Cyprus Mail: News Articles in English, 98-06-21

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From: The Cyprus Mail at <http://www.cynews.com/>

Sunday, June 21, 1998

CONTENTS

[01] Back from the brink?

[02] Demirel to answer Stephanopoulos visit

[03] Brinkmanship and missiles bring down shares

[04] CY high fliers on Concorde pay

[05] Tourists want compensation for roof collapse

[06] TV stations slammed for breaking the rules

[01] Back from the brink?

WITH THE buzz of Turkish F-16s still ringing in the government's ears and the controversial deal to buy missiles from Moscow apparently cast in stone, western diplomats now fear the sabre-rattling over Cyprus could turn ugly.

"Once more the world's patience has been tested and there is no patience left - we have reached the point of no return," said sources close to the intercommunal talks of the recent overflights.

On Friday Foreign Minister Yiannakis Cassoulides tried to calm frayed nerves by announcing that no more Greek war planes would fly over Cyprus for the time being.

And President Clerides has also moved to lighten the crisis atmopshere by sending "concrete demilitarisation proposals" to UN Secretary-general Kofi Annan.

But is it all too little too late?

Tension on the island peaked dangerously high this week when four Greek F- 16s made their first official landing at the Paphos air base as part of the 1993 defence pact with Greece.

The Russian S-300 surface-to-air missiles are part of that same defence pact, and are likely to be deployed at the base.

In a tit-for-tat show of brinkmanship six Turkish fighter jets landed at Lefkoniko airfield in the occupied north on Thursday.

Even sources within the ruling party Disy believe the government has backed itself into a corner with little hope of a face-saving opt-out clause on the missile deal.

"There is no light at the end of the peace negotiation tunnel. Greco- Turkish tensions have now shifted exclusively to the Cyprus theatre. This was something the government hadn't bargained for," one Disy source told the Cyprus Mail.

Disy, the largest political party on the island, is now worried that Cyprus will be a pawn in the power struggle between Athens and Ankara and subsequently become part of a quick-fix peace deal.

"The missile deal has become more important than the Cyprus problem, and I'm not sure whether Greece is ready to respond (to protect the island against a Turkish attack) as they have pledged," said the Disy source.

So is the Cyprus government dragging its people towards war because it has no real long-term strategy to convert missile rhetoric into a winning hand at the negotiating table?

"There is widespread concern that the S-300s will bring less rather than more security," said one diplomat of an EU member country.

The thorny missile problem has turned attention from the negotiating table to the battlefield.

"This is policy making on the hoof: there is no long term policy (by the Cyprus government). The international community is crystal clear on the missile deal," said another western source.

Many informed observers and diplomats believe that Cyprus now faces the abyss of open conflict as the peace process struggles for credibility in the face of international opposition against deploying the S-300 missiles.

Despite pressure from the Americans and Britain to scrap the deal and Turkish threats to attack the missiles if they are ever deployed, the Cyprus government has been steadfast in its right to defend itself.

It has tried to placate international pressure to cancel the deal, by saying the missiles will not be deployed if the Turkish and Turkish Cypriot side agree to its demilitarisation proposal.

"(Turkish Cypriot leader Rauf) Denktash has the most to gain from the missiles coming - it would get him out of the international dog house," said another diplomatic source.

In January 1997 the government took a gamble by announcing it would buy the S-300 missiles at a cost of £200 million in an effort to kick-start the faltering peace process.

The missiles are now scheduled to arrive by October, after the government decided against them coming in August.

"Before the missile deal Cyprus was bottom of the international agenda, but now the deal has made them take notice," said a source close to the government.

However many western diplomats feel these expensive bargaining chips could explode in the government's face.

"This was a miscalculation from the start, because the Americans were focusing their attention on Cyprus before the missile deal.

"In fact the missile deal has put off other countries from getting involved when tensions are running so high," said a western diplomat.

European sources are also dumbstruck over the timing of the Greek F-16s landing in Paphos this week.

"I doubt whether President Glafcos Clerides was involved in the timing: he's more sensible than to bring Greek jets on the last day of the Cardiff summit. It was distinctly unhelpful," said one European diplomat.

But some diplomatic sources believe Turkey will choose political options rather than a military strike.

"Ankara has a number of political options such as seeking further integration with the north and having a permanent military air base at Lefkoniko," said a diplomatic source.

Nevertheless, a number of EU member state diplomats believe missile diplomacy could escalate into military conflict.

"The defence aspect is far outweighed by the escalation in political tension with possible military consequences," one ambassador told the Cyprus Mail.

The prevailing opinion among western sources is that the missiles will come whatever the political backlash.

"It is hard to see the missiles not coming as the government has committed itself... so it's extremely unlikely there will be any progress in the peace process," said another western source.

[02] Demirel to answer Stephanopoulos visit

IN A tit-for-tat move, Turkish President Suleyman Demirel will arrive in Cyprus on June 28 to coincide with an official visit by Greek President Costis Stephanopoulos.

The Turkish press has described Demirel's visit to the occupied north as being in retaliation for Stephanopoulos's arrival on June 25. The Greek President is scheduled to leave the island the day Demirel arrives.

The exchange of presidents follows the exchange of warplanes earlier this week. Turkey sent six F-16 fighter jets to the occupied north on Thursday in retaliation for a visit to the Paphos airbase by four Greek air force F- 16s.

Turkey's Foreign Ministry yesterday repeated claims that Cyprus's defence measures constituted a military threat to Turkey.

It also announced that Turkey's National Security Council would meet on June 29 to discuss the Cyprus issue.

In a written statement, the Foreign Ministry in Ankara said Turkey was prepared to take all necessary measures to counter any threat against the basic goals of its foreign policy, which include the security of the occupied north and maintaining the military balance in the region.

Government spokesman Christos Stylianides said Turkey was creating tension in Cyprus in an attempt to divert attention from its internal problems. Speaking in a radio interview, Stylianides said the calm stance adopted by Athens and Nicosia was reducing the tension manufactured by Ankara over the last few days.

[03] Brinkmanship and missiles bring down shares

THIS WEEK's aerial brinkmanship by Greece and Turkey over Cyprus and the lingering uncertainty over the S-300 missiles have depressed share prices, raising doubts anew on whether the infant bourse could become an attractive investment proposition in the absence of a Cyprus settlement.

"The uncertainty is holding the market down by some 20 per cent," said John Pitsillos of Share Link Securities. "I believe that there will be significant volatility until the while thing is sorted out."

The official all-share index dropped by as much as 1.33 per cent on Friday, ending a miserable week of daily losses which saw prices plunge by nearly three per cent.

Volume, which often scaled new highs during the first four months of the year, has also significantly thinned out, with some days seeing action worth no more than a meagre £800,000 compared to highs of more than £3 million in the first four months of the year.

Perhaps trying to talk up a slumping market, many traders argue that the decline since the beginning of May - 10 per cent - was an inevitable correction after prices soared by as much as 20 per cent in the January- April period. The market, they insisted, could not go up for ever.

But it has become abundantly clear now that the plunge could not be pigeonholed as simply a correction movement.

"Investors are waiting for the political uncertainty to go away before they come back," said Pitsillos of Share Link. "There is still more room for drops."

Putting it differently, but equally bluntly, Panos Panayiotou of AAA United Stockbrokers said: "No one wants to buy: investors are waiting for even cheaper prices before coming back."

The latest spate of drops has been across the board, not even sparing the blue-chips of the banking sector. Bank of Cyprus shares closed down on Friday at £3.45 apiece, while the Popular Bank closed, also down, at £3.65. These prices compare to £3.91 and £4.08 respectively on April's last trading day.

The two banks are the largest financial institutions on the island, and trade in their much-sought-after stocks account for nearly half of the daily volume, while their combined value is more than 50 per cent of the market's capitalisation - £1.33 billion at the end of April.

Yiannos Andronikou of Suphire Stockbrokers, while seeing tactical trading by some brokers in the latest drops, said that the constant talk of the missiles and the sight of Turkish warplanes over Nicosia was not helping a tourist season that is widely expected to be a record one in terms of arrivals.

"The strength of the Cyprus economy has bailed us out for the past 20 years, " he said. "If that goes everything else will."

[04] CY high fliers on Concorde pay

A HANDFUL of Cyprus Airways' pilots are earning as much as veteran Concorde captains - despite the fact that the airline is taking a nose-dive.

According to Cyprus Airways (CY) figures, each Airbus captain will cost the airline more than £80,000 in 1998. The pilot's take-home amount is less, of course, because the figure includes social insurance and benefits and tax must be paid.

But a Concorde captain with 20 years of service only gets the equivalent in sterling, according to British Airways (BA) figures. A BA source said that ordinary BA captains earn from £50,000 sterling and co-pilots make around £30,000 sterling.

CY estimates that in 1998 the wages of the average captain and co-pilot will range from £47,000 to £55,000. Even out-of-school cabin staff are earning £27,000 a year.

The CY annual report for 1997, which is due to be released on Wednesday, will show that the national carrier's wage bill now costs the company £40 million per annum, up from £38 million in 1996 and now comprising one third of its operating costs. This is in contrast to large European airlines which have cut their wage costs to around one fifth of total expenditure.

The next highest expense to Cyprus Airways is landing charges of £19 million, less than half the cost of wages, while maintenance clocked in at £13 million and fuel at £11.5 million.

The wage hike is also clearly attributable to an increase in the number of CY employees. Despite a costly voluntary redundancy scheme in the early nineties, the staff who left have all been replaced and even more have been hired.

A new voluntary redundancy scheme was launched last week as part of the much-maligned strategic plan which proposes that 700 people be shaved off staff figures. Pilots, for whom the plan recommends a 10 per cent pay cut, are not allowed to apply.

At the end of 1997, CY had 1,624 permanent staff, compared to 1,587 at the end of 1996 and 1,460 in 1995. This year it shows a further increase - by the end of May the staff figure had risen to more than 1,800.

A breakdown of the statistics shows that in the past two and a half years CY has hired 263 people. On average this is at the rate of eight people per month, or two people a week. The airline has close to 200 people in its accounts department alone.

"It has got to the stage where politicians just ring up and say they want so-and-so hired," insiders told the Cyprus Mail.

Although the average cost per employee, based on CY's wage bill, is around £25,000, the blame for the huge total is being laid squarely at the door of the highly-priced pilots, of whom there are 104.

CY calculates its bill as an average cost per employee of £16,000 and an average cost per pilot of £63,000. By contrast, the average cost of an employee at CY's charter firm Eurocypria is £15,000 based on some 200 staff - 36 are pilots - and a total annual wage bill of £3 million.

"It's no use comparing our pilots' wages to those at British Airways," said inside sources at Eurocypria. "Our competition is not British Airways or Olympic Airways, it's Air 2000 and Britannia."

The Cyprus Airways' figures generally are disputed - CY pilots say their British counterparts get more money. A source in the pilots' union Pasipy told the Cyprus Mail that a BA captain is paid $160,000 plus thousands more in expenses.

Producing pay slips, a Pasipy source said a CY first officer with 4-5 years' service takes home only £1,700 a month net, while a captain with 22 years' experience takes home only £3,248 per month net. The source said this adds up to a gross annual pay cheque of around £70,000 for the senior captain, somewhat less than the amount earned by a Concorde pilot with similar service.

But a CY company source commented: "Pilots are very good at producing pay slips showing their basic salaries at £9,000 when on top of that there is so much more added in expenses and benefits."

Pilots also argue that they have not had a pay rise since 1989 but, said the Pasipy source: "We do not say we are badly paid and we are not miserable. We are well paid in comparison with everyone else and in productivity we are much better. If pilots are so much of a problem why doesn't the redundancy scheme apply to pilots and we could go away as well?"

Pasipy says too much blame is being laid at their door and that CY management is never held accountable for their decisions. "We know exactly what we have to do but the message is not getting through. All the governments have made a mess of Cyprus Airways, all we want is to be left alone," the Pasipy source said.

He said CY has so far refused to show them the strategic plan, leading them to believe there are decisions included which would have a negative effect on the airline's administration itself.

"I challenge them to pay me what they say they pay me," the source said. "They are trying to say we are the sole cause of destroying the company."

CY management declined to comment.

[05] Tourists want compensation for roof collapse

FIFTEEN British families are seeking compensation from UK tour company First Choice for the trauma they say they suffered when a lean-to roof collapsed at a Protaras hotel.

Four British tourists received medical treatment after the structure collapsed on top them during a game of pool at the King Alkinoos hotel last month.

A subsequent police investigation has so far failed to ascertain whether the structure was illegal or not.

"There seems to be some confusion between town planning and municipal engineers on who is responsible for the issuing of permits and checking such structures," a police spokesman told the Cyprus Mail.

Despite the lack of progress in the investigation, a group of British holidaymakers is suing the tour company for the trauma they suffered the night the roof came down.

"We all suffered that night, it was quite a traumatic experience. I thought my boy was under there... somebody could have been killed," father-of-three Lee Tappin told the Cyprus Mail from his home in Essex.

Tappin was with a family group of eleven - five adults and six children - who were staying at the King Alkinoos.

"Our kids had nightmares for days afterwards and they wouldn't sleep in their own beds. I was also pretty shaken," Tappin said.

The tourists, who were evacuated to another hotel after the incident, are also claiming a refund for their spoilt holiday.

The Tappin family group said their ruined holiday set them back around £6, 000 sterling.

Despite his experience, Tappin said he was planning another Cyprus holiday this September: "We just love the place."

[06] TV stations slammed for breaking the rules

In the report CyBC is ticked off for exceeding the required number of screenings for one advert, Antenna has been cautioned over transmitting telemarketing ads, and Sigma is rapped for violating rules on product placement in its top show Sto Para Pende.

CyBC is also in the ministry's black books for not warning viewers before showing films which contain violence.

It is understood that Logos is top of the ministry hit list with 34 charges against it.

The media watchdogs are especially unhappy with Logos for promoting fixed- odds gambling during live football coverage.

Sigma, Antenna and CyBC1 also failed to meet the required threshold percentage of cultural programmes (five per cent) in their schedule.

All three scored less than one per cent.

Only Logos attained the schedule requirement, also five per cent, for transmitting locally produced series.

© Copyright Cyprus Mail 1998

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