consistent with the country's aspirations to join the EU, or the single currency.

The government deficit as a percentage of gross domestic product rose to 5.5 per cent last year, but it is forecast to fall to 5.3 per cent of GDP this year after some taxation measures passed by parliament in November.

The gap still falls short of single currency criteria for a deficit of three per cent and less; general government debt was an estimated 61 per cent of GDP at the end of 1999, also higher than the guidelines set by Brussels.

A divisive legislative environment has postponed adequate resolution of the wide fiscal imbalances, and with elections due by May 2001, the delay threatens to continue for at least another budget cycle, the Moody's report said.

However, the agency said political motivation to meet the EU's economic stability targets was expected to spur needed adjustments as the time of accession approaches.

Constraints on Cyprus's ratings include declining industrial competitiveness, partly due to tight labour market rigidities. The banking system with its high non-performing assets and leverage represents another vulnerability as capital and credit controls are liberalised, although asset quality concerns are partly mitigated by good collateral coverage, said the agency.

Wednesday, March 8, 2000

[06] Disy rounds on Akel over 1974 weapons claim

MAIN opposition party Akel used its connections with the Russian secret services (KGB) to import weapons from the Soviet Union in the run-up to the 1974 coup, the CyBC has claimed, sparking a major political row.

The government yesterday said it would be looking into the reports, while ruling Disy tried to up the ante by claiming Akel had maintained close links with the KGB right up until 1992.

The opposition party did not deny the reports, but insisted it had acted with the government's blessing.

On Monday night, CyBC television reported that Akel had used its ties with the Soviet Communist party to get the KGB to send some 100 Walther pistols and 25,000 bullets to Cyprus in early July 1974. The CyBC cited confidential KGB documents as its source for the story. The weapons were to be used for the personal security of the Akel leadership and government officials, the CyBC reported.

The weapons were apparently brought in just days before Greek right-wing extremists led a coup against Archbishop Makarios, and at a time when tensions between right and left wing elements on the island were boiling over into violence.

Akel parliamentary spokesman Andreas Christou was quick to respond by saying his party had never denied "discreetly" contributing to the arming of the police and Makarios' personal guard.

But he dodged further probing on the issue by insisting party records from the time had been lost and the protagonists in any weapons deals were long dead.

Akel deputy Costas Papacostas, who served in Makarios' guard in 1974, yesterday said the weapons had been brought in with the Archbishop’s blessing.

The gist of Papacostas' argument was that the UN was blocking weapons purchases, but Makarios needed protection so Akel had used its influence to secure weaponry from Moscow.

"The government could not officially bring weapons... so it tried through known friends and groups to use people with connections to bring certain weapons," the Akel man said.

Papacostas said he had been supplied with a Walther revolver in July 1974. He said he did not know if this had been one of the weapons referred to by the CyBC and insisted he had been given it "through the proper channels."

Akel usually uses the coup as a stick to beat ruling Disy with, claiming the right-wing party is harbouring coupists in its midst. Disy leader Nicos Anastassiades was not about to turn down a chance to turn the tables on Akel yesterday.

He said his party would be looking into Akel's links to the KGB. "There is information that the KGB did not just contribute weapons (to Akel) but other materials too, right up to 1992," Anastassiades said.

Government Spokesman Michalis Papapetrou said he knew nothing more about the issue than what he had heard on the CyBC.

"I am not briefed on the issue, I cannot comment but it will, of course, be an issue for investigation," he told his daily news briefing.

Papapetrou also said the reports raised serious questions.

"There is a serious complaint that a party was importing weapons," he stated.

Wednesday, March 8, 2000

[07] Attorney-general blocks Igoumenides appointment

The ruling barring the appointment brings into question the secondment of some 400 other teachers to service in various ministries.

Government Spokesman Michalis Papapetrou's decision to transfer Igoumenides met with a storm of protest from governing Disy. Many within Disy see the teacher as a dangerous "outsider" whose Cyprus problem views do not match those of the government.

Papapetrou - who belongs to junior government partners the United Democrats (UD) - has angrily defended his choice of aide, insisting that those attacking Igoumenides were actually trying to take a sideways swipe at President Clerides' policies.

But the Spokesman has been undone by a ruling by the Attorney-general's office. The ruling, released yesterday, states that teachers can only be seconded to the Education Ministry, the Church or the Cyprus University.

The Attorney-general's office was asked to rule on Igoumenides' secondment after Education Minister Ouranios Ioannides protested that he should have had a say in the matter.

On Monday, Papapetrou reacted to the call for a ruling by insisting that if Igoumenides could not be seconded then the same went for the dozens of other teachers already working in government services.

Yesterday, the Spokesman repeated this line, telling his daily news briefing that the law had to be applied evenly.

Igoumenides himself said the issue should now be considered "closed." In a letter sent to Clerides, and read out by Papapetrou yesterday, Igoumenides apologises for the "trouble" his proposed secondment caused the President and the Spokesman.

He also repeats his support for Clerides' Cyprus problem policies.

Disy leader Nicos Anastassiades - who had criticised Papapetrou's choice of Igoumenides - yesterday denied suggestions his party had pulled strings to get the teacher's appointment blocked.

Wednesday, March 8, 2000

[08] ‘Witch cast spells to retrieve errant partners’

POLICE are investigating an 89-year-old Nicosia woman accused of witchcraft.

According to police information, the woman allegedly used sorcery to `win' back for her clients their male partners who had gone astray.

She only received women who were experiencing problems in their relationships.

Reports say many paid her the £100 she was seeking to cast her spells and secure the return of their wayward partners.

For more complex cases, the woman charged higher fees accordingly.

There was no information on how long the woman had allegedly been practising sorcery, but the case came to the attention of police after one of her clients, who had – in vain - paid hundreds of pounds for the return of her estranged husband, reported the ‘witch’.

Police yesterday told the Cyprus Mail they had placed the woman's house under surveillance as soon as they received the complaint.

When they got the intelligence they needed, police moved in with a warrant and reportedly caught the elderly woman red-handed.

A search found enough evidence for her arrest, but she was let off because of her age.

Police, however, said they were looking into the case further since the evidence found indicated witchcraft was being carried out.

The woman denied practising sorcery, saying she did not need to do such things as she was related to a millionaire in Lebanon.

© Copyright Cyprus Mail 2000

Wednesday, March 8, 2000

[09] Electricity prices to come down

Responding to reports that electricity bills would rise, EAC director general Costas Ioannou said that in fact they would be coming down under a proposal expected to go before the House of Representatives this month.

A bill has already been drawn up between the Commerce Ministry and the EAC, he said.

"Domestic consumers will have a reduction, not an increase, in the order of six per cent," Ioannou said.

He added that other rates of reductions from four to six per cent per cent would apply for small and medium industries.

"All efforts we make are for reductions not increases," Ioannou said. "We hope this bill will be approved by the House this month".

He said the current high prices and large bills being experienced by consumers were due to increased consumption for the winter period, the unfavourable exchange rate between the dollar and the Cyprus pound, and the high price of crude oil on the international market.

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