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Cyprus Mail: News Articles in English, 01-02-25

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

From: The Cyprus Mail at <>

Sunday, February 25, 2001


  • [01] Cyprus credit rating remains 'negative'
  • [02] Akamas poll gives greens the blues
  • [03] Bishop in new 'he's gay' charges against Limassol colleague
  • [04] A fistful of lira: how the Turkish Cypriots are coping with the latest crisis
  • [05] Klerides acknowledges need for competitiveness
  • [06] News in Brief

  • [01] Cyprus credit rating remains 'negative'

    By Anthony Fairfax

    MOODY'S, the international credit ratings agency, has maintained Cyprus' international credit rating at the so-called 'A-2/P-1' level, described by the firm as “negative” last May when the rating was first made.

    At the time, Moody's said that downward appraisal was based on the country's “lack of clear progress in bringing the fiscal debt under control, the rapid extension of bank credit, and rising external debt”.

    Those factors have not changed.

    While acknowledging the country's moderately high per-capita income, its manageable public debt and the likelihood that it will join the EU in the next accession round, Moody's notes the continuing budget deficit, along with other problems in the economy.

    “Constraints on the [credit] rating include a dependence on tourism for foreign exchange revenue, declining competitiveness, and a significant deterioration in the budget and external finances that could endanger economic stability,” Moody's said.

    The agency says that the government has not been successful in implementing a proposed economic reform plan aimed at reducing the national budget deficit, adding that “delays in legislating the associated tax changes probably make this year's fiscal targets unattainable and throw the next two years into doubt”.

    While the government did manage to negotiate a two per cent increase in the value-added tax rate last May, it will prove of little value to the economy, Moody's says, since “the revenue raised from the increase will be fully offset by tax concessions that were granted to break the legislative deadlock”.

    Moody's sees the gradual deregulation of the financial system, including the removal of inward and outward capital controls, as crucial not only to comply with EU accession requirements but also to increase the market orientation of banks' lending decisions.

    Like other agencies, Moody's has identified some particular challenges for the commercial banking sector, among them the instability of the Cyprus Stock Exchange.

    “Increased competition and tax harmonization, however, are likely to pose additional problems for the asset quality of banks and other financial institutions, particularly given rapid credit growth and stock market volatility.”

    Moody's is the second ratings agency to have expressed concerns over potential instability of the Cyprus economy and, in particular, the potentially destabilising effects of the CSE.

    The Fitch agency commented on Thursday about the effects of a volatile CSE on the Bank of Cyprus, saying that “this volatility has had an impact on BOC's income, and may also affect underlying collateral values and, thus, asset quality”.

    Finance Minister Takis Klerides last week denied that the country had any problem over the national debt.

    “We are starting to be a bit more aggressive on our future plans and we are thinking perhaps we could convert the fiscal deficit into a surplus. Not in the next couple of years,” he told Reuters, “but possibly in 2003 or 2004.”

    Klerides said the government's fiscal consolidation programme had cut the national deficit by 1.1 per cent from its start in 1999 and that he expected a further fall of 0.5 per cent as a result of the expected two- point increase in VAT.

    Copyright Cyprus Mail 2001

    [02] Akamas poll gives greens the blues

    By Martin Hellicar

    A RECENT Akamas opinion poll is depressing reading for those who have fought to see the remote peninsula protected as a wilderness with strict limits on tourism development.

    The poll, carried out by Cypronetwork for ANT1 television, suggests most people feel a controversial cabinet plan to allow “mild” development on the peninsula is rather too restrictive. It also confirms staunch support for tourism development among Akamas area residents.

    The cabinet plan -- announced on March 1 last year and immediately slammed by environmentalists as a sell-out to developers -- suggests the already protected Akamas state forest be kept free of buildings, with “mild and controlled” tourism development being allowed elsewhere on the pristine peninsula. The cabinet did not define “mild and controlled” at the time, and neither has any government official done so since.

    If the cabinet plan was bad news for conservationists, then the form of Park backed in the Cypronetwork survey is an environmentalist's worst nightmare.

    The recently released survey, which covered 1,000 people over 18, suggests 50 per cent support for “mild” tourism development being also permitted on private plots within the Akamas state forest. A further 23 per cent of those polled expressed support for unhindered tourism development beyond the confines of the state forest. Close to half of those asked said an Akamas park should include tarmac roads and picnic sites, a real no-no for conservationists.

    Local and foreign green groups say Akamas - with its turtle-nesting beaches, rare maquis vegetation and dramatic scenery - should be preserved in its current, unspoiled, form. They say tourism development should be restricted to within existing village boundaries, as recommended in a state- commissioned and parliament-approved 1995 World Bank report. The March 1 cabinet decision sidelined the World Bank plan, despite President Clerides' promises it would be stuck to.

    The new poll was not all bad news for greens. It did largely confirm the widespread support for an Akamas National Park identified by earlier opinion polls.

    Some 85 per cent of those asked named Akamas as the most environmentally sensitive area on the island, though the survey also put preservation of Akamas low on the public's list of environmental priorities, in eighth place behind waste management and beach cleanliness.

    The Cypronetwork poll also looked at the feelings of 350 Akamas area residents, confirming local support for tourism development.

    Just over half of those polled supported unrestricted development outside the state forest area. Fully 70 per cent of Akamas area villagers want a National Park with surfaced roads and picnic sites. Over half - 52 per cent -- of those asked want development on the protected Lara and Toxeftra turtle-nesting beaches. Some 64 per cent of local villagers opposed environmentalists and their wishes for Akamas.

    The poll also found that Akamas residents feel neglected by the government, with 90 per cent of those polled saying their area got less state development aid than others.

    The depressed local communities feel frustrated by the lack of movement on the National Park issue.

    The government promised to designate Akamas 15 years ago but has since been caught between two posts in an effort to please villagers' development aspirations and environmentalists' desire for conservation.

    The EU has also expressed support for the protection of the area.

    The March cabinet decision was presented as the government's final word on the issue, but a final plan for implementing it, which was meant to be ready by last June, has yet to materialise.

    Interior Minister Christodoulos Christodoulou last month promised the final blueprint would be ready by the summer, a year late.

    Meanwhile, environmentalists continue to campaign to get the government to scrap the March decision in favour of a more protective Akamas plan while local villagers push for tourism development to win the day.

    Copyright Cyprus Mail 2001

    [03] Bishop in new 'he's gay' charges against Limassol colleague

    By a Staff Reporter

    BISHOP Chrysostomos of Paphos yesterday resurrected his allegations that his Limassol counterpart, Athanassios, is a homosexual, cocking a snoop at last year's Major Holy Synod ruling dismissing such claims.

    Chrysostomos' latest outburst came after Athanassios appeared before the Nicosia District Court on Friday to testify against two Limassol archimandrites charged with conspiring to defame their Bishop by bribing men to say they had had sex with him.

    Chrysostomos, in an interview with CyBC radio, said the truth had “yet to shine” over the Athanassios issue.

    He rejected Athanassios' claims before the court that testimonies labelling him as gay were concocted. “These claims are not figments of my imagination, but are rather based on hard facts and real testimonies,” the Paphos Bishop said.

    Late last year, after long months of sordid claims against Athanassios, Archbishop Chrysostomos called overseas Bishops and Patriarchs to convene in Nicosia for only the second Major Synod ever on the island.

    The Major Synod examined the evidence against the Limassol Bishop and threw it out, but did not look into claims that the Paphos Bishop had led a conspiracy to oust his Limassol counterpart.

    Limassol Archimandrites Andreas Constantinides and Chrysostomos Argyrides found themselves in court after two men said they had been bribed to tell a local church probe that Athanassios was gay.

    Chrysostomos of Paphos yesterday took particular exception to Athanassios telling the court on Friday that he had forgiven Constantinides and Argyrides.

    The Paphos Bishop said Athanassios was obviously “lacking clear thought and honesty” and was guilty of a “show of false humility”.

    He said Athanassios' statement of forgiveness was blatantly “populist”.

    Copyright Cyprus Mail 2001

    [04] A fistful of lira: how the Turkish Cypriots are coping with the latest crisis

    By Jennie Matthew

    THE MOOD was bleak on the streets of northern Cyprus yesterday - day three of the Turkish hyperinflation craze that has dragged the north into its black hole of spiralling debt and wiped out savings.

    Between Thursday morning and Friday lunchtime, the lira nose-dived 37.9 per cent. At one point it was trading as low as TL1.25 million to the US dollar. Yesterday, sterling sold at TL1.13 million; the US dollar at TL1 million.

    As a meeting got under way yesterday lunchtime in Ankara to assess the damage, the grim reality was etched across almost everyone's face in Kyrenia yesterday.

    The shops may have been open but they were deserted, despite brash 'Sale' advertisements in the windows.

    One shoe shop window sported a pair of knee-high (fake) suede boots for TL10 million.

    Further up the street, children's Pokémon sweaters were advertised for TL5 million. The petrol station on the outskirts of Kyrenia was selling super and unleaded petrol at TL6.5 million a gallon.

    Two jewellers slumped over their window display, peering miserably out of the window as uninterested customers walked past outside.

    Kyrenia's brand new, ultra modern and ultra chic designer cosmetics and perfume store was empty.

    In one supermarket, a woman told me she was doing her monthly shopping now, after prices had nearly doubled over night.

    “I suppose everyone's worried. The problem is that so many debts are owed in dollars and sterling. So the prices jump up,” said one lawyer who didn't want to be named.

    He said he has increasing numbers of cases from people unable to pay their debts.

    The taxi driver didn't bat an eyelid in agreeing to a lower price to go to Kyrenia and back. Nine months ago, he would have laughed at me and held out for a wealthier tourist.

    Despite reports that foreign currency transactions had been frozen, tourists told the Sunday Mail that hotels and car-hire companies were charging them in sterling, to save both parties from the agony of erratic lira values.

    One newsagent gave out change in Republic of Cyprus currency. Another laboured over newspaper and calculator before handing over a fistful of lira banknotes. Souvenir photographs of Kyrenia -- advertised at TL1 million - were already selling at half price.

    The north is still shell-shocked by the banking crisis that erupted last November, leaving a trail of misery. By the side of the highway that snakes up from occupied Nicosia over the Kyrenia mountains, several telegraph poles are keeling over. A car lies abandoned on the intersection, and on the other side of the road a burnt-out bus has been left in a field.

    The skeletons of houses dot the central plain, building work having been abandoned.

    The Colony Hotel on the edge of Kyrenia stands in limbo, its ornate first floor near completion, but rubble piled up on the ground floor.

    What saving grace there is for the Turkish Cypriots comes from tourism. British couples ambling around the harbour were delighted yesterday at how well their holidays were going.

    Kyrenia restaurant and hotel owners were undeterred by the latest crisis. “Yes, the lira's down, but look at our tables: full with everyone from Europe. And the hotel's fully booked for next month,” said one happy proprietor, confident that his pockets would be well-lined, at least through the summer.

    Not for him the latest Internet joke circulating yesterday: what's the difference between the USA and Turkey? The USA has George W. Bush, Bob Hope, Stevie Wonder, and Johhny Cash. Turkey has Bulent Ecevit, No Hope, No Wonder, and No Cash.

    Copyright Cyprus Mail 2001

    [05] Klerides acknowledges need for competitiveness

    By Anthony Fairfax

    GLOBALISATION and the liberalisation of markets are rapidly changing the external environment of the Cypriot economy, leading to intensifying competition, Finance Minister Takis Klerides said this week.

    Rapid technological progress is shaping the new economy, he said, adding that unprecedented volumes of information are freely available, undermining any attempts to limit the free flow of knowledge.

    "It is obvious that the future prospects of the Cyprus economy critically depend on the degree of its responsiveness and adaptability to the changing conditions," he said.

    Klerides was apparently responding to claims by international credit agencies which have cited Cyprus' declining competitiveness among reasons for assigning the country a negative credit rating.

    In a statement, the Moody's agency said that constraints on Cyprus' credit rating included “a dependence on tourism for foreign exchange revenue, declining competitiveness, and a significant deterioration in the budget and external finances”.

    Referring to Cyprus' EU course, Klerides said that harmonisation with the European Union is the main priority of the government's strategic plan covering the period 1999-2003.

    He also said that the government hadopted a medium-term oriented fiscal consolidation plan, aimed at reducing the fiscal deficit and the creation of conditions of low inflation and low interest rate, which is being implemented with success and all intermediate targets have been achieved.

    "It is one of our main strategic objectives to satisfy all convergence criteria of the Treaty of Maastricht and join the Economic and Monetary Union soon after accession," he added.

    Klerides was speaking on Thursday at a symposium organised by Laiki Group in co-operation with the City University of London, on the 'Challenges and prospects at the Beginning of the Century'.

    Copyright Cyprus Mail 2001

    [06] News in Brief

    Road death

    A 37-year-old nightclub employee was killed after being hit by two cars while trying to cross Makarios Avenue in the Nicosia suburb of Latsia late on Friday night, police said yesterday.

    They said Simos Christofides was hit by two cars in quick succession and died instantly. The accident happened while Christofides was trying to cross the road outside the club where he was employed at about 10.30pm.

    Police are investigating the circumstances of what was the 13th road death this year.

    Bomb blast

    A homemade pipe-bomb exploded under a pickup truck belonging to a former policeman in the Limassol suburb of Kato Polemidia at about 3.15am yesterday.

    The blast caused extensive damage to the truck and to another car parked next to it, both belonging to the retired officer.

    Missing man

    Police were yesterday searching for an 80-year-old man missing from his Limassol home since Wednesday.

    Demetris Charilaou, known as Grivas because of his close resemblance to the late EOKA leader, is described as 1.67 metres tall with grey hair and a twisted moustache.

    Anyone who might have seen the missing octogenarian is asked to contact the nearest police station.

    Civil defence

    A Civil Defence search and rescue exercise passed without hitch in the sea near Kato Paphos yesterday, according to Interior Minister Christodolos Christodoulou.

    Volunteer rescue teams participated alongside the police air division and the local health services, using a helicopter, boats and an ambulance.

    Christodoulou announced that a civil defence control centre will be set up shortly at Polis, together with local volunteer rescue teams in the entire Paphos district.

    Copyright Cyprus Mail 2001

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