Cyprus Mail: News Articles in English, 99-04-23

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

Friday, April 23, 1999

CONTENTS

[01] Cordovez resigns as UN's Cyprus envoy

[02] Italian defence representatives in Cyprus to talk missiles

[03] House wary on defence spending in wake of S-300 fiasco

[04] Central bank boss rings alarm bells on deficit

[05] Quin arrives with Hannay

[06] Armed gunman raids village bank

[07] Two injured in slaughterhouse brawl

[08] Greeks released after accidental crossing into occupied areas

[09] House again postpones debate of corruption bill

[10] Savva murder suspects to be charged on May 17

[11] Bank employee remanded on suspicion of embezzling £750,000

[01] Cordovez resigns as UN's Cyprus envoy

UN mediator Diego Cordovez has resigned his post as special envoy for Cyprus after two years in office.

"UN Secretary-general Kofi Annan has now agreed, at Mr Cordovez's request, to relieve him of his responsibilities with regard to Cyprus," UN spokesman Fred Eckhard announced in New York yesterday.

In Nicosia, the Equadorian diplomat's resignation was widely rumoured and had even been confirmed by government spokesman Costas Serezis hours before it was officially announced in New York. "We have been informed that Mr Cordovez submitted his resignation which has been accepted," Serezis told his morning press briefing.

No reason was given for Cordovez's resignation in New York, nor was a replacement for him announced. Eckhard said "alternative arrangements" would be made to support Annan's efforts to broker a Cyprus settlement.

Cordovez, whose finest hour as UN mediator was conducting negotiations which led to the withdrawal of Russian troops from Afghanistan in 1989, was the latest in a long line of UN envoys to try but fail to end the division in Cyprus.

US ambassador Kenneth Brill, speaking after a meeting with President Clerides yesterday, said he would not comment on reports which suggested Cordovez felt he was being undermined by the US on the Cyprus peace process.

However Brill did say that US State Department Co-ordinator Thomas Miller had been in contact with Cordovez by telephone.

Friday, April 23, 1999

[02] Italian defence representatives in Cyprus to talk missiles

REPRESENTATIVES of the Italian firm Alinea have arrived in Cyprus in an apparent effort to revive the Aspide missile deal.

Defence Minister Yiannis Chrysostomis refused to comment on the presence of the delegation, but the Italian embassy in Nicosia did confirm their arrival.

Confusion over the deal to buy a new batch of the Aspide anti-aircraft missiles arose last month, when a report appeared saying the government had cancelled the contract.

The report was confirmed by the government, but the Italian embassy said last month it had not been informed of any such decision, and that their information suggested things were in fact moving in a positive direction. The government said its change of heart had been caused by Rome's delay in approving the deal.

But yesterday an embassy spokesman said a delegation from Alinea had arrived on the island for talks with the Cypriot authorities.

"We have not received a negative answer from the government," the spokesman insisted.

He said the mere fact that a delegation was on the island was a positive sign.

"It means they are here to see what the possibilities are for an agreement, " the spokesman said. "They didn't come because the government gave a 'no' - that could have been said on the phone."

Chrysostomis refused to comment on whether he had met the Alinea delegation. "We do not give any information on the defence activities of the Ministry," he told the Cyprus Mail.

Cyprus signed the contract with Alinea in October 1997. It was due to be fulfilled within a year.

But Rome began stalling over granting an export permit for the missiles to come to Cyprus. Cyprus insisted that the delay was down to a technical hitch, but it is widely believed Italy was stalling because of Cyprus' plans to install the controversial long-range S-300 missiles.

The cancellation of the Russian S-300 deal last December cleared the way for Italy to approve the Aspide deal, and the government in Rome said at the beginning of this year that it was ready to renegotiate the contract with Cyprus.

The Cyprus government said last year it was considering buying a batch of short- to medium-range Russian missiles if the Aspide deal failed to materialise.

The Russian-made TOR-M1 option (with a range of 12km) and the Aspides (with a range of 18km) were both suitable ground-to-air options to protect the S- 300s.

The Aspides were considered cheaper in view of the National Guard's existing stock of the Italian missiles.

Even without the 150km-range S-300s, the Aspide system remains a viable option for Cyprus, which does not have an air defence system.

Former Defence Minister Yiannakis Omirou, who resigned from the government with his Edek party over the cancellation of the S-300s, has warned that Cyprus should not rely entirely on Russian defence systems, and that - unlike the TORs which must come through Greece - the Aspides could be brought directly to Cyprus.

Friday, April 23, 1999

[03] House wary on defence spending in wake of S-300 fiasco

THE S-300 "experience" is threatening to block unanimous approval of government defence spending plans for the first time ever.

The 1999 defence budget was to go before the plenum for approval yesterday afternoon, but consideration of the bill was put off at the behest of the House defence committee after it became clear parties were far from unanimous on the matter.

The sticking point is believed to be Akel's objection to budget provisions for the purchase of advanced weapons systems such as missiles and attack helicopters. The opposition party's deputies apparently fear that any attempt to buy such systems would meet with strong reaction from the international community, forcing Cyprus to shelve deployment - just as happened with the S-300s.

On December 29, after months of pressure from the UN, US and EU, President Clerides was forced to redirect the £200 million Russian-made ground-to-air missiles to Crete. Turkey's threats to destroy the S-300s if they arrived in Cyprus had prompted fears in the West that deployment could spark a Greco-Turkish war.

Defence committee chairman Takis Hadjidemetriou yesterday declined to comment directly on what Akel's position was, but did indicate all deputies had been made wary by the "real experience of the S-300s."

The committee met behind closed doors yesterday morning to discuss the issue ahead of the planned plenum vote.

In statements after the committee session, Hadjidemetriou made it clear deputies were loathe to put the 1999 budget to the vote in the absence of unanimity.

Hadjidemetriou said the committee was calling on President Clerides to chair a meeting of the defence committee and party leaders with the aim of ironing out differences on weapons purchases and "clarifying" certain issues of defence spending policy.

"Every effort must be made to achieve a similar stance from both the committee and the plenum on the new budget," Hadjidemetriou said. "There are broader policy issues concerning certain provisions of the budget (to be considered)," the Edek deputy said.

The government is reported to be considering purchase of Italian-made Aspide ground to air missiles and South-African or Russian attack helicopters.

Friday, April 23, 1999

[04] Central bank boss rings alarm bells on deficit

ADDING HIS weight to that of the head of the island's largest financial institution, Central Bank Governor Afxentis Afxentiou yesterday urged both the government and the House to adopt measures to tackle a growing fiscal deficit that threatens to torpedo efforts to qualify for the EU's single currency.

"The government and Parliament must realise that the problem is very serious," Afxentiou told reporters after a meeting with leaders of the island's commercial banks. "Parliament must show understanding and approve the tax package before it," he said.

Cyprus faces a fiscal deficit of almost six per cent of GDP this year after the shortfall reached 5.3 per cent in 1998.

The deficit represents a serious deviation from single currency criteria, which set a three per cent ceiling on the deficit. Cyprus hopes to qualify for the single currency upon EU accession in 2003.

Afxentiou's plea came one day after Solon Triantafyllides, chief executive of the Bank of Cyprus, spoke of the dangers posed by the fiscal deficit if nothing was done to redress it.

There existed a need, Triantafyllides said on Wednesday, to reduce the deficit in order to facilitate the proposed liberalisation of interest rates. He also called for a hike in value added tax, saying that its present eight per cent level was too low by European standards.

"It should be noted that the current account deficit significantly increased in 1998. In order to reverse this trend, the fiscal deficit, which also has an expansionary impact on local private consumption, should be reduced as a matter of priority, so as to create the right conditions for the reduction of interest rates," Triantafyllides told the AGM of the Bank of Cyprus Group.

Afxentiou also called on the government to impose new taxes and properly implement current tax laws. The government must also, the Central Bank Governor added, set an example by cutting back on expenditure.

"It is a foregone conclusion of our alignment to Europe, and, since we are facing an acute deficit at this moment, (why not) deal with an increase in VAT and other tax measures pending in Parliament," Afxentiou said.

Almost a year ago, the House threw out a tax package proposed by the government. Deputies argued they had not been adequately consulted on the measures which, had they been adopted, would have brought the treasury an extra £143 million in annual revenue.

A revised package of taxes was later presented to the House, but remains with the chamber's Finance Committee while President Glafcos Clerides continues lengthy consultations with party leaders on a wide ranging set of economic and fiscal reforms.

The fiscal deficit has been blamed by the government on loss of revenue from import tariffs rescinded under the island's Customs Union agreement with the EU and on expansionary spending to revive sluggish sectors of the economy. A higher payroll for government employees and a drop in tourism revenues in 1997 are also blamed for the deficit.

Friday, April 23, 1999

[05] Quin arrives with Hannay

Quin, who will today have a working breakfast with President Clerides before crossing to occupied Nicosia for talks with Turkish Cypriot leader Rauf Denktash, is accompanied by Britain's envoy to Cyprus Sir David Hannay.

Quin made no statements on arrival at Larnaca airport at 4pm and was similarly tight-lipped following a meeting with Foreign Minister Yiannakis Cassoulides two hours later.

Foreign Office Minister Quin is expected to hold a press conference at the UN-controlled Ledra Palace hotel in Nicosia this afternoon, before departing at 6pm.

Sir David's last visit to the island earlier this year was marred by a diplomatic row with the Cyprus government sparked by statements the envoy made on arrival.

Friday, April 23, 1999

[06] Armed gunman raids village bank

AN ARMED gunman held up a Bank of Cyprus village branch in Paphos yesterday, getting away with £6,500 and thousands more in foreign currency.

"A masked gunman walked into the bank this morning and took £6,500 in cash from the till after wielding a pistol at the staff inside," police spokesman Stelios Neophytou said yesterday.

According to the bank, £4,900 worth of foreign currency was stolen, bringing the total to over £11,300.

Neophytou said the robber held the staff at gunpoint, ordering them to hand over the money. The man, who spoke Greek, then ran off with the cash in a plastic bag.

The robbery took place at the Paphos village of Chlorakas at 9.40am. Three members of staff were inside at the time and two customers were waiting to be served.

Police said the assailant got away on a power bike, which was later found abandoned in the tourist area of Paphos. The bike had been reported stolen on Wednesday night.

An eye-witness saw the bank robber ditch the bike and drive off in a battered blue car, which the police are now trying to trace.

It is the third armed bank robbery on the island since February and the second time in as many months that the Bank of Cyprus has been targeted.

Local banks have come under fire from unions and police recently for not introducing tighter security measures. Yesterday's events will only add to staff feelings of insecurity.

Friday, April 23, 1999

[07] Two injured in slaughterhouse brawl

A meat cleaver came into play when two Egyptians got involved in a heated argument while cleaning the abattoir at Kokkinotrimithia.

Hamada el-Safi, 28, and Aiman Mohammed, 25, crossed swords after Mohammed accidentally sprayed water on his colleague, prompting a volley of abuse.

Taking offence at the insults, Mohammed attacked el-Safi with a meat cleaver and stabbed him in the head, police said.

Eight more Egyptians, some armed with knives, then assaulted Mohammed, who was bludgeoned with a metal knife-sharpener in the fracas, police said.

Once tempers had subsided, the two men were rushed to Nicosia General hospital and treated for their injuries.

Friday, April 23, 1999

[08] Greeks released after accidental crossing into occupied areas

Police said that 25-year-old Constantinos Pantazopoulos, his sister Maria, and Vassiliki Konzai, both 27, entered the occupied areas through the British Sovereign Base Area (SBA) at Dhekelia.

UN spokesman Major Paul Kolken told the Cyprus Mail that the three holiday- makers had been released yesterday afternoon, after appearing before a Turkish Cypriot 'court' earlier in the day.

He said the trio's rented car, in which they crossed over, had been impounded in the occupied areas and that the UN would on Monday begin negotiations for its return.

There is no buffer zone at the Dhekelia SBA, and accidental crossings are relatively frequent.

Friday, April 23, 1999

[09] House again postpones debate of corruption bill

The bill has been pending since 1993 and was sent to the House by the Cabinet on January 7.

On April 2, in its last session before the Easter break, the plenum decided to postpone consideration of the controversial bill till yesterday, to give deputies a chance to consider the legal affairs committee's final report on the proposed law.

Committee chairman Panayiotis Demetriou said at the time the report was ready but no-one had had a chance to study it.

But the plenum heard yesterday that the committee report had only been circulated to deputies yesterday morning, and so deputies decided again to put off consideration of the bill to allow time for study of the report.

Demetriou has stated that the proposed law covers a wide range of public figures and would give the government a real corruption prevention tool.

The corruption allegations that forced the recent resignation of Dinos Michaelides as Interior Minister have brought the issue of abuse of position for personal gain to the fore.

[10] Savva murder suspects to be charged on May 17

Father-of-two Savva, 52, was blown up in his car as he drove through morning rush-hour traffic in Limassol on March 23.

Police believe builder Andreas Andreou, 30, and private company employee Christoforos Georgiou, alias Stikkis, 28, conspired with Charalambos Spyrou, 26, to murder 52-year-old Savva in a bid to avenge the death of Spyrou's cousin.

Spyrou's cousin, Marinos Stavrou, was shot dead in November while out hunting near Kantou. Two special game wardens are currently on trial for the killing.

The Limassol District court yesterday referred the Savva murder case to the Assizes and ordered that the three suspects remain in custody till their trial.

Friday, April 23, 1999

[11] Bank employee remanded on suspicion of embezzling £750,000

Costas Menelaou, 35, head of the credit department at the bank's Ayios Nicolaos branch in Limassol, is suspected of stealing at least £15,000 from one account and accessing others by circulating false documents, diverting a total of £750,000, police told the court.

Police believe Menelaou started his scam in September 1997, when he received £10,000 in cash from a client to deposit.

Instead of depositing the money, he kept it, police said.

The discrepancies were discovered by the bank's internal audit and the extent of the fraud is still being evaluated.

Menelaou has denied the allegation and claims that not one cent has gone missing from the bank.

© Copyright Cyprus Mail 1999

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