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Cyprus Mail: News Articles in English, 98-05-29
From: The Cyprus Mail at <http://www.cynews.com/>
Friday, May 29, 1998
 House rejects taxes packageBy Hamza Hendawi, Business Editor
THE GOVERNMENT of President Glafcos Clerides was dealt a humiliating defeat last night when deputies voted down proposals for biting tax hikes designed to reduce a spiralling fiscal deficit and replenish state coffers.
The defeat was particularly embarrassing for the government since deputies from junior coalition partners - Socialist Edek and the United Democrats - joined the opposition in rejecting the proposals, leaving President Clerides' Disy party alone in supporting the tax increases.
Last night's vote - 32 against, 17 for and one abstention - also handed Finance Minister Christodoulos Christodoulou a personal defeat that might in the long run prove costly to his career and raise serious questions about his political judgment.
"The government is trying to solve the economic crisis by shoving its hands deeper into the pockets of the poor," declared Demetris Christofias, leader of the Communist Akel party which voted against the proposals.
"We will vote against this to help the honourable minister keep his promise, " said Akel deputy Kikis Kazamias. He was referring to a pledge not to increase taxes made in the run-up to last February's presidential elections.
A Disy stalwart and a close confidant of President Clerides, Christodoulou is the architect of the proposals, adopted by an emergency cabinet session yesterday morning. Five of the cabinet's 11 ministers were abroad, leaving only six attending.
Christodoulou had made no secret over the past few weeks that he was putting together a package of measures aimed at reducing the deficit, currently running at five per cent of GDP but expected to hit seven per cent by the end of 1998 if nothing is done to arrest its growth.
Sensing a certain defeat and the need for immediate damage -limitation, Disy leader Nicos Anastassiades returned to the podium shortly before last night's vote to tell deputies that Christodoulou had pledged to him more consultation with coalition parties in the future.
"It's not nice to be disliked," said the Disy leader in acknowledgement of the unpopularity of the package. "But it is better to be responsible. Today, we don't want applause."
Christodoulou submitted to the House a five-part package of tax hikes. A brief plenary session earlier yesterday evening decided to refer them to the Finance Committee for discussion, but ordered it to debate immediately and report back to the House on one part of the package.
The part discussed yesterday proposed increases in the price of fuel and cigarettes, and duties on the imports of second-hard cars and all-terrain vehicles. It was designed to bring the treasury ?25.3 this year and ?44.5 million annually thereafter.
The proposal was later debated by the house for more than two hours until 9.30pm when a vote threw it out.
Another proposal voted down was tabled by Tassos Papadopoulos of the opposition Diko party suggesting that the house adopt the part discussed by the Finance Committee for one month only, to allow adequate time for debate before a final vote is taken.
The four other parts of the package, according to a government document distributed at the House, feature an increase in value added tax to 12 per cent from eight per cent, and the introduction of a five per cent VAT on goods and services which are currently exempt. They also include the return from July 1999 of a three per cent tax to services offered at public establishments certified by the Cyprus Tourism Organisation and the removal of duty exemptions currently enjoyed by some semi-governmental organisations.
Also in the package is a 35 per cent increase, effective January 1999, in charges for vehicle registration and a ?5 monthly tax on mobile phones.
The government document said that, if adopted, the proposals would leave the fiscal deficit at 5.00-5.5 per cent this year, reduce it to 3.5-4.00 per cent in 1999, and to three per cent in 2000.
"It is time to increase income, reducing deficit to give convincing proof to the European Union that the course of accession is being followed with practical measures," Christodoulou told the Finance Committee. Accession talks between Cyprus and the EU began in March.
There have been no new taxes since 1993, he argued.
The minister, who looked distinctly uneasy during most of last night's proceedings, later tried to take the defeat in his stride and even put a brave face on it.
Describing references by deputies to the election promise on taxes as a "simplification", he was quoted by the Cyprus News Agency as saying: "The essence of the question is whether or not there is a need for more revenue in order to continue government policy."
The island's economy is healthy, he said, and the fiscal deficit was not the only criterion on which it should be judged.
 House approval of privatisation will be an uphill taskBy Andrea Sophocleous
CURRENT delays in plans to upgrade Larnaca and Paphos airports will only be exacerbated by the cabinet's decision to hand over the management of the airports to private investors, the House Watchdog Committee for Public Expenditure heard yesterday.
And deputies warned that the delays and increased costs could all be in vain, as the House of Representatives would contest the cabinet's bill for part privatisation of the airports.
The Watchdog Committee heard last week that delays in planning for construction at Larnaca airport were adding a million pounds a month to the final price tag, and that recent estimates now set the final cost at ?161 million pounds ? up from an initial 1991 estimate of ?85 million.
Deputies expressed concern at yesterday's meeting that the cabinet's partial privatisation plans would aggravate the delays, and asked Communication and Works Minister Leontios Ieodiaconou, who attended the meeting, if their fears were justified.
Ierodiaconou admitted new delays were "possible"; they were, he said, likely to arise while the partial privatisation bill was being prepared and in waiting for the House to approve it ? a process which would take a total of approximately six months.
Delays are also likely to arise while the government sets up a state-run company to handle the selling of shares in the airports.
When committee chairman Christos Pourgourides of Disy insisted that the bill would not be passed so easily by the House, predicting "political battles and clashes" over the issue, the minister was forced to admit the cabinet did not have a back-up plan in the event of a House rejection of the bill.
Deputies calculated that if it took a minimum of six months for the House to debate the bill, on top of the six months it would take for the government to draw up the bill, then this would add another ?12 million pounds to the cost of upgrading the airports.
But the Minister cast doubt on the figure of a million pounds a month lost as a result of delays, saying currency fluctuations made it impossible to quantify the costs. He did not, however, give a figure of his own for the losses.
Diko deputy Nicos Cleanthous, who had initially tabled the issue of the delays, repeated yesterday that the airport problem was one of management and funding, and that the Communication and Works Ministry kept making changes to the plans without considering where the money was going to come from.
He was backed by the chairman when he insisted that the Watchdog Committee be kept constantly informed of developments.
In explaining the cabinet's plans, Ierodiaconou confirmed that the government would to a large extent continue to own the airports, and that the private investor would merely run them. He pointed out that there was a distinction between ownership and management.
The private investor will sign a five year renewable contract and will not be able to set prices.
Questioned by deputies if the cabinet had considered the possibility of not finding an investor, the minister confidently dismissed such reservations. He said there were companies whose job it was to run airports and it would not be difficult to find one interested in running the island's two airports.
Ierodiaconou has justified the cabinet's move to partial privatisation by arguing that handing over management of the airports to the private sector will make them more efficient and competitive.
Disy deputy Prodromos Prodromou gave voice to current speculation, when he asked the minister if the airports' partial privatisation was part of a wider government privatisation plan.
Ierodiaconou replied that for the moment his ministry was considering the partial privatisation of marinas, but would not address the broader picture.
 Defence Ministry backs up spy claimBy Charlie Charalambous
THE DEFENCE Ministry yesterday stood by its claims that British helicopters were warned off as they flew suspiciously low over a sensitive National Guard installation.
The incident reportedly took place last Saturday in the Zygi area of Limassol, when two flares were directed at two bases helicopters thought to be "spying" on an army facility.
But the British firmly deny the claim.
"There was no such episode. No aircraft were airborne from the British bases on the Saturday in question," bases spokesman Mervyn Wynne Jones told the Cyprus Mail yesterday.
Defence Minister Yiannakis Omirou has, however, given credence to the report on the incident published on the front page of Agon yesterday, confirming that a confrontation did take place.
"It is a fact that an episode between the National Guard and British helicopters happened in the Zygi area. I cannot reveal any further details about the episode for reasons of security," Omirou said.
It is understood President Clerides has been informed of the incident and a strong worded protest will be delivered to the British authorities.
According to defence sources quoted by Agon, two helicopters were spotted making suspicious movements and photographing National Guard positions.
Two warning flares were launched in their direction and strict orders were given to "act decisively" if the helicopters remained in the area.
Deterred by the flares, the helicopters flew away in the direction of Akrotiri British base, the report said.
The bases nevertheless remain adamant that no such incident took place.
"I have no recollection of any flare ever being fired at any British helicopter in Cyprus," said Wynne Jones.
 Police launch traffic safety campaignBy Andrea Sophocleous
THE POLICE has launched a plan to reduce the number of traffic accidents on the island through the introduction of tougher regulations, including a doubling of the fine for not wearing a seat belt.
Police chief Panikos Hadjiloizou announced yesterday that police would soon enforce measures designed to reduce traffic accidents by 10 per cent.
Speaking at a press conference outlining the new measures, Hadjiloizou began by pointing out that six people had died in fatal accidents last week alone.
He stressed that there has been an increase in road deaths in recent years; this year there have been 38 fatal accidents with 43 deaths, whereas in the same period last year there had been just 28 fatal accidents in which 34 people were killed.
He added that there had been over 60,000 recorded traffic offenses this year.
New measures to be enforced in the latest crackdown on traffic offenders include an increase in the fine for not using helmets and seat belts, and for unnecessary pollution and noise from exhausts.
Other road safety measures being considered for Parliamentary approval include a points system for drivers' licences, toughening helmet regulations and expanding them to apply to bicycle riders, and ensuring unhindered steering by cracking down on the use of mobile phones at the wheel.
The police is also considering measures that have proved effective overseas, such as speed and red light cameras, lowering the drink-drive limit, compulsory use of tachometers in lorries and buses that would prevent them from exceeding the speed limit, banning those who have been driving for less than three years from driving motorcycles of 500cc and above, and an increase of on-the-spot fines for traffic offences from ?50 to ?100 pounds.
The police chief also announced that from today the police traffic division would increase by 30 personnel, and the ranks of traffic headquarters in Nicosia would be swollen by an additional 40 personnel. These will come from the ranks of political bodyguards whose numbers were recently reduced by the government.
Traffic Division chief George Voudnos added that "this increase in personnel gives us the opportunity to plan and enforce a new, more effective, system of traffic rules."
 Court frees Turkish asylum seekerA TURK arrested after he walked over from the occupied areas on Sunday was yesterday given his freedom by Famagusta District Court.
Presiding judge Tefkros Economou said it was obvious 35-year-old
Abdul Kantir Dogan was fleeing persecution in Turkey. Dogan, who pleaded guilty to entering Cyprus via an illegal port in the north, claimed he faced imprisonment in Turkey for his communist beliefs.
Dogan told the court yesterday that he had been visited in police custody by a Turkish officer. The officer, accompanied by an Unficyp officer, told him that he would be jailed for ten years when he returned to Turkey unless he withdrew his claims that he faced persecution in his homeland, Dogan stated.
Dogan crossed the dividing line near Strovilia in the Dhekelia area on Sunday afternoon and then walked into a Greek Cypriot home. He was offered coffee and candied fruit at the home, and then he asked to use the phone so he could call police to come and pick him up, the court has heard.
Dogan said he wished to seek political asylum and stay in the government- controlled areas to start a new life.
The judge did not impose any sentence for illegal entry.
 English School deadlock as Board rejects proposalTHE CRISIS at the English School remained deadlocked yesterday after staff and the school board failed to agree on a proposal to end the dispute at the elite Nicosia school.
At a meeting on Wednesday, the Parents Association and the English School Old Boys and Girls Association (Esobga) proposed that controversial headmaster Thomas Thomas leave his post in August, and an acting headmaster be appointed in his stead until a new official head could be appointed for September 1999.
Staff union Essa accepted the proposal, but the board rejected it, and the negotiations are at a deadlock.
Essa is calling for Thomas' removal over allegations of favouritism in the promotion of a female member of staff, and what they describe as his "autocratic" style of management.
Esobga told the Cyprus Mail yesterday that the negotiation process was expected to continue on Monday.
 Turkish ships prepare for Sea Wolf 98TURKISH warships left port on Wednesday for naval exercises codenamed Sea Wolf 98, Turkish press reports said yesterday. During the exercises, the ships involved are expected to call at ports in the occupied areas.
The exercises, which are due to take place from June 3 to June 26, will take place in international waters in the Eastern Mediterranean, and will involve a whole range of warships. These include destroyers equipped with surface-to-air and surface-to-surface missiles, frigates, assault boats, submarines, auxiliary ships, as well as helicopters and fighter planes.
Some of the warships are expected to dock at the occupied ports of Kyrenia and Famagusta, as well as at other Mediterranean ports.
 Engineers fined for smoking jointFOUR British tourists were fined a total of £1,800 by a Larnaca court yesterday for possessing under four grammes of cannabis.
The four tourists are all from London and are employed by British Aerospace as engineers.
Graeme Rainsborough from Hampton, Stuart Hickey and Scott Clewley, both from Kingston, Surrey, and Mathew Sherlock from Croydon, were all fined £400 each.
The four friends are all aged 24.
Their lawyer, George Pitajis, had pleaded for leniency.
"The accused were on holiday together for the first time in four years," he said, "they smoked just a small amount, because if they had smoked any more they wouldn't be able to build planes," said the lawyer.
The court decided against a custodial sentence, agreeing that the tourists had already spent five days in custody rather than at their luxury Ayia Napa hotel.
The Britons also missed their flight back to the UK and had to find extra money to pay for new tickets.
 We need more and more bloodTHE 17TH National Blood Donation Week, which kicks off on Monday, will see a series of donation events aimed at boosting the country's blood resources.
At a press conference yesterday, the Blood Donation Society (SEAD) said Cyprus' blood requirements rose by around six per cent a year. In 1997, 41, 264 bottles of blood were needed, and the number is always increasing due to the ever-greater number of accidents, special surgical procedures and cardiac surgery.
On average, 113 bottles of blood are needed every day to meet the needs of 102 patients. SEAD has always managed to juggle blood donations so that Cyprus has never had to bring in blood from overseas.
At the time of SEAD's creation 21 years ago, the country needed just 12,500 bottles of blood, but blood donors were so scarce, just three per cent of that figure was held in reserves.
The blood drive will see mass appeals to the public to donate blood, with several high-profile events taking place during the week, including the donation of blood by Deputies and members of other organisations. For the 12th year running, cyclist Michael Agrotis will also cycle from Paphos to Nicosia in order to raise awareness.
 Dane flown home to face drug chargesDANISH national Kurt Nielsen was flown from Larnaca back to Denmark yesterday to face drug trafficking charges.
Nielsen, 32 from Copenhagen, is wanted in Denmark for possessing and trafficking over 100 kilos of cannabis imported from Norway.
The suspect was arrested in Ayia Napa last Friday by Cyprus police following a request from Danish Interpol.
Nielsen was remanded in custody pending the preparation of extradition papers, but he has since decided to return home of his own free will.
He was accompanied on the flight yesterday by Danish police officers who had come to collect him.
 Court to rule on demolition order to ease trafficA COURT is to rule next month whether a building blocking plans to ease traffic congestion at a key Nicosia intersection can be pulled down.
Plans to ease the chaotic traffic situation at the Gavrielides traffic lights have been on hold since 1991, due to wrangles over the Choppas building, which must be demolished if the plan is to go ahead.
The plan calls for the widening of Santa Rosa Avenue towards Griva Digenis, while the left lane leading to Nikis Avenue will be replaced by a new road behind the Gavrielides Building. Nikis Avenue itself will be widened, taking up the space where the Choppas Building currently stands, providing an extra lane to turn left into Griva Digenis.
The owner of the building has challenged official requests from the town planning department to demolish it, and the case is due before the court next month.
If the court finds in favour of the Planning Department, work is expected to begin on the project as soon as possible.
The Town Planning department was unavailable for comment yesterday.
 Music teachers suspend strikeMUSIC contract teachers have suspended their weekly 48-hour strikes until June 9, when their changed job descriptions will be presented to the House of Representatives.
The decision was taken by the Music Teacher's Association after the Education Ministry agreed before a House Education Committee to present a proposal to change the teachers' basis of employment to the House.
Music teachers began their weekly 48-hour strikes two weeks ago in protest at the government's failure to deal with their demands for permanent jobs.
© Copyright Cyprus Mail 1998