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Cyprus Mail: News Articles in English, 99-03-20

Cyprus Mail: News Articles in English Directory - Previous Article - Next Article

From: The Cyprus Mail at <>

Saturday, March 20, 1999


  • [01] Mini-reshuffle sees new man in top finance post
  • [02] A stop-gap solution?
  • [03] Michaelides says attacks aimed to neutralise Clerides
  • [04] Cyprus seeks to offload immigrants as tempers fray
  • [05] CY unions reject share offer
  • [06] Good times finally arrive for Hellenic investors
  • [07] Christofias heart operation a success
  • [08] Denktash did block EU Unficyp appointment
  • [09] Kontominas sells his stake in Interamerican
  • [10] Pakistani businessman rearrested

  • [01] Mini-reshuffle sees new man in top finance post

    By Charlie Charalambous

    THE CLERIDES administration yesterday closed a sorry chapter in its turbulent record when two new ministers and a government spokesman were appointed in a forced shake-up.

    Takis Clerides was named Finance Minister and Costas Serezis was the new government spokesman, while Christodoulos Christodoulou was moved to sit in Dinos Michaelides' chair at the Interior Ministry.

    Maybe the most significant appointment was that of chartered accountant Takis Clerides as Finance Minister to take over from Christodoulou.

    Christodoulou was effectively given a demotion from his cherished finance ministry post to take over the Interior Ministry from which Michaelides had resigned on Thursday.

    Minister of Finance is the top job in government - besides the post of foreign minister - but it's also a job which attracts the severest criticism, and Christodoulou would appear to have paid for his uncompromisingly austere tax and save policies.

    After being sworn in at the Presidential Palace yesterday, Christodoulou - a trusted Clerides aide - was less than ecstatic about his new post.

    "I have been asked to take over the Interior Ministry and felt I had no right to refuse the appointment," said Christodoulou when asked about his new role.

    The veteran number cruncher must now forget the Maastricht convergence criteria and get to grips with illegal immigrants and town planning law.

    His replacement, Takis Clerides, at 48 the youngest minister in government, mapped out his bright new economic future in which the words "dialogue" and "consensus" were much in vogue.

    "A dialogue is needed with all to achieve the best possible consensus because that is the basis of a joint effort which affects us all," Clerides said after being sworn in.

    The new minister had been briefed by his namesake before he faced the press, and his quotes are a definite reference to the so-called consensus dialogue which the president is carrying out.

    President Clerides is hoping to secure cross party backing for tax hikes and freeing of interest rates to assist the island's push for EU accession.

    "We must aim at an economy which is both competitive and humane and to achieve this we must all dare," said the new finance minister.

    However, Christodoulou, who had held the government purse strings since November 1994, warned the rookie that being popular was not his mandate.

    "The new minister must take all decisions he considers necessary, even if unpopular, at any personal or political cost," said Christodoulou, presumably reflecting on his own downfall.

    If Nicosia accountant Takis Clerides was plucked from out of the blue, then the appointment of Cypriot journalist and Greek TV presenter Costas Serezis - as Christos Stylianides' replacement - raised more than a few eyebrows.

    Opposition parties questioned the wisdom of choosing a man who had been living and working in Athens for the past 25 years and is unversed in the Nicosia political scene.

    Trying to nip such criticism in the bud, Serezis said yesterday: "I never stopped following developments in the Cyprus problem. I have never been cut off from Cyprus."

    Apparently Serezis accepted the job, not because of his strong political affiliations, but because he was the only one who said yes and was available.

    Cryptically, the 62-year-old said he didn't come back specifically to serve Clerides but to serve his country.

    Saturday, March 20, 1999

    [02] A stop-gap solution?

    By Charlie Charalambous

    ON THE face of it, having an accountant as Finance Minister and a journalist as the government's spin-doctor seem sound choices, but their relative inexperience in office point to a different strategy by President Clerides.

    The names of Takis Clerides and Costas Serezis were not the ones being banded about when there was fevered speculation of a reshuffle some weeks ago.

    And they didn't seem to have much chance of gaining office when the government suffered a double body blow when Christos Stylianides and Dinos Michaelides resigned in quick succession.

    There were several intense meetings between President Clerides and the main government power-broker, Disy boss Nicos Anastassiades, in the wake of the resignations.

    Anastassiades was said to be pushing for a major reshuffle that would incorporate some of the opposition, allowing the government to become more widely representative in nature.

    This was never likely to happen, with parties like Edek and Akel smelling blood and not wanting to be associated with a Disy-backed government struggling to regain any credibility.

    So it seems that Clerides has gone for a stop-gap solution, which buys him time to continue the "consensus dialogue" with other parties.

    Clerides knows that parties like Akel and Diko will not back privatisation, and plans to raise VAT by political argument alone.

    But to achieve his goal, he realises the need to dangle a few ministries in front of the party leaders to secure votes in the House where he has no majority.

    Anastassiades, understanding that Disy could suffer if the government's credibility continues to freefall, has even hinted that more changes could be in the offing when the dialogue has run its course.

    Furthermore, junior partner the United Democrats and Alexis Galanos are supporters who want a greater say in the decision-making process.

    Clerides would not look them over this time round if he did not have plans to include them in a wider shake-up later on.

    Because, from many points of view, the new ministerial appointments are somewhat curious and not wholly steeped in confidence-inspiring permanence.

    Why else would the president bring in two relatively inexperienced men - a quick glance at their CVs are a testament to their lack of political experience - who publicly confess they are going in at the deep end?

    Whatever people might say about outgoing Finance Minister Christodoulos Christodoulou, he had the experience if not the personality to keep the economy on track and lead it out of a slump.

    New Finance Minister Takis Clerides is British educated and carved out a successful career as a senior partner in accountancy and consulting firm KPMG/Metaxas, Loizides and Syrimis, but his credentials for steering Cyprus into the EU are thin on the ground.

    There are also question marks hanging over new government spokesman Costas Serezis, who may find he is ill-equipped to fend off a hungry press-pack looking to test his mettle after his 25 years as a TV journalist in Greece.

    The resignations also gave Clerides an excuse to remove Christodoulou from his beloved post and send him where he would be less high-profile and not so unpopular - the Interior Ministry.

    For some time now Christodoulou has been languishing at the bottom end of public opinion polls in which only Michaelides has done worse.

    Both Clerides and Serezis will be keen to prove themselves as worthy members of government, but the smart money is on their tenure being brief.

    Saturday, March 20, 1999

    [03] Michaelides says attacks aimed to neutralise Clerides

    FORMER Interior Minister Dinos Michaelides said in his official resignation letter that the ultimate goal of the persistent attacks against him had been the undermining of President Glafcos Clerides' government.

    In the letter sent to Clerides on Thursday and made public yesterday, Michaelides said that, during the last eight months, he had been closely monitoring the "unjust and unprecedented provocative plan which aimed to jeopardise and nullify my long term political and moral reputation."

    He said this "plan" was aimed squarely at attacking and "neutralising" Clerides' abilities to govern, with the ultimate aim of forcing the President out of office.

    Under these circumstance, Michaelides concluded, the only way he could protect Clerides' position was by resigning.

    He repeated his pledge to remain active in the political arena and thanked Clerides for his support in the past.

    In his reply to Michaelides yesterday, Clerides said he was satisfied that investigations had proved Michaelides' innocence of charges brought against him by House Watchdog Committee Chairman Christos Pourgourides, and said he had "never accepted the tarnishing of persons with the use of statements and rumours against them."

    He also thanked Michaelides for the work he had done while in office. Michaelides is to be replaced as Interior Minister by Christodoulos Christodoulou.

    Saturday, March 20, 1999

    [04] Cyprus seeks to offload immigrants as tempers fray

    By Martin Hellicar

    THE FUTURE of some 90 immigrants intercepted in a fishing boat off Gape Greco on Thursday remained uncertain yesterday as officials tried frantically to negotiate their return to Lebanon.

    But the chargé d'affaires of the Lebanese embassy in Nicosia, Halil El Hambre, questioned whether all the boat people had in fact sailed from Lebanon.

    Some of the immigrants were reportedly involved in scuffles with police late on Thursday night and again yesterday after they objected to being detained on board a vessel at Larnaca port.

    Police spokesman Glafcos Xenos said the reported incidents were nothing more than "disagreements" and "not serious".

    Assistant Larnaca police chief Charalambos Koulentis said the situation on board the Royal Prince cruise boat - to which the immigrants were transferred on Thursday night - was "under control".

    "The immigrants are being held on a cruise ship while efforts continue to have them sent back to Lebanon from where they came," Xenos said.

    The 89 suspected illegal immigrants, including 17 children and 18 women, were being held under police guard on the state-chartered vessel awaiting their fate.

    Meanwhile, police and officials from the Justice and Foreign ministries were working overtime to try and secure the return of the immigrants to Tripoli in Lebanon, from where police say they set sail on Tuesday.

    Xenos said negotiations for the return of the boat people were "delicate".

    Cyprus has an agreement with Lebanon for the return of illegal immigrants, providing the immigrants have documents proving they came from Lebanon.

    But El Hambre, who visited the immigrants yesterday morning, was cagey in statements he made to the Cyprus News Agency (CNA).

    "We are ready to assume our responsibility if we prove that some people have been living in Lebanon and left the country on that boat," the Lebanese embassy official said. "We are not sure whether they embarked in Lebanon and we are co-operating with the Cypriot authorities to see if there is some responsibility on our side, which we are ready to assume."

    El Hambre said he doubted the immigrants had all come from Lebanon: "The Cypriot police were not there to see (the embarkation), they got their information that people left from Tripoli and some of the boat people said they left from Tripoli but most of the others do not know where they were loaded."

    In January, relations between Cyprus and Lebanon were strained to breaking point after Lebanon refused to take back all but six of 29 immigrants Cyprus said had washed up on the island from Lebanon. The deal for return of immigrants was agreed to smooth over this crisis, but another tiff seemed to be looming yesterday.

    The immigrants are said by police to be mostly from Iraq, while others hail from Egypt, Syria, Palestine, Somalia and Sierra Leone. But most of them do not have travel documents, having thrown their papers overboard when police intercepted their boat on Thursday. Police managed to recover the passports of two Egyptian passengers from the choppy waters but the rest were lost.

    The immigrants were moved to the Royal Prince for their own comfort, as conditions on the unnamed fishing boat were very cramped. The immigrants, who were said to be in a poor condition when found by police, have been given food, drink and blankets by police.

    Police put their number at 84 on Thursday, but revised the count to 89 yesterday.

    Acting on a tip-off, the coast guard intercepted the boatload of immigrants in rough seas off Cape Greco at around 4.30pm on Thursday and guided to them to Larnaca port. Police had initially intended to steer the immigrants away from Cyprus but stormy seas made it necessary to bring them into safe harbour.

    Their vessel was reportedly captained by a Lebanese man often seen in Larnaca marina with his fishing boat.

    The immigrants had paid thousands of dollars each for passage to Crete, police said.

    Illegal immigrants have become a major concern for the government, with increasing numbers turning up on the island in recent months.

    A Limassol hotel is still playing host to 24 of 113 Arab and African boat people rescued off Cyprus in June. Twenty-three of the 113 have been given asylum and the other 66 been deported or repatriated.

    Police were cleared of any wrongdoing after the violent quelling of a riot by some of the 113 boat people at detention cells they were being held at in Larnaca in October.

    Saturday, March 20, 1999

    [05] CY unions reject share offer

    By Jean Christou

    EFFORTS by Cyprus Airways (CY) to soften the blow of a minimal pay rise with a generous share package were rejected by unions yesterday.

    CY spokesman Tassos Angelis said management had offered a 0.75 per cent pay rise to its 1,600 plus staff to cover the next three years, along with the 22 per cent stake in the company it announced last week.

    But Costas Demetriou, who heads the largest of CY's five unions, said the three unions demanding a 4.5 per cent rise, in line with semi-government organisations, had initially rejected the package.

    "This proposal is not a basis for discussion," Demetriou said. However, he added that, before giving its final decision, the unions would seek a meeting with Communications and Works Minister Leondios Ierodiaconou.

    Demetriou was speaking after a meeting yesterday between the three unions and management to thrash out a wage agreement.

    Pilots union Pasipy and members of the breakaway cabin crew union Sypkka are not seeking a pay rise, even though their colleagues who are registered with Cynika are.

    Cynika, which also includes administrative staff, engineers union Assyseka and members of Sidikek Peo are fighting for rises as part of the renewal of their collective agreements.

    Antonis Neophytou of Sidikek said CY's proposal did not satisfy the three unions. "The proposal is such that it does not even come close to the demands of the workers," he said.

    But the airline feels its package is more than generous.

    CY Chairman Takis Kyriakides said it was unheard of, when other airlines were talking of pay cuts, for a company like CY, which is undergoing restructuring, to accept even to discuss a small pay rise.

    Airline spokesman Tassos Angelis said the package offered to the unions would ensure industrial peace until the end of 2002.

    "During this period, all union demands entailing any cost for the company would be withdrawn and no other demands put forward," Angelis said.

    He said, if they agreed, the company would give a 0.25 per cent rise in 2001 and another 0.5 per cent in 2002. Angelis said the package also included a lump sum of £325,000 given to staff in 1998 in lieu of a rise plus another one per cent in benefits also given last year.

    In addition, he said, the airline would not make any demands for a pay freeze or make any changes to the index-linked six monthly Cost of Living Allowance (CoLA).

    "For us, what is important is not the pay rise," Angelis said. "What is important for us is for the company to survive, its competitiveness and the redefinition of employees to make them partners. This can be achieved with what we are proposing."

    Last week, CY offered its staff a 22 per cent stake in the company in return for cost-cutting concessions totalling £5 million per year.

    The 22 per cent offer consists of a ten per cent share in the profits, six per cent of the airline's shares for free and a further six per cent at a reduced rate.

    Initial reaction from the unions was not optimistic. They said

    management was offering them a deal worth £1.2 million in exchange for £5 million in cuts that would come directly from its members' pockets.

    CY made it clear the cost-cutting proposals were directly aimed at reducing its annual £40 million wage bill, which accounts for over 35 per cent of the airline's annual costs.

    Cyprus Airways Group announced a profit of £5 million for 1998 after two years of losses. But the results were only due to its successful charter firm Eurocypria and recently-established Duty Free Shops Ltd.

    The group also expects a profit this year, but unless CY manages to cut costs and unprofitable routes, industry experts predict it will not last the four years leading up to EU membership and full-blown air liberalisation.

    In January this year, the government failed to attract any investors when it put 10 per cent of the airline's shares up for sale as part of its obligations under Stock Exchange regulations.

    The bid to reduce the government's share from 80 to 70 per cent, which must be completed by September, was made at the height of a strike threat over pay, which only served to remind investors of the company's rocky relationship with its five unions.

    Saturday, March 20, 1999

    [06] Good times finally arrive for Hellenic investors

    By Hamza Hendawi

    IT MUST HAVE felt like a downpour after a long and relentless drought.

    Hellenic Bank yesterday finally came through for its long-suffering investors yesterday, rewarding their faith and patience with an announcement of bond, rights and warrants issues designed to more than double the bank's nominal capital to £75 million.

    Ironically, the bank's share fell 9 cents yesterday to close at £3.41, but traders said the drop was caused by heavy profit-taking by speculators who had taken heavy positions in Hellenic in recent days. The bank's warrants were also down by 11 cents, but the traders said both titles looked set to rise when trading resumes Monday.

    Hellenic Bank investors had for long enviously watched shares of the much larger Bank of Cyprus and the Popular Bank steadily rise while their own stock continued to languish way behind. All this seemed to change at the start of 1999, when the stock began to climb, appreciating by as much as 27 per cent since January 1.

    "If you want to buy Hellenic shares today for next year, then, yes, it is an excellent buy at £3.41," Elias Kazanos of S.B. Unigrowth Ltd told the Cyprus Mail.

    "I used to advise against buying Hellenic, but I am not of this opinion today," said Stavros Agrotis of CISCO, the Bank of Cyprus' brokerage arm. "In terms of fundamentals, I would now put Hellenic with the Popular Bank and Bank of Cyprus on a sort of equal basis," he told the Mail.

    "I find the results very good and Hellenic is good at this price."

    A robust and cheerful Panos Ghalanos, Hellenic's chairman and chief executive, told a news conference yesterday that operating profits increased by 16.6 per cent in 1998 to £11.8 million. Pre-tax profits in 1998, he said, were £3.4 million, down 50,3 per cent from last year as a result of a one-off, £4.7-million redundancy scheme which attracted 63 employees from a targeted 75.

    "The results are extremely satisfying, especially in view of the fact that 1998 was for the group a year of reform and implementation of important strategic investments," said Ghalanos, apparently referring to the opening of the bank's first branch in Greece last December. The number of branches in Greece is expected to increase to four in the next 12 months, according to bank officials.

    Adonis Yiangou of Expresstock Ltd, said Hellenic's results may look superficially negative "but that a closer look reveals a different picture."

    Ghalanos said the bank planned to issue £15 million worth of non- convertible, 10-year bonds in June. They would have an interest rate of 7.30 per cent in the first year and a fluctuating rate thereafter.

    A total of £6.5 million worth of shares would be available in a rights issue at a ratio of one to every four held for £2.30 apiece, in addition to an issue of 1.3 million warrants with a January 2001 exercise date and which will be attached to the rights issue.

    The rights and warrants issues will have to be approved by an annual general meeting scheduled for May 26.

    Saturday, March 20, 1999

    [07] Christofias heart operation a success

    AKEL general-secretary Demetris Christofias yesterday successfully underwent five hours of open heart surgery at London's St. Mary's hospital.

    The delicate operation was carried out by top heart surgeon Dr. Rex Stanbridge and his team at the hospital in Paddington, west London.

    Stanbridge announced the operation to be a success and without complications.

    Christofias remained in the intensive care unit for observation overnight.

    The leader of the island's second largest party will remain in the UK for a fortnight to recover his strength.

    Saturday, March 20, 1999

    [08] Denktash did block EU Unficyp appointment

    By Jean Christou

    TURKISH Cypriot leader Rauf Denktash has objected to the appointment of an Unficyp force commander from an EU member state, a western diplomatic source confirmed yesterday.

    The source said that, as far as he was aware, the Turkish Cypriot side had not put its objection in writing, but that the issue had been raised during a meeting on the island to discuss the appointment of a new force commander.

    "I don't know whether the complaint was made to Nicosia or New York," the source said.

    The United Nations in New York, which is handling the issue, has taken the objection seriously enough to postpone the appointment of a new commander to the 1,200 strong force that mans the 180km-long buffer zone dividing the island.

    It has also asked Unficyp's current Argentinean Force Commander, Major Evergisto Arturo de Vergara, to stay on in Cyprus beyond his two-year tour of duty.

    The UN had been planning to appoint a Dutch officer until the objection was raised.

    "It's a UN issue," the diplomatic source said yesterday.

    He said it was not a question of the UN bowing to the demands of one side; "but the United Nations does need the co-operation of both sides to operate efficiently."

    Unficyp says it is not in a position to state why the Argentinean general has been asked to remain in Cyprus, and could only confirm that de Vergara had been asked to "stay on".

    According to Western diplomats, Denktash is opposed to the appointment of an Unficyp commander from any EU country. The Turkish Cypriot side is bitter over the EU's December 1997 decision to go ahead with negotiations for Cyprus' accession.

    Since then, Denktash has called a halt to all contacts between the two sides, stated that the intercommunal talk are dead and has refused to meet any Western diplomats in their capacity as EU representatives.

    The most recent incident last week saw Denktash agreeing to meet with German EU presidency Cyprus envoy Detlev Graf zu Rantzau only as Germany's emissary, but not as an EU representative.

    Rantzau was on the island at the same time as US State Department co- ordinator Thomas Miller. Both men left deeply pessimistic on the possibility of any progress on the Cyprus issue.

    Saturday, March 20, 1999

    [09] Kontominas sells his stake in Interamerican

    GREEK tycoon Demetris Kontominas has sold his stake in Interamerican Insurance to the Popular Bank, allowing the Cyprus-based bank to own 95 per cent of the company and thus complete its acquisition.

    Kontominas, who had owned Interamerican before he sold it to Nicos Shacolas several years ago, owned 8.5 per cent of the company, one of three which the Popular Bank said it was taking over in January.

    The other two, also owned by Shacolas, are Paneuropean and Philiki.

    Popular Bank announced the takeover on January 12 in a £47-million deal that put the stock market on fire, kicking off a rally which has so far seen prices rise by as much as 30 per cent.

    The three companies will be delisted from the Cyprus Stock Exchange and their operations will be merged with those of Cyprialife and Laiki Insurance, the Popular Bank's insurance subsidiaries.

    Late last year, Kontaminas was for weeks reported to be negotiating the purchase of Shacolas' three insurance companies, but the talks had apparently collapsed when the Greek tycoon refused to pay the price demanded by Shacolas.

    Saturday, March 20, 1999

    [10] Pakistani businessman rearrested

    By Anthony O. Miller

    FATE took a bizarre turn yesterday for the Pakistani spouse of an American woman, who was freed from jail and imminent deportation by the Attorney- general so he could get a valid visa: he was jailed again for deportation when he went to get the visa.

    Eric Ernest, 31, ex-owner of an offshore business, had been arrested and jailed on Monday, pending deportation to his native Pakistan. His offshore visa had expired, and letters to Immigration chief Christodoulos Nicolaides for a tourist visa had gone unanswered.

    Ernest's lawyers, Nicosia law firm CP Erotocritou, had secured Markides' promise that Ernest would be released from prison and allowed to apply to Immigration authorities for a three to four month visa.

    "Our client does not want to stay in Cyprus," lawyer Pavlos Erotokritou insisted yesterday. "He only wants to accommodate his applications with the American Embassy in order to get this visa and get out of here. He doesn't even want to return to Cyprus as far as I know. After this kind of treatment, I wouldn't want to come back to this country," he added.

    Markides for his part played down his intervention. "I did not order" Ernest released and given a visa, he said. "I asked for a further investigation... into the matter by the competent authority. There is nothing else I can do."

    "The immigration officer (Nicolaides) insists that he should leave Cyprus," Markides said. "It's very vague. The problem is that they have in their file different information. That's their point. They say this claim that he will go to the United States... they don't believe him. Just like that."

    The "different information" is said to be the allegation that Ernest tried to work as a house-painter some time since July 1998, when the Central Bank revoked his offshore business license. Erotocritou said this was absurd - that Ernest was a chartered accountant who has never been a painter.

    Norman Elliott, former president of the Cyprus Offshore Enterprises Association, spoke highly of Ernest and confirmed he had done some volunteer accountancy work for the Association.

    "He used to come in and help out the secretary there... I know him quite well," Elliott said. "I have no reason to suspect there's anything untoward about him at all... In fact, I think at one stage I might have given a reference for him."

    "To the best of my knowledge, he conducted his business affairs here legitimately... He's always said to me he only wants to stay in Cyprus long enough to get over to America," Elliott recalled.

    "Mr Nicolaides spoke with the Attorney-general," a government source told the Cyprus Mail yesterday on condition of anonymity. "They decided something new" since Markides got Ernest out of jail on Thursday and asked Nicolaides to grant him a visa.

    Told of Ernest's re-arrest, Markides replied: "If he wants to complain, he has a lawyer, he may take legal proceedings," adding: "It's a very wide discretion that invests with the Immigration Officer (Nicolaides). This is his decision... There is nothing illegal about it."

    "If it is wrong as a matter of law, it is for me to say. If it is wrong as a matter of wisdom, it is not for me to say. I am the legal advisor. I am not in government."

    Erotocritou said: "Nicolaides does have a very broad discretion, unfortunately. These deportation orders are handled by him, and his signature is the only thing necessary."

    "We have been misled," he added, "and I believe they have been abusing their powers. Because if I am speaking with an immigration officer at 6.30pm on March 18, and he tells me to send my client the next day to fill out the application form and he will get a visa, and the chief of Migration has already issued on March 18 a deportation order against him - this is a matter that I personally believe we have to shout about."

    "It's not only a matter of Eric now. It's a matter of the Chief of Migration not taking the advice of the Attorney-general. It's a matter of the immigration officers going behind the lawyer," Erotocritou said.

    "What is the point of me calling them to make sure this guy will go there and he will be treated properly, with the instructions of the Attorney- general, and at the end of the day being arrested again?" he asked.

    "This story is a very sad story," said the government source, "and the end is not a very happy ending."

    © Copyright Cyprus Mail 1999

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