Cyprus Mail: News Articles in English, 00-05-31

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From: The Cyprus Mail at <http://www.cyprus-mail.com/>

Wednesday, May 31, 2000

CONTENTS

[01] Cyprus set to ban tobacco advertising

[02] Parents say sub-station emissions four times above limit

[03] ‘Paramilitary’ row: Why did Akel not go public earlier?

[04] Hoteliers warn all is not well

[05] Louis and Globalsoft falls drag the market down

[06] Brokers to discuss raising their collateral

[07] Moody’s downgrade follows IMF report

[08] Tourists dive for safety after boat blast

[01] Cyprus set to ban tobacco advertising

THE CABINET is today expected to approve legislation bringing Cyprus' anti- smoking laws in line with EU norms and putting an end to cigarette advertising.

Health Minister Frixos Savvides outlined the anticipated changes during a World No-Tobacco Day news conference yesterday.

"Every form of advertising of tobacco products and sponsoring by tobacco product producers will be prohibited from August 1 2001."

Savvides said the Cabinet was also expected to approve legislation monitoring advertising until that date.

"And this because powerful advertising campaigns glorify tobacco products as providers of strength, wealth, freedom, fun and health."

The issue of smoking in public leisure spots and at the workplace would also be examined in more detail, he said.

Penalties for smoking related violations are also set to rise to a £1,000 fine or six months imprisonment or both, Savvides said.

The maximum penalty for breach of no-smoking laws currently stands at a £500 fine, which is rarely imposed.

Savvides said that Health Ministry efforts to help people give up smoking included a proposal to raise cigarette taxes to two thirds of their retail price.

Cigarettes in Cyprus are among the cheapest in Europe. A pack of 20 can cost as little as £1 in Cyprus, four times cheaper than in Britain.

The Minister said assistance would also be given to people wanting to give up smoking through psychological support and the provision of nicotine patches.

He announced that a pilot programme would shortly be introduced to help Health Ministry staff and their spouses give up smoking. And he added that he would be joining in, having himself failed in a recent attempt to kick the habit.

Savvides said the project would cost the state approximately £120 per participant, not including the wages of the medical staff manning the support team.

The efforts will be accompanied by an intense media campaign to inform the public and young people in general about the dangers of smoking.

The Health Minister also used yesterday’s news conference to announce the winners of the Cyprus section of an international `Quit&Win 2000’ competition.

Christodoulos Matsoukas from Lakatamia yesterday won £500 after successfully giving up the habit for a month. His name will now go into an international draw with a $10,000 prize.

The £300 second prize went to Niki Prodromopoulos from Aglandja while Kapsalos, Limassol resident Andreas Christodoulou won the third prize of £200.

One hundred and eighteen people entered the competition in Cyprus.

Twelve of the entrants were picked at random near the competition's close and tested to see whether they had indeed given up the habit during the month.

Five of the twelve said they had failed to quit and another failed to show up for urine and breath tests to verify that the had actually stopped smoking.

The remaining six were put into draw from which the winners were chosen yesterday.

According to research published by the Health Ministry last year, 23 per cent of the adult population smokes, marking a rise both in the general figure and in the number of young smokers.

Four million people die across the world every year from smoking related illness, with the number expected to rise to 10 million in 25 years’ time.

© Copyright Cyprus Mail 2000

Wednesday, May 31, 2000

[02] Parents say sub-station emissions four times above limit

TESTS at the Limassol kindergarten shut down by parents because they said an electrical sub-station had caused leukaemia to four pupils, have shown electromagnetic emissions to be seven times the accepted levels, Parents’ Association Spokesman Michalis Michail said yesterday.

Angry parents closed the 15th Public and Community kindergarten in Polemidia on Monday after repeated but vain pleas to the Education Ministry to move the school.

Four pupils at the school have contracted leukaemia. Two died, a third is fighting for his life in London, and the fourth is understood to be now clear of the disease.

Yesterday, Michail claimed the tests they had conducted at various times showed the electromagnetic levels to be seven times higher than accepted levels.

He said the parents had presented the findings to the Electricity Authority (EAC), which dismissed them as being wrong.

On Monday, EAC Spokesman Tassos Roussos said the EAC had carried out its own extensive tests to sub-stations and found emissions to be below the suggested limits.

Michail said the school was not supposed to be permanently housed there.

"The association had rented the building temporarily, until a more suitable one was found," he said.

That was 14 years ago.

In the meantime, the EAC bought the land for the sub-station because the school was supposed to leave.

But after yesterday's closure, the parents seem to have found a friendly ear at the Education Ministry.

"Until now we had no response. We talked last night (on Monday), and they saw the issue in a positive light," Michail said.

Director of Elementary Education at the Education Ministry, Michalis Stavrides said the ministry was doing all it could to solve the problem.

"We need co-operation and not fighting," Stavrides said.

Speaking about the greater Polemidia area, Health Minister Frixos Savvides said a study of health complaints in the suburb would be completed soon.

The research was commissioned by the ministry after complaints by residents that high-power electricity cables passing overhead caused cancer.

"We will have the first findings in two to three weeks," Savvides said.

He disclosed that the committee would also be looking into the ground in the area, suggesting it may have been contaminated by toxic materials many years ago.

Concerning the school, Savvides said it would be easier to move the kindergarten than the sub-station.

© Copyright Cyprus Mail

Wednesday, May 31, 2000

[03] ‘Paramilitary’ row: Why did Akel not go public earlier?

THE SPAT between Akel and Disy continued without letup yesterday as the two parties exchanged fire over the alleged existence of a ‘paramilitary’ group that Akel claims is harboured by Disy.

The allegations were first made last Friday by Akel deputy Costas Papacostas, who claimed a clandestine paramilitary group had been tasked by Disy to keep tabs on the political persuasions of National Guard officers.

The aim, Papacostas said, was to ensure favourable treatment for Disy sympathisers.

Yesterday, Papacostas described how he got hold of the documents, which he said proved the existence of the group.

He said Colonel Loizos Fesas, who was also named as being a member of the group on a document presented on Friday, had forgotten the dossier containing the documents at the office of Colonel Avraam Marangos, whom he visited for coffee.

Marangos found the dossier, Papacostas said, copied the documents inside and subsequently informed the National Guard's former second in command, General Leonidas Economopoulos.

"After failed efforts -- I do not know why and how -- to brief the army's commander, he came to me," Papacostas said.

The matter began during Easter, and the documents were handed over to him on Sunday May 14, 10 days after the army's second in command was informed, the Akel deputy added.

"When I saw the documents my blood pressure went up. I cannot describe how upset I was," Papacostas said.

He added: "It is good things came this way. Imagine if this conspiracy had not been exposed, where the island would be led to."

Commenting on Monday's statements by the Attorney-general that he needed the original documents to proceed with the case, Papacostas said: " I realise the investigator's difficulties, but you can easily see who wrote the notes on the documents."

Papacostas charged that the writing along with the dossier and the documents, all belonged to Fesas.

Disy deputy Antonis Karas disputed the accusations, wondering why Papacostas had not informed the army or the Defence Ministry earlier, since he got the documents on May 14.

Karas further questioned the decision of Colonel Marangos to hand the documents over to Akel.

Disy claim Marangos is an Akel sympathiser.

According to Economopoulos, said Karas, Marangos was told to write a report and submit it along with the dossier.

But instead, he bypassed the army's hierarchy and gave the ‘conspiracy’ documents to Papacostas.

Karas claimed Akel held on to the documents until May 26, studied them, and chose the best time to go public, having in mind only the party's interests.

Meanwhile, Disy Chief Nicos Anastassiades yesterday maintained that what had been heard at Monday’s House Defence Committee session proved his party to be right.

During the emergency Defence Committee meeting called to discuss the issue, Defence Minister Socratis Hasikos told deputies he had launched an investigation into the matter even before Papacostas went public with his claims.

The minister's assertion was supported by Army Chief Evangelos Florakis.

Hasikos vowed to come down hard on anyone found guilty of intervening in army affairs.

During the meeting, Disy deputies insisted there was nothing to link the alleged clandestine group to their party.

Papacostas fought back, saying he had documents naming well-known Disy supporters as members of the group.

© Copyright Cyprus Mail

Wednesday, May 31, 2000

[04] Hoteliers warn all is not well

THE CYPRUS Hotel Association (Pasyxe) yesterday said that higher tourism arrivals and receipts should not give the impression that all was well in the industry.

Speaking at Pasyxe's annual general meeting (AGM) yesterday, its president Avgerinos Nikitas said that the positive results had been assisted by unusual external factors affecting the island’s tourism competitors.

Nikitas said the hotel industry still had to face challenges, such as the poor competitiveness of Cyprus' tourist product. The island's prices are 20 to 40 per cent higher than those of its main competitors.

He said that the Cyprus hotel industry also suffered from low productivity levels, estimated to be around half of those enjoyed by the competition and from Cyprus' comparatively high cost of living.

Nikitas said the recent two-point rise in Value Added Tax (VAT) to 10 per cent was expected to further aggravate the problem, while operational costs continued to rise, with labour expenses representing about 40 per cent of total costs.

Diminishing profitability due to low occupancy and millions of pounds in outstanding debts were further problems, along with "exchange rates fluctuations in relation to foreign loans, which in many cases exceeded the rate of 25 per cent of the initial loan."

Nikitas said that this indicated that the hotel industry subsidised the economy at the expense of its own performance, "A fact that explains the trend for an increasing number of hotel investments by Cypriot hoteliers in Greece."

He said a shrinking summer season contributed to the negative picture but that all the problems could be fought by "thinking in a European spirit and direction, both in terms of intentions and of action."

He said this included improvements to airports and ports and more aggressive advertising promoting Cyprus as a quality destination.

One third of Cyprus' tourism revenues should be invested to this end, he said, as happened in many European countries, "without the tourist entrepreneurs being asked to contribute to this end."

The government this year reintroduced a three per cent food and beverage tax to subsidise the Cyprus Tourism Organisation (CTO) after withdrawing a state subsidy introduced in its place to keep the industry afloat during the Gulf War.

Pasyxe also called for a Collective Agreement binding those involved in the hotel industry to be reviewed. "Ten years had elapsed since its original signing and the circumstances have changed significantly since then."

But Nikitas had words of praise for Commerce, Tourism and Industry Minister Nicos Rolandis for bringing the Miss Universe 2000 pageant to Cyprus.

Rolandis told the AGM yesterday that more than 2.4 million tourists had visited Cyprus in 1999 bringing in revenue of £1.02 billion. Revenues from tourism in recent years have made up around one fifth of the island's GDP.

Echoing Nikitas, he said that "tourism's very good course should not be taken for granted."

The Minister also said that Cyprus would have little problem in harmonising its tourism sector with EU standards.

© Copyright Cyprus Mail

Wednesday, May 31, 2000

[05] Louis and Globalsoft falls drag the market down

SHARE prices fell marginally yesterday as slight gains in most sectors were offset by a one percent slide in the sector representing blue chips Louis and Globalsoft.com.

The CSE all-share index was down 0.71 points, or 0.13 per cent to a close of 528.69. There were thin fluctuations, with anintraday high and low difference of just two points.

Traded values were firmer than on Monday at £32.8 million, while there were a considerably lower number of trades - some 2,000 less at 8,498.

Companies in the ‘other’ category dropped 1.08 per cent.

Louis were down four cents to a low of £1.37 on 940,581 shares traded, while Globalsoft dipped 12 cents to £5.63 on a volume of 242,117 shares.

The two companies jostle for third place in terms of market capitalisation behind Bank of Cyprus and Laiki, and the slightest move in their prices has an impact on the category and benchmark indices.

Gainers were led by tourism shares, which climbed 0.9 per cent while banking shares barely budged with a 0.13 per cent gain.

Analysts said many investors were sitting on the sidelines expecting news of the listing date for Bank of Cyprus shares in Greece.

"Many of them are holding wait and see positions pending the green light from Greek authorities on Bank of Cyprus," said Theodoulos Mesimeris of Expresstock.

But he said small-cap shares were also in the sights of speculators on rumours they could be acquisition targets.

Dodoni, widely speculated to be jumping sector from investments into the ‘other’ category, topped volume yesterday with 1.79 million shares changing hands.

It moved marginally to a close of 26 cents.

Traders said investors should exercise caution on the stock. "It is presently trading about 60 per cent higher than its net asset value," said stockbroker Costas Shamtanis.

© Copyright Cyprus Mail

Wednesday, May 31, 2000

[06] Brokers to discuss raising their collateral

BROKERS meet today to discuss increasing the security collateral of brokerages -- which hasn't changed since the market was dabbling in maximum volumes of two million pounds daily.

The brokers association,which is responsible for the financial clearing of transactions, is worried that with a dearth of new people entering the profession it may be impossible to keep tabs on financial obligations of CSE members.

Traders said yesterday the CSE avoided getting involved in the issue because they were "worried at the financial repercussions to them," according to one broker. In other countries the responsibility is undertaken by the respective bourses.

Brokerages now have a security collateral of £25,000, claimable if they fail to honour their financial obligations. That figure was imposed more than three years ago, when volumes at the stock market barely exceeded two million pounds a day and the number of brokers in the profession was considerably less.

"What we tried to do was function on a basis of my word is my bond.... With the continuous entry of new people into the profession we are talking about millions of pounds in deals. We are bouncing the idea of increasing the security collateral," said Stavros Agrotis, vice-chairman of the brokers' association.

He added, however, that occasions where other members failed to pay into the financial clearing system were few and very isolated.

However, another broker said the situation could cause turmoil because there were cases where some brokerages extended credit to their clients. A default could spill over and cause serious complications.

In those cases, a £25,000 collateral would barely meet a fraction of financial requirements on a market where the average turnover is 30 million a day.

"It is very risky and it is a miracle that we haven't had any hiccup yet," said trader Neophytos Neophytou.

© Copyright Cyprus Mail

Wednesday, May 31, 2000

[07] Moody’s downgrade follows IMF report

The effective downgrade comes hard on the heels of a damning IMF report last week which warned the government to shore up its economy ahead of European Union accession scheduled after 2003.

Moody's said in a statement that the outlooks on the foreign currency debt ratings of Cyprus and other issuers rated at the country ceilings are also being changed to negative from stable.

Cyprus has consistently scored high ratings from Moody's and another ratings agency, S&P, over the years. However of late the reviews were accompanied by warnings that fiscal reform had to gather pace to eliminate deficits which have been appearing for some time.

Sound ratings are considered vital when a country taps overseas markets for borrowing. In three international bond issues Cyprus capitalised on its high ratings to secure a good turnout.

But with a negative outlook hanging over it things may be different this year, should the government resort to overseas borrowing.

Moody's said the main factors for the downward revision in the outlook were the lack of clear progress in bringing the fiscal deficit under control, the rapid expansion of bank credit, and rising external debt.

It indicated that although the House of Representatives finally approved a long-delayed increase in VAT last week, the revenue raised would be offset by a nearly equivalent amount in tax concessions designed to break the legislative deadlock.

"Agency analysts stressed that the restoration of macroeconomic stability would be vital both to ease the country's eventual transition into the European Union and to remove downward pressure on its ratings," Moody's said.

When parliament hiked VAT by two per cent last week it also introduced a package of tax breaks designed to cushion the impact. But the tax breaks almost eliminate any of the additional benefits from VAT -- an income of £60 million from the additional surcharge against £47.2 million it is giving back in concessions.

Last week the IMF told Cyprus it had to lower its fiscal deficit to four per cent of GDP this year and to three per cent in 2001, and to curb extraordinarily high inflation levels.

Mission leader Dimitris Demekas did not mince his words about the tax concessions, and said the IMF was "disappointed" that additional revenue would be wiped out by the tax breaks.

Projected inflation of about five per cent this year is three times the EU average and a projected fiscal deficit of 4.5 per cent is also out of the guidelines dictated by the EU for countries wishing to adopt the single currency.

© Copyright Cyprus Mail

Wednesday, May 31, 2000

[08] Tourists dive for safety after boat blast

A PLEASURE cruiser went up in flames yesterday, injuring the captain and sending 41 tourists diving for their lives into the sea.

The glass-bottomed Lady Diana from Ayia Napa harbour had anchored about 500 metres off the beach at Konnos bay near Cape Greco in the Famagusta District to allow the passengers to have a swim.

When the captain, 52-year-old Antonakis Gregoriou from Paralimni, tried to restart the boat at 1.20pm he noticed smoke billowing from the engine room.He went down to investigate and seconds later there was an explosion.

Shocked tourists jumped into the water as flames then spread rapidly through the entire vessel. The emergency services were notified at 1.30pm. Two fire engines, a police launch and a police helicopter fought the fire, which was finally put out shortly before 4pm.

The water sports cabin on the beach at Konnos immediately dispatched two boats to evacuate the terrified tourists from the burning wreckage. Sunbathers also rushed into the water to help with the rescue mission.

"They were tourists – Germans, Italians and a few English. They were all worried and panicked," said Panis Ioannou, who sent out the rescue boats.

Two ambulances took 11 tourists to the Lito Clinic in Paralimni and the Napa Olympic Clinic in Ayia Napa.

Two were treated and released by late afternoon. Another two Italian tourists, both young men, were kept under medical supervision yesterday evening, along with Captain Gregoriou, who suffered second degree burns to his face, arms and legs.

Doctor Andreas Shailis at the Lito Clinic told Cyprus Mail another five tourists were treated for nervous shock.

Stephen Bramble, 24, from Dublin was one of the 11 rushed to the clinic from the scene of the accident. But by the evening he had fully recovered and was back at the hotel with his family.

"He’s absolutely fine now. We’re just about to go out and get drunk," said his father Frank. "The boat was called the Lady Diana – rather ironic really," he added.

The £250,000 glass-bottomed boat operated daily out of Ayia Napa harbour and is licensed to hold 170 passengers.

For one Swedish eyewitness, who had been on the same boat on Sunday, it was a close shave.

"My son and I were on that boat. My son is not such a strong swimmer -- it could have been really nasty," he said.

Had the explosion happened further out from the cove, where the wind is stronger and the water deeper, then the accident could have had more serious consequences.

A police investigation into the incident is now under way, and the wreckage of the Lady Diana will be towed back to shore so a full examination can be carried out.

© Copyright Cyprus Mail

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