Cyprus Mail: News Articles in English, 98-07-14

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

Tuesday, July 14, 1998

CONTENTS

[01] Presidents confirm: S-300 deal on track

[02] Committee hears claims of rigged promotion and threats

[03] Don't expect the state to bail you out, CY told

[04] Israelis deny training Turks on S-300 raids

[05] Taxation talks with Russia face problems

[06] Cypriots fed up with the civil service

[07] The betting frenzy is over

[08] Greens welcome step on Akamas

[09] Government keeps options open on strike ban

[01] Presidents confirm: S-300 deal on track

RUSSIAN Premier Boris Yeltsin and President Glafcos Clerides yesterday confirmed that the deal for Russia to supply Cyprus with S-300 anti- aircraft missiles would be going ahead as planned.

Speaking after a morning meeting between the two in the Kremlin, Yeltsin aide Sergei Prikhodko said: "The issue has been discussed more than once here - the readiness by both sides to meet obligations undertaken earlier under this contract has been confirmed."

He added that military and technical cooperation between the two countries was "an integral part of our inter-state relations".

The two presidents also exchanged views on the Cyprus problem, and Clerides thanked Yeltsin for Moscow's positive stance. Cyprus' position on the missile deal was further backed up later by Foreign Minister Yiannakis Cassoulides, who accompanied Clerides on the visit. Cassoulides said the island's "positions are known and will be adhered to."

Clerides himself described his 20-minute meeting with the Russian president as being "so good that I do not think we will meet any difficulties now in entering into a more detailed discussion."

The meeting was also attended by Cassoulides and Under-Secretary Pantelis Kouros. Later, the Cypriot delegation attended a working lunch hosted by Russian Foreign Minister Yevgeny Primakov, who said Russia and Cyprus were on good terms. He said he "cannot find anything which can bother the close and friendly relations between the two countries". Primakov and Clerides also held brief private talks before the lunch.

Clerides is in Moscow at the invitation of Moscow Mayor Yury Luzhkov, for the opening of the World Youth Games. He was guest of honour at the opening ceremony yesterday afternoon and returns to Cyprus today. Yesterday evening he was scheduled to meet Russian Patriarch Alexy II.

Cyprus' ties to Russia have become particularly prominent since the missile deal was announced, with strong foreign reaction against the decision by Cyprus to purchase the missiles culminating last week in an exchange of letters on the matter between Clerides and US Secretary of State Madeleine Albright.

The international concern has continued in spite of Clerides' repeated offers to postpone the deal if political talks resume and are substantive, and to consider cancelling it if progress is made on demilitarisation, a position he reiterated at the weekend in an interview with the Sunday Times of Britain. He declared then that there was "still time" to cancel the order, and that he was "again prepared to postpone delivery - and if we make progress, cancel".

It was originally planned for the missiles to arrive on the island in August, but this date was moved back to November at the government's request. Last week, Defence Minister Yiannakis Omirou visited Russia to observe test-firings of the missiles, while Russian training programmes in using them were completed by Cypriot National Guardsmen.

Turkey has reacted strongly to the S-300s, threatening to prevent their deployment by military means and has rejected compromise over the matter, saying the missiles will not become a "bargaining chip".

Turkey's top general, Ismail Hakki Karadayi, yesterday flew to the US to discuss the situation in Cyprus and the Aegean with US Defence officials. Turkish Cypriot leader Rauf Denktash reacted to the meetings between Yeltsin and Clerides, by repeating warnings of Turkish retaliation for the missiles' deployment, saying: "You will get a response to whatever you do."

[02] Committee hears claims of rigged promotion and threats

EUROCYPRIA management rigged pilot recruitment and threatened a senior captain if he went public on the allegation, the House Ethics Committee heard yesterday.

But the charter firm's general manager, Charalambos Hadjipanayiotou, firmly denied that he had suggested a change in recruitment test grades and instead turned on his accuser, senior pilot Emilios Economides, charging him with nepotism.

In a sometimes tense meeting, the Committee heard that Eurocypria hired applicants one, two, three and five -- the latter allegedly a political appointment -- from a final list, and that the rejected fourth-placed applicant was a distant relative of Economides, himself a member of the selection committee.

In a separate accusation, Eurocypria pilots said Cyprus Airways (CY) chairman Takis Kyriakides had demanded that more than the requisite 30 candidates go abroad for a flight simulation test because another political appointment had been number 32 on the selection list.

Eurocypria turned down the request, but the low-scoring pilot in question was later hired by Cyprus Airways.

And in its own recent recruitment, Cyprus Airways hired candidates one, three and seven, instead of the top three on the short-list, the Cyprus Mail has learned.

Accusations were also made that a pre-election deal between CY's biggest union Cynika and the Presidential Palace agreed to favour that union's members for promotion.

Economides, who is Eurocypria's chief pilot, but whose appointment has not been made permanent, denied that his complaints about the recruitment procedure were in any way motivated by nepotism.

He said the rejected fourth candidate was merely the brother of his former wife, and, as far as he was concerned, was not a relative at all.

The point was that the candidate had been passed over for no other reason than to make room for number five.

Economides also accused Hadjipanayiotou and CY of threatening his own position.

"I was advised by Hadjipanayiotou that if I came here to testify, my position as permanent chief pilot would be weakened," he said.

Hadjipanayiotou vehemently denied the claim, but Economides added: "You said to me 'if I slap you what will happen?' and I said I had two options: 'either I'll stand here and be slapped or I'll slap back'."

Kyriakides called for Economides to produce evidence of his claims or withdraw them.

Economides said a CY pilot was already being pushed to contest his position, even though Eurocypria pilots get paid less.

"He has been promised an additional £15,000 plus in order to do this," Economides claimed.

Both Economides and another senior Eurocypria pilot and selection committee member, Adrian Akers-Douglas, testified to the Committee that the correct procedure had been followed by them throughout the recruitment.

But they said that on July 2, Hadjipanayiotou called them to his office and said he wanted to change the grades on a particular area of the test.

The changes would have proved detrimental to candidate number four's application, even though he had scored higher than candidate number five -- the alleged political favourite -- in nearly every category of the test.

"All the tests were carried out with no interference from me," Hadjipanayiotou said. "If I wanted to intervene, I could have done it."

He said he only learned at the last moment that candidate number four was a distant relative of Economides. "This should have been mentioned earlier and examined by legal advisers. I only found out when the candidates were waiting outside for the interview."

Akel deputy Kikis Kazamias asked Hadjipanayiotou if he had ever hired a relative of his at Eurocypria.

The Eurocypria manager replied that he had once hired a relative as a messenger because the company couldn't find one to hire.

[03] Don't expect the state to bail you out, CY told

THE HOUSE Finance committee yesterday warned Cyprus Airways (CY) not to expect the state to bail it out if employees refused to accept the pay cuts provided for in the new CY strategic plan.

"You said if unions do not accept you will ask the House to approve more money for Cyprus Airways, this is not realistic," committee chairman Alexis Galanos told CY chairman Tassos Kyriakides.

The committee yesterday grilled Kyriakides over the five-year strategic plan, which unions have rejected.

The plan aims to cut costs and put the ailing national carrier back on track by imposing a three year wage freeze and a ten per cent pay cut for pilots and stewards.

After encouraging results in 1994 and 1995, the airline registered a record loss of £5 million in 1996 and a deficit of just over £3 million last year.

"If the cost cuts are not achieved, Cyprus Airways will not survive," Kyriakides warned deputies.

"We want employees to see the company as their partner and not their keeper, " Kyriakides said. The company is offering employees a cut of profits and a share offer as a sweetener for the pay cuts.

But deputies doubted the employees or anyone else would be interested in buying CY shares. "Will anyone, whether private companies or individuals, invest in CY if the government keeps a 51 per cent share holding," Galanos asked.

The government currently owns 80 per cent of the company, but the strategic plan provides for this to be reduced to 51 per cent by a share issue. Deputies said CY had to get its house in order before it could hope to become attractive to investors.

Diko deputy Tassos Papadopoulos said CY should not expect the House to approve state loans or guarantees for the purchase of more aircraft, as provided for in the plan.

He repeated his pledge to vote against funding for CY unless the company set up an independent body to ensure that meritocratic procedures were followed in the hiring and promotion of staff.

"You need regulation to prove that those, like myself, who accuse the company of nepotism are wrong," Papadopoulos said.

Kyriakides said he knew of no nepotism within CY. Papadopoulos insisted on a straight answer about whether an independent monitoring body would be set up.

"We believe in meritocracy and will look into any possibility for improving this," Kyriakides answered.

The committee is to continue discussion of the strategic plan when parliament reconvenes in the Autumn.

[04] Israelis deny training Turks on S-300 raids

The report, which appeared in yesterday's Turkish daily Hurriyet, claimed six fighters had practised radar evasion electronic jamming and bombing runs. There was no comment from Turkish military officials.

Denial also came from the Israeli embassy in Nicosia.

In a statement, the embassy described the reports as "complete untruths", adding that it also denied reports that a base for Israeli fighters was to be built in eastern Turkey.

Meanwhile government Spokesman Christos Stylianides yesterday denied that Nicosia and Washington had asked Israel to intervene with Turkey on the issue of the S-300 missiles, as reported in the Israeli daily Ha'aretz.

The newspaper reported on Sunday that Israel had been asked to use its influence and good relations with Turkey to help defuse the situation. It also claimed that the issue had been discussed during a recent visit to Israel by Turkish Foreign Minister Ismail Cem, but that nothing had been achieved.

Stylianides described the article as "imprecise", and added that "the government has not made Israel an official proposal to intervene on the issue."

Since 1996, Turkey and Israel have been developing strategic ties, carrying out joint air and sea manoeuvres and signing of several defence and trade pacts.

[05] Taxation talks with Russia face problems

Speaking to reporters on his return from Moscow, he said a Cypriot delegation would travel to Russia on Thursday to resume the talks.

Christodolou last week flew to Russia, where he held talks with his Russian counterpart Mikhail Zadornov and other officials on renewing the taxation agreement, signed in 1982 between Cyprus and the former Soviet Union.

Describing the negotiations as "long" and "difficult," he said problems facing the renewal of the agreement arose from Russia's own internal difficulties and what he said was pressure from the International Monetary Fund on Moscow to remedy its economic woes.

"We have not reached an impasse. We have agreed to continue our negotiations," said the minister.

Cyprus has about 30 agreements on double taxation avoidance with foreign countries. The pacts underpin the island's flourishing offshore sector and are a crucial component of its attraction to foreign businesses.

Offshore companies on the island enjoy huge tax breaks, which, once paid, exempt them from paying corporate tax in their home countries if these have a taxation agreement with Cyprus.

Russia, a main source of offshore business for Cyprus and a fast-growing source of free spending tourists, is under pressure from the IMF and other donor countries to improve the efficiency of its tax collection as part of measures to bolster its revenues.

Addressing a business conference in Cyprus earlier this month, a senior Cyprus-based banker said the island's continuing role as an offshore business centre would gradually be less dependent on being driven by tax incentives as tax collection improved the world over.

"The reality is that many of the double taxation treaties will ... possibly fall away over time anyway," said Robert Miller, manager of Barclays Bank Plc (Cyprus) on July 4.

"Against this challenging background facing Cyprus as a tax incentive driven financial centre, I do not see despair, but rather a land that offers much opportunity as an international financial and business centre," Miller told the Money Show conference.

[06] Cypriots fed up with the civil service

This was the verdict to emerge from a recent poll conducted by AMER on behalf of ruling party Disy.

The poll covered a number of topics, including the status of political life in Cyprus, the role of parties, and the government's role in the economy.

Asked what the state's role in the economy should be, the majority of those polled, independently of political affiliations, criticised the public sector, many describing it as "gangrenous".

They pointed to the disproportionate share of the budget granted to the public sector and criticised the excessive number of civil servants.

Most men backed the privatisation of state organisations as a means of improving the economy in the run-up to possible European Union membership. There were some reservations concerning the extent and timing of privatisations, although most believed non-profitable organisations such as CyBC and Cyprus Airways should definitely be privatised.

But a number of women identified as supporting Disy and centrist parties opposed privatisations, arguing that the state needed some measure of economic power to hold in check overly powerful private interests.

Studies show that around 60 per cent of the budget is devoted to the public sector.

[07] The betting frenzy is over

THE FRENZY of World Cup betting ended in Cyprus on Sunday night with a shock victory by France and a gambling turnover totalling more than £20 million.

As the last minutes ticked away from France '98, Cypriot gamblers had placed £7 million worth of legal bets. Four years ago, bets totalled £4.3 million.

"It was unbelievable," said Nassos Ktorides, managing director of Glory betting. "I believe most Cypriots during this World Cup placed bets, especially in the last few matches," he said.

Ktorides added that there were people placing bets who had never gambled before in their lives. And it wasn't just men, but women, too, who got caught in the excitement of the tournament.

The turnover is much higher -- at least double -- if money from illegal gambling is also included. The government charges a 25 per cent levy on every football bet. People who want to avoid this tax make "under-the- counter" bets, take the money, and run.

When the month-long tournament began, Ktorides had estimated a turnover of around £1 million for his company, with a forecast that business would rise by 300 per cent. He confirmed these predictions had turned out to be more or less accurate.

"It was according to our expectations, even though some of the results were not so good," Ktorides said. Because some of the matches were shock results, people started being more conservative with their bets.

But of all the results, the final may have proven the most shocking.

Ktorides told the Cyprus Mail that 95 per cent of the correct score bets were for Brazil to win.

The largest bet recorded at Glory was £2,000. It was on Brazil. And Brazil were odds on favourites for victory at 2.25:1.

In the hours before the game, Ktorides said his offices had been inundated with phone calls about reports off the internet and Reuters about Brazilian superstar striker Ronaldo having been injured.

The well-being of Brazil's star striker was a serious concern for punters filling out their betting forms.

With the tournament over, business will drop down to normal levels; however, Ktorides is not phased.

"Everything has a beginning and an end. I would have liked Brazil to win because I like them, but as a businessman, their loss was a good result for the bookmakers," he said.

[08] Greens welcome step on Akamas

THE HOUSE of Representatives did in fact keep its promise to address the issue of the Akamas before the Summer recess, it emerged yesterday, despite Greenpeace complaints that it had failed to do so.

Deputies gave their backing to a plan based on the World Bank report on the unspoiled peninsula in the last minutes of an extended session which lasted until 9pm last Thursday night.

Irene Constantinou, a spokeswoman for Greenpeace, yesterday told the Cyprus Mail that Akamas had not been on the agenda that day. That is, no one was told it was.

"It was passed without any discussion. Even reporters who were present did not know," she said.

The last-minute news brought a sigh of relief from Dr. Mario Damato, Greenpeace Executive Director, who had accused the House president and Minister of the Environment of going back on their words.

"This is very good news and shows that things are now on track and at last promises are being kept," he said.

The Akamas plan reflects a 1996 World Bank study commissioned by the government of Cyprus. It recommends the Akamas be marked off as a national park to protect the natural environment.

Greenpeace is especially worried about the Green Turtle, an endangered species that nests in the area.

Constantinou said the passing of the plan was "the step we asked for" and that Greenpeace will be "watching how it will be handled by the Cabinet."

The next step will have to wait until Parliament resumes in September, when the Council of Ministers will to look at the plan and propose a bill.

Damato said he hoped measures will be taken quickly and that further discussions will not serve to "water down" the plan.

[09] Government keeps options open on strike ban

Asked whether the government might consider outlawing strikes in essential services, Stylianides told his daily press briefing that the Cabinet was willing to "re-evaluate its position".

Last week, nurses at Makarios hospital's paediatric section sparked a furious outcry after walking out on children being prepared for operations, claiming it was time for their lunch break. Top child surgeon Eleni Theocharous blasted the nurses for their behaviour, while civil service union Pasidy accused Theocharous -- who is a member of a breakaway doctors' union -- of cramming too many operations into a tight schedule.

Stylianides yesterday added that Cyprus would have to solve problems in the public services as part of its EU harmonisation process. Such a solution, he warned, would only be possible if "everyone concerned" co-operated.

The outcry over the hospital incident has prompted Health Minister Christos Solomis to launch an official inquiry.

© Copyright Cyprus Mail 1998

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