THE HOUSE Finance Committee yesterday approved a government request to raise $400 million abroad through a bond issue to cover deficits this year. The timing of the issue, which is likely to be in European currency units or euros, will be decided later by the Finance Ministry.
Committee Chairman Alexis Galanos said the government had notified members of the committee that the loan request had nothing to do with the taxation package submitted to the House late last month.
Part of that package was thrown out by the House on May 28, while the remainder was slotted for review by the committee in October.
Independent economists said they were not surprised by news of the government's request, which is now virtually certain to be approved by the House plenum.
The fiscal deficit last year stood at more than five per cent of GDP and is set to leap to seven per cent by the end of 1998. Real GDP for 1998 is projected to be nearly £3.5 billion.
The government says the widening shortfall has mostly resulted from a deliberate expansive fiscal policy in 1997 to inject life into a sluggish economy, subsidies to an agriculture sector ravaged by a persistent drought, and the projected loss this year of some £130 million in import duties lifted to comply with a Customs Union agreement with the European Union.
Galanos, a Diko rebel who supports the government of President Glafcos Clerides, sought to defend the planned bond issue, arguing that interest rates abroad were lower than those at home - 4.5 to 5 per cent compared to 7 per cent - and that the island's adequate foreign currency reserves, currently estimated at $1.75 billion, permitted the move.
"Prospects for interest rates abroad are not unfavourable and, barring any unforseen developments, should go down further," said Yiannos Tirkides, the Popular Bank's chief economist. "They don't want to borrow at home so as not to put undue pressure on the credit market."
Tirkides and other economists said that heavy government borrowing at home could crowd out investors seeking to tap the local capital market and pose something of an unfair competition in view of the general preference for the security of government papers.
THE LAWYER for one of three jailed British soldiers yesterday argued against the admissibility of testimony allegedly revealing who dealt the fatal blow to Danish tour guide Louise Jensen.
But during an application to have the testimony of British detective Michael Flack accepted by the Supreme Court, Prosecutor Petros Clerides said the state believed it to be reliable and credible.
Flack, 53, was jailed last year with another Briton for burglary. He had claimed he was in Cyprus investigating pharmaceutical fraud.
While in prison he spent time with the three soldiers. Justin Fowler, 30, from Falmouth, Allan Ford, 29, from Birmingham and Geoffrey Pernell, 27 of Oldbury in the West Midlands were sentenced to life without remission in March 1996 for the savage killing of 23-year-old Jensen in 1994.
Their lawyers are basing their appeal on claims of illegal arrest, undue harshness of the sentences, and alleged mistakes made by criminal court judges.
They want the Supreme Court to overturn the decision of the lower courts, or to reduce the sentences.
Prosecutor Clerides said the new evidence from Flack would reinforce the guilt of the accused and must be accepted "in the interests of justice".
Flack's 18-page statement, which is not signed, was faxed to the law offices of Lefkos Clerides on March 31 this year.
"The testimony is reliable and credible, and I don't see what personal interest this person would have in the case. I don't see that he would have any vested interest," Petros Clerides said.
Antonis Andreou, Pernell's lawyer, said he and Tassos Katsikides, representing Ford, supported the prosecution's application to have Flack's testimony admitted.
Asked by the court how it would affect their clients, Pernell and Ford, Andreou said it would affect their sentences.
"It fundamentally changes the role of my client and Katsikides' client," Andreou said.
He said the courts which convicted the three did not have all the details of that happened that night and had drawn "certain conclusions".
Jensen was snatched in September 1994 outside an Ayia Napa petrol station after being knocked off a bike driven by her Cypriot boyfriend.
She was bundled into a car and taken to a remote spot where she was stripped and sexually assaulted before being beaten to death with a spade and buried in a shallow grave by the side of the road.
"The issue here is who hit the victim with the spade. It appears one of the applicants confesses he dealt the fatal blow to the victim. If the court accepts this then there may be an issue of acquittal," Andreou added.
But Fowler's lawyer Christos Pourgourides said the issue "is not at all clear".
Citing precedents in British law, he argued against introducing fresh evidence after trial, and also questioned Flack's reliability.
He said Flack had given no statements to anyone in authority regarding the case.
"When he was released (from prison) he made masses of statements to the British papers and radio," Pourgourides said, referring to articles in the tabloids late last year.
"But from November 1997 to March 1998 he did not do anything to serve justice or help the courts. It was just a publicity seeking stunt."
Pourgourides said that being an ex-policeman, Flack should have done things differently. "If he had sound evidence he should not have given it to the papers," he said. I would view this (Flack's course of action) as contempt of court."
He also referred to Flack's criminal record and accused the Briton of seeking free publicity for his private detective business in the UK.
A DIKO leadership contender yesterday charged the party incumbents with breaking every rule in the book to get their way at a rowdy party conference over the weekend.
The conference approved a motion to postpone leadership elections until November, which was what party leader Spyros Kyprianou and others in the party leadership wanted.
But Kypros Chrysostomides alleged yesterday that the leadership had employed "undemocratic methods" during the conference in Nicosia.
Sunday's proceedings were marred by shouting matches and even fist-fights between rival supporters of Chrysostomides and Kyprianou.
Chrysostomides said the party leadership had threatened to refuse to resign if the conference did not approve a motion for leadership elections in November. He said an opposing motion, for earlier elections, was not even put to the vote.
"Also, despite the fact that a secret ballot was asked for, as provided for by the party constitution, the leadership refused to accept such a procedure," Chrysostomides said.
"They imposed an open show of hands vote so that the real feelings of the delegates would not show," he said. "Also, on the invitation of the leadership, a large number of non-delegates voted in the open vote when they had no right to."
"Everything was arranged to ensure the leadership stayed in place," the challenger claimed.
Replying to Chrysostomides's claims, Kyprianou said later the conference had heard opinions expressed "with complete openness."
He defended the decision not to hold a secret ballot to decide the issue of when to hold leadership elections by saying it would "only have wasted conference time" as "the debate had plainly shown the overwhelming majority of the delegates supported the motion".
The Diko leader dismissed the rowdy behaviour at the conference as attributable to a "minority element" within the party.
Kyprianou did not hide the fact that he was very pleased with the outcome of the conference. He said that while he did not plan to stay on as Diko leader indefinitely, he believed he could "contribute to the creation of a very strong party of the centre".
The conference also decided to call on rebel Diko deputies Alexis Galanos and Katerina Pantelidou to abandon their House seats. Galanos and Pantelidou broke ranks with the centre-right party over its decision to back challenger George Iacovou in the February presidential elections.
Galanos retorted yesterday that he was an independent. The deputy has set up his own party since the elections.
Galanos said he was "saddened" by the goings-on at the Diko conference.
The party has been ridden with strife ever since Iacovou's narrow defeat in the elections.
At around 11.15am, Yiorgos Miltiades Diklis was cycling with two friends, Marinos Triarchou and Nicolas Kolokasides, both also 14, towards their home village of Liopetri when he was hit by a Mitsubishi Pajero jeep driven by Andreas Mitsides, 52.
Diklis' two friends ran to alert authorities, but Diklis was dead by the time the ambulance arrived. He was taken first to a clinic in Paralimni and then on to Paralimni General Hospital, where he was pronounced dead.
Meanwhile a 15-year-old Limassol girl, Maria Pavlidou, died in Nicosia General Hospital late on Sunday night of injuries sustained in a road accident on Makarios Avenue in Limassol last Thursday.
State prosecutor Georgios Papaioannou told the Larnaca Assizes that the alleged victim was unwilling to appear before the court.
The court then dismissed the case against Nicos Chrysostomou, who was charged with raping the woman in a forest outside Dhelikipos village in the Larnaca district on November 30, 1997.
Meanwhile, Nicosia police were yesterday investigating a 22-year-old Syrian tourist's claim she had been abducted and repeatedly raped by a Maronite man married to a Cypriot woman. The woman complained the man had imprisoned her in a house outside Nicosia.
In an interview with Alithia newspaper on Sunday, Father Pancratios Meraklis confirmed what press reports have been suggesting for months - that he is the 'Aids priest' suspended from Church duties by the Holy Synod.
Meraklis states he may have caught Aids from contact with HIV-positive patients he ministered to. "I have a fungus infection on my fingers, which is now almost cured, but two years ago was more serious and caused wounds," was Meraklis' explanation for how he may have contracted the deadly virus.
"Of course this is not certain and not even science can define when or how I contracted the virus. Perhaps it is a gift from God to sanctify me," Meraklis told Alithia.
Meraklis, who always denied Archbishop Chrysostomos's claims, declined to comment on whether he was gay, but said he was for freedom of choice for adults.
"They are mature and can decide for themselves and then account for their choice to God and people," he said when asked to comment on the recent decriminalisation of homosexuality. However, Meraklis said he was against decriminalisation for "non-adults".
In March 1996, several people were hurt when stone-throwing Meraklis supporters clashed with police using teargas outside the Archbishopric in Nicosia. Meraklis was the people's favourite for next Bishop of Morphou, but Chrysostomos said he was homosexual and thus "unsuitable" for promotion.
Fresh elections for a new Morphou Bishop, suspended after the rioting, are to be held on July 5.
Meraklis, who was placed on permanent leave for health reasons on May 18, will not be in the running this time round.
The 42-year-old cleric is now living at a relative's home in the Skouriotissa forest and is undergoing Aids treatment.
"All this I am going through is a test from God," he told Alithia.
Of the seven nationalists held, two were later released, the reports said. One of the two was former Grey Wolves leader Enver Bahceciler, while the current leader of the group in the occupied areas branch Sadik Canli is still in detention.
The incidents took place on Friday night, when a convoy of cars carrying members of the Grey Wolves arrived at Zodia village. A fight then broke out between the extremists, who were on their way to a 'solidarity meeting', and the villagers, with sticks and chairs being used as weapons. Four people were hurt. The fight was eventually broken up by Turkish Cypriot 'police' firing shots into the air.
Now the villagers want the Denktash regime to act to prevent incidents like this happening again. They also say certain politicians in the north are inciting hatred and violence between the Grey Wolves and settlers.
The villagers, who stood guard outside their property with sticks for long hours into the night after the Grey Wolves had gone, say they are against differentiating between Turks, Turkish Cypriots and Kurds, and it was this allegiance which sparked off Friday's clashes.
On Sunday, Republican Turkish Party leader Mehmet Ali Talat visited the village and urged the inhabitants to remain calm and not to "respond to wrong with wrong".
A CHEF was stabbed by his girlfriend and a man was shot in the hand by his brother-in-law in separate incidents in the Larnaca area over the weekend, the District court heard yesterday.
The knife attack occurred outside an all-night cafe near the Larnaca port at about 7am on Sunday. The court heard that the cafe's chef, 42-year-old Afxentis Nicolaou, suffered a two-inch deep stab wound during an argument with his girlfriend, Eleni Kalogirou, 30, and two men.
Nicolaou was rushed to Larnaca hospital but was so drunk and rowdy he had to be given a sedative before doctors could operate on him, police said. His condition was yesterday described as stable.
Kalogirou was arrested on Sunday morning and later remanded for four days on suspicion of carrying out the attack.
The shooting incident, in which 30-year-old Andreas Harpas was injured in the hand by a shotgun pellet, occurred at Agglisides village on Saturday night.
The court heard that Harpas' brother-in law, 20-year-old Nicos Yerolemides, fired four times at Harpas with his shotgun. The attack took place outside the Yerolemides country home, outside Agglisides, when Harpas turned up looking for his wife, Kyriakoulla, the court heard. Kyriakoulla had gone there earlier in the day with the couple's two young children after packing her belongings and leaving the home in the village she shared with her husband, the court heard.
Yerolemides was remanded for four days on Sunday in connection with the attack.
This was the official response of the Communications and Works Ministry yesterday after a report by Sigma TV on Sunday night that two bridges on the new motorway were subsiding.
The new stretch of road has only been open for one and a half years.
Communications and Works Minister Leontios Ierodiaconou was initially quick to confirm that a general check on the two bridges would be carried out this week.
His ministry, however, issued a written statement yesterday saying that all bridges on the island's newest motorway undergo regular checks by the Public Works Department and are constantly under observation for any problems.
The latest check was carried out only a week ago, and according to the ministry the bridges were found to be in good condition.
The possibility of having to rebuild the two bridges, which cost 16 million pounds to construct, would be an unattractive prospect particularly since hundreds of thousands of pounds are already being spent fixing a bridge on the Limassol-Nicosia motorway after it was found to be sagging.
The bomb went off at around 3.15 am in a car belonging to Constantinos Neophytides, owner of Versus, the popular Nicosia nightspot. At the time, the vehicle was parked outside the apartment block where Neophytides lives on Praxandrou Street in Strovolos. No-one was injured, but the car, a Volkswagen Golf Cabriolet valued at around £25,000, was extensively damaged. Other vehicles parked nearby were also damaged, and windows in the block were broken.
Neophytides said he had no idea who might have planted the bomb, as he had no enemies.
Pasydy General-secretary Glafcos Hadjipetrou told a news conference that Doctors' Branch head Stavros Stavrou, Stavrou's second-in-command Petros Petrides and Doctors' Secretary Chrisoulis Christofi had been officially removed from their positions in the wake of their announcement last week that government doctors would vote on whether to stay with Pasydy or form their own breakaway union.
At the time of the doctors' announcement, Stavrou accused Pasydy of not paying enough attention to the doctors, and said a union of their own would "defend their own interests". Government doctors are calling for an upgrade in their salary scales, reorganisation of hospitals to increase efficiency, organised overtime, cuts in the hours doctors spend on call, and a standard overtime pay rate. Stavrou also demanded an apology from Hadjipetrou for the union's treatment of the doctors.
However, Hadjipetrou said yesterday that the union had invited the doctors to discussions several times, but the only time they had actually come to a meeting they had walked out almost immediately, saying Pasydy was "autocratic" and "dictatorial".
Doctors across the island voted yesterday on whether or not to split from the union. The result is not yet known, but it is thought the majority will be in favour of a new separate union.
ANTI-DRUG groups yesterday chided the government for a lack of national policy on the growing problem of drug abuse in Cyprus.
At the launching of a fresh anti-drug campaign coinciding with the UN- sponsored International Day Against Drugs on June 26, local anti-drug groups called on the government to prioritise the war against narcotics.
"While President Glafcos Clerides spoke against drugs at a formal function exactly two years ago, a drug prevention Bill has yet to be presented to the House of Representatives for discussion, and there is no national policy on the matter," said Nicosia Anti-Drug Association scientific consultant Dr Andreas Demetriou.
Representatives of the association spoke of the increasing number of young people being arrested for drug-related crimes but stressed that Cyprus is in a much better position than Greece or England because the problem is not yet out of control.
As Demetriou pointed out, whereas in Greece there is one death per year caused by drug use, in Cyprus there have been only five drug-related deaths over 20 years.
The lack of official studies and statistics on the scope of drug use in Cyprus was also highlighted yesterday.
Demetriou repeated that from unofficial observation, the drug most used by young people in Cyprus is cannabis in its various forms.
The president of the Youth Organisation, Andreas Taliadoros, described drug use as "an epidemic affecting developed as well as developing countries". He emphasised his organisation's efforts in fighting the war against drugs.
The Youth Organisation has an emergency telephone line, open daily from 8am until midnight, for young people facing drug related problems. The number is 1410.
To mark International Day Against Drugs, the Anti-Drug Association has organised a rock concert for Thursday June 25 at Lakatamia Amphitheatre. The Greek band Ipoyia Revmata is headlining, supported by various Cypriot musicians. Tickets are on sale at All Records and Enigma shops in Nicosia, Pattichion Municipal Theatre in Limassol, and City Music in Larnaca.
Peter Otto Meyer, 55, arrived at Famagusta port on May 13 and moored his boat there for two days. He was taking part in a race from Turkey to Syria and Israel along with 84 other boats from 16 countries.
Meyer pleaded guilty but repeatedly argued that he was unaware that Famagusta port has been closed since the 1974 Turkish invasion and occupation.
In reaching a verdict, Larnaca Court judge Yiorgos Stylianides stressed that ignorance of the law is not an adequate defence.
THE Cypria '98 Cultural Festival will be bigger and better than ever before, Education and Culture Minister Lycourgos Kappas said yesterday.
Speaking at a press conference to launch the festival, Kappas said it would include theatrical performances, opera, dance recitals, concerts and an exhibition by artists from all over Europe. The festival will cost around £300,000 to stage.
The Cyprus Theatre Organisation will perform Irini by Aristophanes, starring Sotiris Moustakas, while four other local theatres - Theatro Ena, Satiriko Theatro, Theatro Praxis and Theatro Scala - will mount a joint production of Euripides' Vraches.
There is also a possibility that the Greek National Theatre Company will be giving two performances of the Aristophanes' play I Vatrachi.
Among the musical attractions will be three visiting orchestras, the Salzburg Philharmonic, the Baroque Orchestra of Europe and the Prague Chamber Orchestra, as well as a solo performance by famous local pianist Martino Tirimo.
In addition, there will be ballet performed by German and Greek companies.
For those who prefer static art, the exhibition 'Berlin Wall: 30 Artists for Freedom' will be on at the Municipal Arts Centre. The exhibition features 30 objets d'art created from pieces of the Berlin Wall.
Cinema fans, meanwhile, will be able to enjoy a five-film mini-festival at the Russian Cultural Centre and dedicated to the work of Russian director Andrei Tarchovski.
Cypria '98 will be held during September and October, and will tour the four main cities.
CHRISTAKIS Thoma, in a Mitsubishi Lancer Evolution IV, won the Skoda Tour of Cyprus Rally at the weekend after leading from start to finish.
He finished more than seven and a half minutes ahead of second- placed Parmenion in a Proton Wira, to take maximum points and move into second place in the Cyprus rallying championship and fourth in the Middle East standings.
Stelios Galatariotis, racing in his first international event, finished third Alessandro Fiorio's old Lancia HF Integrale.
Only 18 of the 50 cars which started out on Saturday morning made it back to the finish at Famagusta Gate on Sunday night.
The second day's racing proved to be the undoing of reigning champion Andreas Tsouloftas, who retired with gearbox problems after stage 13 while in second place, and also of Lakis Parellis, who was leading in the Formula 2 category when a broken driveshaft put his Opel Corsa GSi out on stage 13.
Thoma set the pace from the start, clocking fastest over the first four stages of the event to arrive back at the first regroup on Saturday lunchtime one minute and 57 seconds ahead of Tsouloftas, who was suffering from a stomach upset.
Tsouloftas recovered after the regroup, going through the next four stages faster than Thoma to claw back 38 seconds by the overnight halt.
Parmenion was lying third in the Proton Wira, three minutes and sixteen seconds behind Tsouloftas, with Stelios Galatariotis in fourth place.
Ex-champion Lenas Cleanthous had a relatively short outing on his debut in the tiny Perodua Lancil - gearbox trouble forced him to retire on stage 5. `Iason' - who had been in fourth position - went out on stage 7 when his Subaru's transfer box packed up.
Twenty-eight crews checked in to the overnight halt on Saturday night, all of them hoping for cooler weather on Sunday because the soaring temperature on Saturday had caused overheating problems for many cars, and great discomfort for the crews.
Twenty-seven cars set out early on Sunday for the final 386 kilometres and eight more stages.
Tsouloftas was confident he could make up the one minute, 19 second gap which separated him from Thoma, but the leader wasn't about to yield withot a fight. "Tomorrow, I attack," he had vowed on Saturday night, and when Tsouloftas clocked fastest over the first stage out on Sunday, shaving eight seconds off the leader, he responded quickly with a fastest time on stage 10, clawing back six precious seconds. The scene was set for a great battle between the two rivals.
Tsouloftas brought all his experience to bear, and pulled back 14 seconds on stage 11 and 19 on stage 12, arriving back at the mid-day halt just 44 seconds behind Thoma, who now looked like he might be overhauled before the finish - there were four stages to go on the last section.
Twenty-three cars left the Holiday Inn regroup on Sunday lunchtime for the last four stages, and the fans were expecting some fierce competition, but it quickly became apparent that it was not to be. Thoma went through stage 13 almost a minute faster than Tsouloftas, who was obviously having problems. Tsouloftas retired just after the stage with gearbox trouble, and the way was clear for Thoma to cruise home.
Thoma is now within striking distance of Tsouloftas in the local rally championship: he has 73.75 points to Tsouloftas' 82.5. Andreas Peratikos failed to finish, but is still third in the league on 45 points, with newcomer Galatariotis now fourth on 25.5.
For the first time, the Tour of Cyprus also counted towards the Middle East Rally Championship, so - with four of the seven rounds completed - Thoma stands joint fourth, with Tsouloftas (who scored in the recent Jordan Rally) and Parmenion joint sixth.