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Cyprus Mail: News Articles in English, 00-02-22

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

From: The Cyprus Mail at <>

Tuesday, February 22, 2000


  • [01] Blunt warning on VAT
  • [02] Police probing stock market fraud allegations
  • [03] Britain decides on Episkopi asylum seekers
  • [04] Larnaca residents in desalination demo
  • [05] Athens disappointment keeps market down for second day
  • [06] Lyssarides: ‘I had to give them a lesson in respect’
  • [07] Police take three hours to find Limassol bomb site
  • [08] Government concern over Cook statement

  • [01] Blunt warning on VAT

    By Athena Karsera

    THE GOVERNMENT yesterday warned it would have to cut spending and halt development plans if the House does not approve a rise in Value Added Tax (VAT).

    Finance Minister Takis Klerides told the House Finance Committee that the government would not go further into debt to compensate for the rise being rejected.

    "We have already committed ourselves not to borrow more than we planned. (If the House blocked the rise in VAT) we would have to further limit funding provided in the budget -- whether for works or any other expenses -- funding that we already tried to cut down before bringing the Budget to the House."

    The government is already having to dig further into its budget deficit to subsidise petrol imports after parties made clear last week they would vote down any attempt to raise pump prices. The government must bring down its budget deficit if it is to meet the Maastricht criteria for the European single currency.

    Klerides made the statement yesterday in response to a question by Committee member and Diko deputy Tassos Papadopoulos.

    He said that if the House approved the rise from eight to 10 per cent, the government's income would increase by £60 million per year.

    Klerides also told the Committee that the government would introduce compensation measures for the lower income groups.

    The Minister said this would take the form of £18 million tax relief along with a package of social measures totalling £15 million.

    Klerides also gave assurances that the zero per cent VAT on food would remain in force until Cyprus became a full member of the European Union (EU).

    Cyprus must raise its VAT to 15 per cent by the time it joins the EU. The proposal for an initial raise to 10 per cent has been before the House since last October.

    To soften the blow, Klerides said the government would be prepared to scale down its proposed July 1 road tax increase from 35 per cent to 25 per cent.

    "My intention is to suggest that since inflation has risen since the last time the tax was raised by 35 per cent, the 35 per cent be lowered... For one reason or another, either because it was not approved by the House or because the government was late in putting it forward, it is now a big jump to 35 per cent."

    Klerides also told the committee that the government would reintroduce a three per cent tax for the provision of tourism services from November 1. The tax is seen as essential to fund the Cyprus Tourism Organisation, whose budget deputies refused to approve last month. It had been scrapped in an effort to compensate the tourist industry from the loss of business suffered during the Gulf War.

    The minister added that VAT on hotel bills would be decreased to five per cent from the current eight in order to protect the industry.

    The Finance Committee will resume discussion on the tax proposals at its next meeting.

    Tuesday, February 22, 2000

    [02] Police probing stock market fraud allegations

    POLICE are investigating thirteen cases of suspected fraud relating to stock exchange transactions.

    "The financial fraud squad has had 13 cases referred to it relating to violations of the stock exchange law," police spokesman Glafcos Xenos said yesterday.

    Xenos said brokerages were implicated in some of the alleged fraud cases.

    He also said five of the cases had cropped up since January 1.

    Reports and rumours of shady and fraudulent dealings on the local market have been rife in recent days. On Friday, Justice Minister Nicos Koshis suggested the Russian mafia were using the market to launder their ill- gotten gains.

    Last year, police arrested a computer salesman who allegedly held court at a luxury hotel promising investors positions in lucrative private placements of non-existent firms.

    Xenos said yesterday that six of the cases under investigation were referred to police by the council of the stock exchange.

    Four of the probes were launched after complaints from private individuals.

    The Fraud Squad has already forwarded files on three of the cases under investigation to the Attorney-general's office. Fraud squad officers were still collection evidence for eight other cases, Xenos said.

    Two other cases had been thrown out for lack of evidence, the police spokesman added.

    Tuesday, February 22, 2000

    [03] Britain decides on Episkopi asylum seekers

    By Martin Hellicar

    AFTER 16 months' detention, 34 Arab boat people were yesterday told they faced deportation from the British base of Akrotiri.

    The 34 (33 Iraqis and an Egyptian) were among 75 men, women and children who arrived at Akrotiri in a leaky fishing boat on October 8, 1998.

    Their appeals for refugee status have been rejected by Britain.

    Thirteen others were yesterday told they had secured refugee status from the UNHCR.

    "The 34 will be deported at the earliest opportunity," Bases spokesman Rob Need said yesterday, adding that they would have no right to appeal against the decision.

    Negotiations are now under way to see if the Iraqis can be sent back to Lebanon from where they embarked, because Britain cannot send them back to Iraq.

    "We have a duty to ensure these people are deported somewhere safe," Need said. Britain has no diplomatic relations with Iraq.

    The deportation of the Egyptian should prove simpler and was to be carried out immediately.

    The only one of the original 75 boat people whose fate still hangs in the balance is a Sudanese national, whose appeal for refugee status is still pending.

    Since October 1998, the 75 illegal immigrants have been detained at the Episkopi garrison, West of Limassol.

    The original number swelled to 79 as four children were born in detention.

    Ten of the boat people went home voluntarily and the rest applied for refugee status. Two others were released to the care of the Cyprus government, which granted them refugee status.

    Nineteen were granted refugee status by Britain a few months back. The 19, including eight children, were given welfare benefit and housing at Dhekelia garrison in Larnaca.

    The 13 granted refugee status yesterday will receive similar treatment. They are seven Syrian Kurds, two Ethiopians, an Egyptian and three Iraqi Kurds.

    Those granted refugee status can leave the base area but Need suggested they would chose to stay in the accommodation provided by the British government. Need said the bases would try to secure Cyprus work permits for those granted refugee status.

    The 75 were originally dumped under the cliffs of Akrotiri RAF base.

    Cyprus has repeatedly complained that Lebanon does nothing to stop unscrupulous operators charging illegal immigrants for an unsafe passage to Europe only to dump them in Cyprus.

    Tuesday, February 22, 2000

    [04] Larnaca residents in desalination demo

    By Martin Hellicar

    SOME 120 Larnaca residents staged an angry demonstration at the building site for the island's second desalination plant near the town's salt lake yesterday lunchtime.

    The demonstration - organised by the Larnaca municipality and the local development committee - was the latest show of protest against state plans to tackle the island's chronic water shortage by building more desalination plants.

    The protesters - mostly secondary school children skipping class - reportedly pulled down fencing around the construction site.

    But police said the demonstration had been incident-free.

    The demonstrators were bussed to the site - south of the airport and a few hundred yards from the salt lake flats - by the Larnaca municipality and development committee. The two bodies insist the desalination plant will destroy the salt lake ecosystem and should be located elsewhere.

    Larnaca mayor George Lycourgos - who has spearheaded protests against the plant - said the state was guilty of ignoring its own designation of the area a protected zone.

    "The government itself has approved the Larnaca Development Plan which contains special provisions banning the building of industrial and other units in the specific area," Lycourgos insisted. "And yet, this same government has approved, in violation of its own decisions, the location of the desalination unit at the salt lakes."

    "The government could solve the water supply problem in many other ways, and not by destroying the protected salt lake wetland ecosystem," the mayor added.

    The Green Party, another vociferous opponent of desalination plants, yesterday claimed the government Fisheries department and Environment service had both advised against siting the plant near the salt lake.

    Larnaca municipality has lodged an appeal with the Supreme Court over the Larnaca District Court's refusal to grant an effective injunction against the building of the desalination plant. An injunction secured from the local court late last year could not be enforced because the name of the contractor had been misspelt.

    Work on the salt lake plant, which began late last year, is proceeding apace.

    Government plans to expand desalination to solve the island's growing water shortage problem have met with stern local opposition at every turn.

    Plans for a plant at Zakaki have so far been blocked by the vociferous protests of local residents in the Limassol suburb. In the wake of the protests, the House of Representatives recently refused to approve funding for the Zakaki plant.

    Similar protests scuppered plans for a plant at Ayios Theodoros in the Larnaca area.

    Despite fast-dwindling dam reserves and President Clerides' vow personally to sort out the desalination impasse, the government appears loathe to face down the Zakaki protestors.

    A final decision on the matter was expected from a meeting of ministers and water experts chaired by the President on Friday.

    But Agriculture Minister Costas Themistocleous announced after the emergency meeting that the decision had been put off till tomorrow's cabinet meeting.

    He said the government had had last-minute offers from Paralimni municipality and the Electricity Authority (EAC), who were suggesting plants be sited at Paralimni and by the new power station at Vassiliko. Time was needed to look at these options, the Minister said.

    Themistocleous is the main proponent of the desalination solution.

    The House Environment Committee has heard that Themistocleous even gave instructions for work on the Larnaca plant to begin before Town Planning permission had been secured.

    The island's only existing desalination plant is at Dhekelia.

    Dams currently hold only about half as much water as they did at the same time last year.

    Tuesday, February 22, 2000

    [05] Athens disappointment keeps market down for second day

    By Michael Ioannou

    THE STOCKMARKET continued its slide into negative territory yesterday as disappointment lingered among investors at delays in listing the Bank of Cyprus stock in Athens.

    Shares sank 3.53 per cent on the back of a strong sell-off in Bank of Cyprus shares, which slipped 41 cents to £9.69 on a volume of 472,800 shares, topping volume ranks for the day.

    But the decline was broad-based, with investment stocks leading laggers and shedding 5.12 per cent, followed by bank and tourism stocks, which lost 3.9 and 3.10 per cent respectively. Only insurance shares managed to end marginally up by 0.7 per cent.

    The market opened at 618.39, 22 points lower than Friday's closing level. It managed to narrow the losses for most of the session, but turned south again just before the bell, hitting a low of 616.98 before climbing to a close of 617.55.

    Turnover fell to £19.4 million on 3,620 deals.

    Seventy-eight of 93 securities traded moved lower.

    Traders reported that investor sentiment was still dented by Bank of Cyprus's announcement on Friday that it was planning to list its share on the Greek stock market in May instead of March, as initially expected.

    And yesterday brokers speculated that the May date was also tentative.

    "We didn't hear the bank chairman say that the Greeks had given a date. He wasn't at all confident about that and that showed up very clearly," said an analyst present at a bank briefing for brokers on Friday morning.

    Traders said the Bank of Cyprus announcement could be interpreted in a variety of ways. One reason the price of the stock has not surged since Friday is because the good news -- a doubling of net and pre-tax profit – had already been priced in.

    "It is usually bad news that people look at," said a trader.

    A majority of brokers and analysts said they regarded the results as excellent.

    In spite of repeated assertions from Bank of Cyprus and from brokers that the listing date debut on Athens is irrelevant, the stock came under further selling pressure yesterday.

    There was also a resurfacing of rumours that there were problems in the underwriting of the issue and its pricing.

    The bank has persistently denied the rumours.

    Bank chairman Solon Triantafyllides said on Friday the reason the issue was not underwritten was because it was not required. He also dismissed speculation floating on the market for weeks that Greek institutional investors consider the stock expensive at current levels.

    Tuesday, February 22, 2000

    [06] Lyssarides: ‘I had to give them a lesson in respect’

    By Athena Karsera

    CONTROVERSY shadowed the newly formed Social Democratic Movement yesterday, with the resignation of a senior member and leader Vassos Lyssarides saying he had been misinterpreted during a passionate Sunday address.

    The movement, launched at the weekend, is a merger of Socialist Party Edek and the tiny Renewal Movement.

    Lyssarides said yesterday he had been misunderstood after comments he made were interpreted as suggesting party members were being paid to remove him from the political arena.

    On the last of the new party's two-day founding symposium, an emotional Lyssarides said many people would like to see him removed from political life and that those within his party that could achieve this would be rewarded by his opponents.

    Lyssarides said yesterday he did not mean members of his party were being paid to get rid of him.

    "What I did say was, `Who would be happy today about Lyssarides being absent from Cyprus' political life during this difficult time?' Some people who have bad plans for Cyprus. So these people will be so happy they would give you money and medals. I did not say that they had taken money."

    Lyssarides also suggested that the public take another look at his statements and gave a rundown of the events leading up to his statements.

    He said 900 "crying" symposium attendants had asked him to be the new Movement's president and that only two "young" attendants had asked for a specific date for him to step down from the party's leadership.

    Lyssarides said he would usually have ignored such a demand by such an insignificant minority of members but had felt obliged to hit back with the controversial comments, "just to give the young a lesson on principals and respect."

    Lyssarides said he had offered to submit his resignation as leader but had been persuaded to stay on at least until the party was secure.

    He said that if the new party progressed well, he would consider resigning even before the next parliamentary elections in 2001.

    Lyssarides said he did not believe the new party had been damaged by his statements.

    One party member, however, yesterday resigned in anger at the calls for Lyssarides to stand down.

    Andreas Seismanis said yesterday what had happened on Sunday was the culmination of a long-simmering dispute.

    "I heavily feel the need (to resign) as a historical member of Edek and in the in the name of our struggle for freedom, democracy, peace and social justice... and in expression of my intense dissatisfaction on what was said at the founding meeting," Seismanis said.

    He said he was turning his back on a mentality that had arisen within the party and allowed new members to question its president.

    On hearing of Seismanis' resignation, Lyssarides told CyBC: "I will speak to him. He is a poet, he is emotional."

    Former Defence Minister and party vice-president Yiannakis Omirou yesterday said Lyssarides’ statements had been due to emotional overload.

    He was echoed by deputy Takis Hadjidemetriou, who said Lyssarides had been in emotional overdrive, adding politicians were human after all.

    "It was a heavy atmosphere... we should not forget that (party) leaders also have their human moments, their human strengths and weaknesses."

    Tuesday, February 22, 2000

    [07] Police take three hours to find Limassol bomb site

    POLICE were yesterday investigating a mystery bomb blast in Limassol that does not seem to have caused anyone to lose any sleep.

    Police said a loud explosion rocked the Enaerios area of the city at around 6am on Sunday, but were not able to find the site of the blast until 9.15, when someone finally reported it.

    A resident of the Aretousa apartment block on Kerkyra Street called police after noticing a wrecked car in the building's parking lot when he woke up.

    The bomb squad rushed to the scene. They found that a homemade high- intensity device placed on the front of the car had caused the blast.

    The car belongs to 25-year-old Natalia Prakhou from Russia, but was registered to Andreas Constantinou from Pano Polemidia in Limassol.

    Prakhou told investigators she had bought the vehicle from Constantinou but had not yet transferred the ownership.

    Tuesday, February 22, 2000

    [08] Government concern over Cook statement

    BRITISH Foreign Secretary Robin Cook has raised Nicosia's heckles by implying there could be no freedom of movement in Cyprus until Turkey joined the EU.

    Government Spokesman Michalis Papapetrou yesterday reacted tersely to statements Cook made in the House of Commons on February 15.

    Cook's statements were only publicised in Cyprus yesterday.

    Replying to a question on the Cyprus situation, the Foreign Secretary told the Commons: "Freedom of movement between the Republic of Cyprus and the occupied northern sector would apply only if Turkey simultaneously joined the European Union."

    Papapetrou insisted the position expressed by Cook was wrong.

    "We disagree with this opinion and we will with every opportunity convey and make clear our position till we persuade of the erroneousness of this approach," the spokesman told his daily briefing.

    "Our position is that the issue of freedom of movement is a basic human right and must definitely be a part of any settlement. It also cannot depend on the accession of any country to the EU," Papapetrou said.

    The spokesman made it clear the government would make its position on the issue clear to the British High Commissioner in Cyprus, Edward Clay, but stopped short of saying an official protest over the Cook statement would be lodged with the British government.

    © Copyright Cyprus Mail 2000

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