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Cyprus Mail: News Articles in English, 99-10-23

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

From: The Cyprus Mail at <>


  • [01] Market slips back as traders mull levy plan
  • [02] Klerides predicts continued growth
  • [03] Tax hike hits 4x4 importers
  • [04] Tsangarides re-arrested after court release
  • [05] Akel warns against talks for talks' sake
  • [06] Exploding pressure cooker warning
  • [07] Anger as sea lion whisked away to Russia

  • [01] Market slips back as traders mull levy plan

    By Hamza Hendawi

    AN UNINTERRUPTED winning streak dating back to October 8 ended yesterday, but only just. The all-share index finished 0.55 points, or 0.09 per cent, lower at 603.60. Only the shares of banks and investment companies finished in negative territory, while insurance stocks soared by 5.86 per cent.

    The market's breather came as brokers and investors were taking stock of a government announcement on Thursday night that it soon planned to propose a levy on stock market transactions of up to one per cent.

    Finance Minister Takis Klerides said yesterday that the proposed levy, which would net the treasury an estimated 60 million a year, would be submitted to the house next week.

    The levy, together with a proposed hike of two percentage points in Value Added Tax to 10 per cent, will bring an extra 140 million into the state's coffers, thus next year reducing the fiscal deficit to 4.7 per cent of GDP (the value of goods and services produced domestically).

    The proposal to tax stock market transactions received a mixed response from brokers yesterday. Speaking to the Cyprus Mail, some viewed it as evidence of what one described as the government's resolve to kill the market, while others said investors would take such a levy in their stride as long as the government gave assurances that it was not contemplating further taxes.

    Investors currently don't pay tax on capital gains, a situation the government has no plans to change in the near future.

    Some brokers, however, thought that a levy of one per cent on transactions was far too high and that a more reasonable rate would be 0.5 per cent.

    "It is a lot of money. One per cent is too high," said Yiannos Andronikou of Suphire Stockbrokers. "It will affect the market to some extent. Already investors are paying brokers commission, paying the exchange when they buy shares and paying stamp duty. They are trying to destroy the market, and a 1 per cent charge on transactions could be the final stroke," said Andronikou.

    Klerides, speaking before the House's powerful Finance Committee yesterday, said: "It is a fair toll because it affects those that decide they want to invest in the stock exchange and already pay a similar amount in exchange and brokers' fees which are more than one per cent."

    The proposal has also won praise from former president and the island's chief negotiator in EU accession talks, George Vassiliou.

    "It is a very correct measure because it will only affect those who buy or sell shares," he told reporters before leaving for Greece. "It will also contribute to the strengthening of the stock exchange because people will know that... no other costs will come up at a later date."

    A one per cent levy on transactions may in fact become a gold mine for the cash-strapped government of President Glafcos Clerides.

    Volume on the bourse ranged between 50 and 115 million daily during the boom months of the summer and before a backlog problem forced the market to pull down its shutters on three occasions in July, August and September.

    The market's daily volume has been averaging about 25 million since it reopened after the last of the three closures -- a month-long shutdown ending on October 4 -- but it is now under a set of restrictions designed to allow brokerages and public companies to sort out a heap of unprocessed deals and erroneous title deeds.

    Once the market is left to its own devices, traders believe, the days of high volume will immediately come back. If this happens, an average day of 50-million volume would net the government 500,000.

    Such a scenario is hardly beyond the realms of the possible, according to one trader.

    "This current bull run will continue for another year or two," predicted Panicos Kaiserlides of Benchmark Securities Ltd. He cited proposals to liberalise interest rates, the listing of banks and other blue-chips on the much larger Athens exchange and a wave of new listings to support his argument that the bull run would last well into 2001.

    "The government, for political reasons, may put in place a mechanism that will ensure that post-liberalisation interest rates initially drop from current levels. This in turn will push more and more people to invest in the market," he said, alluding to the argument adopted by opposition parties that interest rates would go up once they were liberalised.

    Kaiserlides also rejected the suggestion that prices, nearly 40 per cent up since October 4, would drop sharply once the market returned to normal operational conditions.

    "As prices go up, they create new and higher levels of resistance. So, if the Bank of Cyprus, for example, is 18 when normal conditions return, it will not drop to 12."

    The Bank of Cyprus closed 15 cents down yesterday at 12.28. Both the Popular Bank and Hellenic Bank also fell by 10 cents and 24.50 cents to close at 12.89 and 5.45 respectively.

    [02] Klerides predicts continued growth

    By Athena Karsera

    THE HOUSE Finance committee yesterday convened to discuss the 2000 Budget on the day after the House adopted three 'emergency' tax proposals pending ratification of the full package.

    Members of the committee were told by Finance Minister Takis Klerides that financial forecasts for the next year were positive.

    He said this year's estimated 4.5 per cent growth in real terms was expected to carry on into next year, that unemployment was expected to remain at 1999's 3.5 per cent and that inflation would rise only slightly.

    The minister added that inflation would depend on the adoption of his tax measures and any subsequent rise in state income.

    Klerides also discussed the government's planned development policy with the Committee: "While preparing the programme, emphasis was given on embarking on and completing large construction projects, especially demolitions and road-works," he said.

    Klerides said these sectors made up 29 per cent of development policy expenses and that attention would also be given to research programmes and the development of services.

    He told the Finance Committee that efforts were being made to keep public sector salaries in check while the Budget was being prepared. The public sector wage bill has been partly blamed for the government's yawning budget deficit.

    Diko deputy and Committee member Tassos Papadopoulos asked how the government planned to achieve this, when a total of 60 million was usually needed as a supplement to annual budgeted costs for fixed increases and salary adjustments.

    Papadopoulos said this 60 million did not include the hiring of new staff or non-uniform pay rises.

    Discussion on this issue is set to continue at the Committee's coming meetings.

    Meanwhile, the small New Horizons party, which is not represented in parliament, yesterday expressed its dissatisfaction at Thursday's adoption of the three "urgent" bills on higher fuel prices, four-wheel-drive vehicles' import tax and alcohol duty.

    The higher duties are expected to add 17 million to state coffers in an effort to combating the 640 million public deficit.

    New Horizons party said yesterday they found the new tax measures "unfair, antisocial and unbalanced as they are focused on indirect taxes that affect the lower income classes."

    Comparing the public sector to a patient, the party said the measures were a "clumsy treatment... with medicines that have serious side-effects."

    The new laws were adopted immediately after their discussion by the House Finance Committee. They provide for an immediate two cent per litre rise in diesel and petrol prices, a 20 per cent rise in import duty on off-road vehicles and a tax rise of 50 cents per litre of pure alcohol.

    In a nod to environmental awareness, the increase in fuel tax will not affect unleaded petrol.

    TO offset the fuel increase, Klerides on Thursday said the government was set to up its electricity subsidy by about 2 million to help keep bills low.

    Other political figures yesterday expressed their support for Klerides' package.

    House president and opposition Diko party leader Spyros Kyprianou said his party had been convinced the tax rises were necessary.

    Speaking during a visit to Paphos, he noted that if they proved an error of judgement the House was in its right to change the law.

    Chief EU negotiator George Vassiliou said the rise in fuel taxes had brought Cyprus a step closer to the EU.

    Speaking at the airport on his way to an official appointment in Greece, Vassiliou said the two cent per litre rise would bring prices only five cents short of Europe' lowest permitted prices.

    "We were seven cents away from the lowest price of petrol used for transportation in Europe so the two cent rise makes this gap a bit smaller."

    [03] Tax hike hits 4x4 importers

    By Amanda Harley

    SOME car dealers in Nicosia were thrown into confusion yesterday by the 20 per cent tax increase on four wheel drive jeeps.

    Anyone with cash to burn and a craving for a four by four saloon would have had a hard time trying to get a price out of the salesmen.

    One dealer believed that the tax increase did not come into effect until the new year, while another said they could not sell any jeeps until after the weekend because the prices had yet to be worked out.

    Those dealers who had sat down with a calculator and done their home-work were less than impressed with the results.

    Demetris Lefkaritis from Lefkaritis Brothers Ltd in Nicosia was very disappointed by the tax increase. "I believe that the Minister of Finance should see things in a wider perspective. With these measures he will not receive as much money as he hoped, but will only succeed in increasing the other importers' sales."

    With the tax on double-cabin pick-up trucks standing at only 10 per cent Lefkaritis believes people will buy them instead of the four wheel drive jeeps.

    The price of a Grand Cherokee V8 from the Lefkaritis showroom would have cost 42,000 on Thursday. Today it is a staggering 45,500.

    Filling the 75 litre tank capacity with petrol at a two cent per litre tax increase will further lighten the pocket of the potential buyer.

    He said: "Everybody importing four wheel drive saloons will be hit, but we will be hit very badly because we only sell four wheel drive saloons."

    [04] Tsangarides re-arrested after court release

    POLICE late last night re-arrested former Disy organisational secretary Andreas Tsangarides. He was expected to be brought to court some time today.

    Tsangarides had been set free yesterday afternoon by the Nicosia District Court, after police had failed to provide adequate evidence to secure his remand.

    He had been arrested earlier in the day in connection with the investigation into the supply of illegal residence and employment permits, but the court rejected a request by police for his remand.

    The police told the court that they suspected Tsangarides on three charges -- conspiracy to commit a crime concerning the illegal employment of foreigners, actions which facilitated the illegal employment of foreigners and enticing a public official to abuse his position.

    Tsangarides' defence, however, objected, stating in court that the police arrest warrant had only charged their client with facilitating the illegal employment of foreigners. The court accepted the objection by the defence and threw the other two charges out.

    The prosecution then requested Tsangarides' remand for three days on the remaining charge, while the defence asked for the case to be thrown out altogether. The court rejected the prosecution's case, and Tsangarides was set free.

    Tsangarides is just one of a number of prominent public figures who have come under investigation for alleged involvement in the residency permits scam. Tsangarides had alleged that Cyprus President Glafcos Clerides himself was linked to the illegal permit scam. The allegation was strongly refuted by Government Spokesman Michalis Papapetrou.

    He claimed that Clerides had, during a top-level Disy meeting, described a top immigration officer as " difficult". Tsangarides said the president had meant that the officer had refused to bend the rules to serve those in power.

    Immigration chief Christodoulos Nicolaides was arrested last Friday in connection with the case, as have several senior police officers. Charalambos Anastassiades, the twin brother of Disy boss Nicos Anastassiades, has been arrested on suspicion of involvement in producing fake permits.

    [05] Akel warns against talks for talks' sake

    By Athena Karsera

    AKEL leader Demetris Christofias yesterday warned that settlement talks for their own sake would be worthless, though he admitted that the Greek Cypriot side had to make clear its willingness to take part in any resumption of negotiations.

    Speaking after a meeting with President Glafcos Clerides, the communist opposition leader said the President had informed him about developments in the Cyprus problem following the recent visit of US presidential emissary to Cyprus, Alfred Moses.

    Christofias said the island had to make clear its intention to take part only in unconditional talks based on UN Resolutions.

    He said the international community had to realise that talks based on Turkish Cypriot leader Rauf Denktash's demands would be fruitless.

    Christofias said that Cyprus' next steps would be discussed by the National Council and that decisions should not depend only on US initiatives.

    "We cannot wait for Moses to return, if he returns. Moses has to tell the US government about Denktash's intransigence, and the US, as a permanent member of the Security Council which plays such an important role in international conditions today, must not put pressure on the UN Secretary-General to call for talks just for the sake of talks."

    But governing party Disy chairman Nicos Anastassiades said yesterday that as long as the process was on-going, the less said about negotiations the better.

    In Washington, State Department spokesman Jim Foley said the US envoys to Cyprus still had a lot of work to do to bring the Greek and Turkish Cypriot communities back to the table.

    Commenting on Moses and Cyprus Coordinator Thomas Weston's recent visits to the Athens, Ankara, Nicosia triangle during his daily press briefing, Folley said: "Our goal remains to get the two sides into negotiations without preconditions under UN auspices as called for by the G8 and the UN Security Council resolutions 1250 and 1251."

    US National Security Advisor Sandy Berger, meanwhile, yesterday told the New York 'Council of Foreign Relations' that the US had to continue its "peacemaker" role and seize an important opportunity to assist with a "reconciliation in Cyprus" in 2000.

    In a separate development, Italian parliamentarians yesterday called on their government to back Cyprus' EU accession irrespective of a solution to the Cyprus problem being found.

    The deputies also urged Rome to support the resumption of UN Resolutions based on negotiations.

    An official press release issued in Cyprus said that a resolution adopted by the Italian House Committee on Foreign Affairs said that tension on the island was due to "the continuing military occupation of the island's northern areas and the subsequent division of the island."

    The statement said that the Turkish Cypriot demand for recognition of its illegal regime was "an obstacle to peace."

    The resolution then went on to call on the Italian government to support Cyprus' EU accession provided it complied with the agreed norms and regulations applying to all candidate countries.

    The resolution was adopted after a visit to Cyprus by an Italian parliamentary delegation earlier this month.

    [06] Exploding pressure cooker warning

    THE CONSUMER Protection Service and Commerce Ministry yesterday warned the public not to use a particular brand of pressure cooker.

    According to an official announcement, the dangerous pots have a paper label on their side with the word "Speedy" written on them and have "Omega - Made in Italy - Inox 18-10" engraved on the base.

    The announcement said that the particular make had been withdrawn from the market in 1995 following a series of accidents caused by exploding pressure cookers.

    A spate of recent mishaps had sparked fears that the previous warnings had been ignored, the statement continued.

    "From the end of March 1999 until recently, the Consumer Protection Service has been informed of two more explosions of the same type of pressure cooker."

    The announcement said that extensive damage had been caused by the recent explosions, "but luckily only slight injuries were caused."

    [07] Anger as sea lion whisked away to Russia

    Anthony O. Miller

    WITH what looked like unseemly haste, the sea-lion that was slowly starving to death at the now-defunct Ayia Napa Marine Park, was yesterday spirited out of Cyprus aboard an Aeroflot flight to Moscow by its mysterious Russian owners.

    Animal-rights advocate Anna Solomonidou was arrested on the Larnaca Airport tarmac after breaching police lines and approaching the Aeroflot airliner's cargo bay to try to block loading of the sea-lion. She was later released by Larnaca Police.

    "There is no way to bring it back, because the ownership belongs to a Russian institution," Attorney-general Alecos Markides conceded yesterday. "Therefore we notified Interpol in Moscow... to follow the animal, to tell us where it goes, and then we can communicate (with Moscow) according to our own position, to see if there is anything we can do about it," he said.

    The sea-lion was flown out of Cyprus after three state veterinarians stated in writing this week "that the condition of the animal was excellent, that it was fit to travel," Dr Pavlos Economides, Veterinary Services Department Director, said.

    Certification of its fitness to travel appeared superfluous, however, since Economides insisted that Cyprus law did not give him the power -- even if the animal had been too weak to travel -- to declare it unfit to travel, and thereby block its export.

    However, several environmental experts -- including British marine biologists Alan Knight and David Higgs -- said Economides, as "the relevant authority", could declare an animal too weak or ill to travel, confiscate it and block its export.

    An outraged Cyprus Green Party yesterday charged officials of collusion with the sea-lion's Russian owners and called for Economides' dismissal for "covering up or providing cover for the Russian owners of the sea-lion, which was starving at Ayia Napa Marine Park (ANMP) for the planned operation to ship it out of Cyprus".

    Economides said that when "we had information that this animal was going to be moved by its owners to Russia... I put it in writing (on Thursday) to the Attorney-general... asking him whether I could stop the Russians from exporting it." Economides claimed Markides said that "in accordance with our law we couldn't take any measures (to block the export), so he took some measures. I don't know what they were."

    Markides said yesterday: "I didn't know that they were going to export the animal today" until he got a call from House Environmental Committee Chairman Demetris Eliades, telling him it was about to be loaded onto an aircraft at Larnaca Airport. "The only way I could stop the export was to make (the sea-lion) an exhibit in a police investigation" into whether it had been mistreated at Ayia Napa Marine Park, Markides said.

    "We asked the police to intervene about 12 o'clock," he said, when he "thought of this device of ordering the police to investigate the (sea lion's) possible condition and keep the animal in Cyprus under a different law, which has nothing to do with Mr Economides."

    "But by the time we did that it appears that before the police were aware of the whereabouts of the animal, the animal was loaded into the plane," Markides continued. "The police officer (at Larnaca Airport) called me to say it's loaded into the plane and it's about to take off in about five minutes... There was no lawful way to stop the airplane from taking off," he said.

    "Of course, I am upset," Markides said. "My opinion was that it should remain in Cyprus as an exhibit in the course of a police investigation, which I ordered." And he added: "It's not my fault, it's not the police's fault. The police did everything possible" to block the export.

    Besides calling for Economides' head, the Green Party urged Agriculture Minister Costas Themistocleous to see if the veterinary chief was guilty of any breach of the law for assuring them, Eliades' committee and Markides that the sea lion was being cared for.

    They alleged his assurances were merely "creating the circumstances in which the creature's owners, and the ones responsible for the deaths of the four dolphins and the one other sea-lion (at ANMP), could get the sea-lion out to Russia, where it is expected to be rented to another dolphinarium."

    All four Bottlenose Dolphins and one of two sea-lions that Ayia Napa Marine Park imported in 1994, through the 'Russian Academy of Science' -- a business that captures sea animals and sells them for huge profits to animal parks -- died there.

    "I'm absolutely staggered at the lack of professionalism of the veterinary services," marine biologist Alan Knight told the Cyprus Mail yesterday by phone from an animal welfare conference in Sofia, Bulgaria.

    "I think that they are totally without any regard for the animal's well-being. They've gone ahead and actually transported this animal to its death," claimed Knight, who two weeks ago spent nearly a week in Cyprus with two other British marine biologists who, along with state vets, agreed the sea-lion was near death.

    Knight and his experts, after providing Economides with scientific reports on the animal's critical condition, provided a feeding and vitamin regimen to restore it to health.

    They also volunteered to return to Cyprus to nurse the sea lion back to health, if Economides agreed to confiscate it under Cyprus law and transfer it to the Ocean Aquarium in Protaras, which offered its facilities to help heal the sea-lion.

    "Basically this is a really black day for Cyprus," said Knight. "Not only have they put this animal to death now, but they also stood by and watched four dolphins and the other sea-lion die. I feel totally and utterly disgusted with the veterinary department."

    © Copyright Cyprus Mail 1999

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