THE GOVERNMENT yesterday chose to dismiss Richard Holbrooke's warning that the US would abandon Cyprus settlement efforts if there was no progress soon.
Before leaving the island on Sunday morning, the US envoy stated the US would "reconsider" its role in helping solve the Cyprus problem if his next mission here in May failed to achieve any progress.
But Government spokesman Christos Stylianides said the government did not believe Holbrooke's warning. "We believe US interest will continue till a just and viable settlement is achieved," he told his daily press briefing.
While declining to comment directly on Holbrooke's statements, Stylianides said the government believed the Eastern Mediterranean area was "significant" for US interests.
Holbrooke had left little room for doubt with his statements.
"I want to be very frank, when we come back in a month we will look for evidence of a real desire to move forward, otherwise there's no point in continuing this kind of shuttle diplomacy until it becomes empty and sterile," he said.
On Saturday the envoy described his two days of talks with President Clerides and Turkish Cypriot leader Rauf Denktash -- aimed at kick-starting stalled settlement talks -- as "successful and inconclusive."
"We are not doing this for our health, beautiful as Cyprus is... we're not going to be part of a theatre without meaning," Holbrooke said on Sunday.
He said his May contacts would be "very important, possibly decisive in allowing the US to determine what it's role is going to be: are we going to be heavily engaged or are we going to back off? That depends on the parties."
"The US is not going to spend the rest of the century wandering around trying to create a settlement," he said. Holbrooke is expected back on the island around May 1.
"If the two sides don't want an agreement no-one can force them, the US is not going to dictate terms to the communities in Cyprus, the US isn't going to force an agreement down Turkey or Greece's throat," he said.
Both sides had to be willing to shift their positions if an "arrangement, not quite a marriage but an arrangement, a federation," was to be agreed, Holbrooke said.
"If one side or the other doesn't want to move, there's nothing you can do to force them, nothing," the envoy said.
"The use of force is out of the question, we don't want a return to what happened in 1974, which we think was terrible," he said, referring to the Turkish invasion.
Settlement talks have been deadlocked for months, with Denktash refusing to return to the negotiating table unless the EU reverses its decision to begin accession talks with the government. The EU talks kicked off in Brussels last week.
Holbrooke criticised the EU's decision to open entry talks with Cyprus while closing the door on Turkey, saying it did not help settlement efforts.
"The EU made two decisions in Luxembourg on December 13. One was to invite Cyprus to begin talks to join the EU -- we think that was a good decision; the other was not to start a process with Turkey -- we think that was a mistake. I don't see how Cyprus can move forward without Turkey's support," he said.
The response to Holbrooke's statements from party leaders was less measured than the government's.
Diko leader and House president Spyros Kyprianou described the statements as a "provocation for all of Hellenism".
"It was an ultimatum, supposedly to both sides, but in my opinion it is directed mainly to our side," Kyprianou said.
"For 24 years the US has been working to close the Cyprus issue in a way that would not displease Turkey, to put it mildly," he said.
Kyprianou attacked Holbrooke's statements concerning the EU. "It is clear from the statements that the first priority for the US is to satisfy Turkey concerning relations with Europe," he said.
Vassos Lyssarides, leader of socialist Edek, described Holbrooke's statements as "non-serious" and "disappointing".
"All this talk about terminating the initiative cannot be taken seriously. There are US interests here that dictate US involvement on the issue," he said.
He said Holbrooke's mission could be taken over by another US envoy if Holbrooke was unwilling to continue.
"If it is not Mr Holbrooke it will be someone else, but the US interest cannot be terminated because it is in their interests," Lyssarides said.
He too criticised Holbrooke's EU statements. "It was a lapse of Mr Holbrooke's to try to tell the EU what to do," he said.
US Ambassador Kenneth Brill was cautious when asked to comment on his compatriot's statements yesterday.
"Richard Holbrooke is a very articulate spokesman for himself and there is no benefit for outsiders to try to be helpful," Brill said.
ORGANISERS yesterday cancelled an Easter pilgrimage to the occupied Apostolos Andreas monastery after the Turkish side refused to back down over the entry fees it planned to charge pilgrims.
More than 1,000 Greek Cypriots were scheduled to make the trip on Easter Sunday, April 19, but the Denktash regime insisted the pilgrims each pay a levy of £15 sterling to cross, something the Humanitarian Affairs Office deemed "unacceptable".
The Ledra Palace crossing fees were introduced by the Turkish Cypriot side in January in retaliation for a British decision to impose a visa requirement on Turkish Cypriots.
The cancellation will not, however, affect a parallel pilgrimage by Turkish Cypriots to the free areas this week, though they will face a £4 Sterling `exit fee' on leaving the occupied areas.
More than 1,000 Turkish Cypriots are expected to travel to the Tekke mosque in Larnaca for the Muslim festival of Eid al-Adha on Thursday.
Humanitarian Affairs Commissioner Takis Christopoulos told the Cyprus Mail yesterday that the new charge was unacceptable, but added that if the Turks backed down on the matter, another visit would be arranged.
But this looks unlikely, as United Nations spokesman Waldemar Rokoszewski said yesterday the UN had already tried and failed to convince the Turkish side to give up the charge scheme.
He described the situation as "regrettable".
On Saturday, visiting US envoy Richard Holbrooke said the issue of the crossing charges "troubles me a lot... I think the movement should be free across the line. This is just wrong."
THE WRITING is not on the wall for Spyros Kyprianou as leader of the Diko party, Kyprianou himself said yesterday.
Kyprianou was commenting on rumours, rife ever since the centre-right party backed the loser in February's presidential elections, that the party base were after a change in leadership.
"I have noticed no such thing, in fact I have noticed the exact opposite," he said yesterday, summarising what he saw as the feeling to come out of a party conference over the weekend.
But party member Loris Tryfonos, speaking earlier in the day, said the opposite.
"Many party members have made their position clear. And these stated positions make it clear that everyone is worried and wants renewal and change," Tryfonos said in an interview with Cyprus Broadcasting Corporation (CyBC) radio.
Kyprianou dismissed those seeking change as a fringe element. "Some, a small minority, may wish this (new leadership), and some of this small number show it and some don't," he said.
"I never had the desire to remain leader of the party permanently, till I reach the age of 80, this won't happen," the 66-year-old politician said.
"But if my presence is needed I have a duty as founder of the party and as someone who spawned Diko and believes in its mission to stay as leader," he said.
Kyprianou has been Diko chief since the party was founded in 1976.
Tryfonos referred to the weekend conference as a waste of time, saying the party faithful were keen to have leadership elections now.
"The overwhelming majority of our members wanted and want an electoral conference," he said.
"Our members are worried about the party, they want renewal. They want to hear (positions) and then be allowed to vote for a leadership accordingly. They do not want conferences and time-wasting," he said.
Diko has been tearing itself apart ever since the run-up to the presidential elections.
High-profile Diko members unhappy with the official party decision to back the candidacy of former Foreign Minister George Iacovou broke ranks. Most of them then backed the candidacy of Diko deputy Alexis Galanos.
Galanos and his supporters were turfed out of the party in the aftermath of Iacovou's defeat in the elections. Galanos subsequently proclaimed he was to establish his own party.
Kyprianou yesterday dismissed suggestions the Galanos supporters were "behind" moves to have him ousted as party leader.
THE GOVERNMENT yesterday rejected an Akel proposal for additional tax discounts, saying they ran against the philosophy of the tax system, deprived the state of funds and would lead to more demands.
Akel's bill would introduce a £1,200 tax discount for parents of children with special needs. It would also lower the age threshold for tax discounts on pensions from 65 to 63.
The Inland Revenue Department estimates that the first measure would mean a loss of state revenue of some £300,000. The state coffers face a shortfall of £1.5 million if the pension amendment was approved.
It is also concerned about the technical difficulties -- having to change the way of calculating tax and print new tax forms only two years after a massive overhaul of the tax system was approved by the House of Representatives.
For the government and several deputies on the House Finance Committee, the issue was not so much the amount of money involved but the whole philosophy of keeping the tax system apart from the state's social policy.
The Ministry's Andreas Christou was explicit. He said the tax reform had modernised and simplified the system by removing discounts and tax credits. Social groups received benefits as a matter of government policy, not through the income tax law.
In view of the fiscal situation, neither of the two proposals was justified, he said. And the 1996 tax overhaul had in any case led to benefits of £40 million to middle and lower income families, he added.
The government was also concerned that approval of the two measures would open the floodgates to pressure from other organised groups, whose tax discount had been scrapped as part of the overhaul. Lowering the age threshold for pensioners would only prompt demands from public servants and bank employees for a further reduction to 60 years.
But Akel's Avraam Antoniou, who tabled the bill, disagreed, saying many countries exercised social policy through the tax system. The issue remains before the committee.
Mike Strong, a technician for the Akrotiri Bases, was asleep in his flat in Yermasoyia when he was suddenly engulfed in flames.
Neighbours called the police and Strong was taken to hospital where he was kept in with breathing problems. Police said they had no idea what had caused the fire. Damage was estimated at £5,000.
Police were also yesterday searching for suspected arsonists who struck in Larnaca on Sunday night.
At around 4.30 am, residents of a block of flats on Ammohostos Street noticed a fire in a second floor flat belonging to Michaelis 'Tito' Christodoulou, 43. Fire-fighters managed to bring the blaze under control, but not before the hallway and one of the bedrooms had been gutted with extensive damage to property.
The fire appears to have been set at three points on the floor in order to spread rapidly across the fitted carpets.
Christodoulou, a nightclub flower-seller, was not at home at the time of the attack; his car tyres had also recently been slashed.
Another case of suspected arson was reported yesterday in the Limassol area, after a fire at the 12th Limassol Primary School. The fire broke out at around midday in the staff room, damaging curtains and sports equipment to the cost of approximately £550.
Police said burnt matches had been found in the staff room.
Dimitris Polycarpou, alias Sakkos, 26, from Trachoni, Avraam Constantinou, 29, from Sotira, Charalambos Martis, 22, from Frenaros and Antonis Loizou, alias Sirinas, 21, from Limassol, were brought up before the Famagusta District Court in Larnaca yesterday.
The four were arrested on March 19 after a brawl in the Kokkinochoria area, Famagusta. The court heard that Sakkos and Sirinas had attacked Constantinou and Martis because they had failed to come up with payment for drugs.
Constantinou and Martis received ten-and-a-half kilos of hashish from the other two suspects in the days preceding the incident, the court heard.
Constantinou and Martis had agreed to pay £5,000 for the drugs but never did, the court heard. So Sakkos and Sirinas went looking for Constantinou and Martis armed with a Zastava automatic, knives and clubs, the court heard.
Police intervened to stop the ensuing brawl and arrested all four men involved.
All four suspects were yesterday charged with conspiring to commit a crime by trading in illegal substances. Constantinou and Sirinas were also charged with conspiring to buy drugs from the other two suspects, while Constantinou was also charged with illegal possession of a Zastava automatic.
The case was referred to the Assizes court for April 30. The suspects were remanded in custody till then.
With collective agreements coming up for renewal, bosses say the industry is in recession and they cannot afford the £1.25 increase in basic wages that construction site workers want for next year. Workers' unions say builders are not highly-paid and have already foregone wage increases for the sake of the health of the industry.
"The £1.25 unions want is the drop that will make the cup overflow," the chairman of the Building Contractors' Association, Dimitris Sampson, said yesterday.
"We have asked the union side to give us a year's breathing space, we did not ask for a long-term freeze on wage increases," he said.
"Our employees already get CoLA and they got an increase at the start of the year. What we are asking is that next year we give our industry a chance to breath so that we do not drive it to the same stage other industries have got to and are already destroyed," Sampson said.
For the union side, Peo representative Michalis Papanicolaou said the £1.25 basic wage increase was not what was going to make or break the industry.
"We say the industry cannot be saved by workers not getting the £1.25 basic increase," he said.
"In the last four years builders, because of the recession, have foregone most of the agreed increases, the employers acknowledge this. So what we are basically asking for this year is that we cover a part of the increases we never received," Papanicolaou said, adding that builders were not highly- paid.
"Let us solve the financial part of collective agreements and than see how we can work together to solve the problems in the industry," he concluded.
A mass of about 200 fans began stoning and assaulting rival spectators and police at the end of a goalless Omonia-Apoel derby at the Makarion stadium, police reported.
Police said many fans were injured and extensive damage was caused to cars parked outside the ground and to the stadium itself.
This is the second consecutive weekend of soccer violence. Serious incidents and arrests followed a cup semi-final match in Paphos last Saturday.
Police have threatened to stop providing cover for matches unless clubs themselves do more to deter the hooligan element.
Its president Dinos Papadopoulos told the House Finance Committee the stock market -- which opened officially in 1996 -- needed "depth and width".
"The bill will give incentives and help important companies overcome their fears or unwillingness to come on to the market while the cost to public finances will be minimal."
Also before the House Finance Committee yesterday was a bill by United Democrats president George Vassiliou with a package of proposals, many of them technical, to simplify the income tax law, particularly as regards companies.
Government officials said many of the proposals had been discussed with auditors -- with consensus reached on some of them. They promised to come back with the government's positions on the bill within a month.