North Cyprus resident 'not Turkish Cypriot'

A Cyprus Supreme Court judgement denying the return of property in the south of the island to a Turkish Cypriot living in the north has brought a torrent of criticism from Turkish Cypriots.
Ahmet Suleyman had been claiming return of his Limassol property plus compensation of £3,680 for use of part of it for roadworks. He had moved to the north of the island following the Turkish invasion in 1974 but now wished to make use of freer movement between the north and the south.

The case was similar to but not identical to that of Turkish Cypriot Arif Mustafa who has won his fight for return of his home in the southern part of the island – a mirror image of cases taken to the European Court of Human Rights by Greek Cypriots who had been forced to desert properties in the north in the aftermath of the 1974 invasion.

Although the original 2004 Cyprus Supreme Court decision requiring return of Mustafa’s house and orchard in the village of Episkopi, near Limassol was originally blocked by the Cyprus Government, it subsequently dropped its objections. And shortly afterwards it announced new property rights for Turkish Cypriot refugees who had returned to the south.

The crucial difference between the Mustafa case and that of Suleyman, is that Suleyman still lives in the north of the island. That meant he was not in a part of the island controlled by the Republic of Cyprus and was therefore not recognised by Cyprus law as a ‘Turkish Cypriot’, said Supreme Court Judge Frixos Nicolaides.

His property will remain with the Guardian of Turkish Cypriot Properties pending reunification of the island.

Turkish Cypriot message boards were soon buzzing with indignation that the judge should have implied that living in an occupied area of the island made Turkish Cypriots ‘guilty’ of some unspecified crime.

‘In any civilised country such a ruling would be greeted with disbelief’, said one comment. ‘Talk about bending the law’.

However, a similar argument was used in the UK High Court in 2006 to save a property in the north from seizure. Greek Cypriot Meletios Apostolides won a decision in Cyprus courts requiring the British owners of a house constructed on land he had abandoned in 1974 to have the property demolished and compensation paid.

Because of the partition of the island the judgements could not be enforced. However, when Cyprus joined the EU, Apostolides took his case to the High Court, seeking enforcement in the UK.

High Court ruled in favour of the British couple, David and Linda Orams, who had bought the property. Mr Justice Jack held that the Cyprus judgement against the Orams was not enforceable in English courts as in its EU accession treaty the Cyprus Government had signed a protocol admitting it did not have jurisdiction over the occupied north of the island.

A grand coalition is still possible

TWENTY-SIX months ago, I wrote an article exhorting DISY and AKEL – the two parties that have historically similar views on the question of Cyprus – to form a grand coalition at the next presidential elections with the basic objective of resolving in a pragmatic way the problem. I also wrote that it would prove much more awkward to achieve a solution as time goes by.

I do not know whether there is still any possibility left to reunite Cyprus. During the last four years, the texture of the Cyprus problem has been seriously impaired. All aspects are in shambles. Greek Cypriot properties in the occupied north have been built up and sold to foreigners. An influx of approximately 60,000 new settlers from Turkey has pushed the total to 200,000. The Turkish Cypriots have recently distanced themselves from the Greek Cypriots. The anticipation of an adjustment and return of territory (Famagusta, Morphou plus 50-odd villages) is now hovering in an air of dreamland. Who will ever manage to reverse this situation, how and when?

The US government does not accept to meet our high officials, even for a courtesy visit. In Europe, we are completely isolated on matters related to the Cyprus problem and the accession of Turkey to Europe. Our European partners try incessantly to upgrade the Turkish Cypriot community, through direct trade, through the “lifting of their isolation” and through other means. They try to enhance the separate entity of the other community. They do not trust us. They are fed up with us. When they hear the names of Papadopoulos and Lillikas, they immediately identify them with extremism and chauvinism.

Demetris Christofias and AKEL are responsible in a substantive way for the situation with which we are faced today. They have elevated to power those elements which they detested and fought during AKEL’S 80-year history. Those who represent extreme nationalism, blind fanaticism and severe anti-Turkish feelings. AKEL may have verbally differentiated its position from the stance of the President. It may have stated that had it not been for AKEL no dialogue with the Turkish Cypriots would have been possible (Andros Kyprianou, 2005).

Christofias may have underscored, in April 2004, that the Annan plan would reunite Cyprus, not divide it. He may have also said that AKEL does not share the assessments of President Papadopoulos on the plan. But what have they done in practical terms? Nothing else but share and enjoy power and act as obedient servants of the High Authority in the palaces and ministries of power rather than guide the people as to the correct national course.

We have now reached a critical juncture, a point of no return. The AKEL grass roots will have to decide whether they want Christofias or Papadopoulos to lead the country. Whether they want Cyprus to be reunited (provided Christofias adopts the traditional approach of AKEL on Cyprus) or follow the present course which leads to partition.

Whether they envision “rapprochement” or a wider divide between the two communities. Of course the sweet intoxication of power will be in the air while the party members and apparatchiks search and meditate about the subject. So they should do what Odysseus did: tie themselves to the mast of their boat so that they will avoid the lure and be unable to disembark on the island of the Sirens of Power.

If Christofias is eventually the chosen candidate, would a Grand Coalition be possible, if not from the very outset, as least in the run-off? AKEL says no.

However, in a world in which the new French President Sarkozy paid his first foreign visit to German Chancellor Merkel, overlooking the German atrocities and the 50 million victims of the Second World War for the sake of European unity… In a world where the South Africans live together in peace and in Northern Ireland – after years of clashes – Protestants and Catholics have agreed to rule jointly… In a world where Greeks and Turks have set aside their wars and conflicts of four centuries and are building up a new prosperous era in their relations … In a world in which, after 56 years, the first train has crossed the heavily guarded border of North and South Korea “carrying with it a dream of peace”… In a world where the Cold War is over and confrontation has been replaced by a ray of hope for a better life…

In such a world, should we Greek Cypriots remain glued to the differences which we carry with us for decades, as if these differences were more important than the death chambers and the Gestapo of Germany and more striking than the dozens of millions of victims of the international conflicts? Should we remain glued to the slogans and credos of the past: “The Rally party is as strong as an earthquake” on one side and “AKEL is there for ever and ever” on the other side? Should we be infatuated with figures and images, such as “Makarios”, “Grivas”, “patriots”, “resistance fighters”, “traitors”?

Unfortunately this is where we are. We live in the 1950s and 1960s. And we lose sight of the fact that through this attitude of ours we have gradually created a schism among the people, which will lead to partition, due to lack of co-operation among the Greek Cypriots themselves. Such a partition may end up in a future total occupation of Cyprus by Turkey. Because if in a few decades we have a population of 3 million Turks (settlers) in the north and of 1 million Greeks in the south of a divided Cyprus, it does not take a genius to figure out the predicament of this country. The former Syrian and now Turkish city of Iskenderun is a good example.

I firmly believe that a Grand Coalition between all those forces which aim at a historical settlement and at the reunification of Cyprus is neither a wish nor a target. It is a necessity. Whether Christofias or Kasoulides or somebody else is the new President, provided he believes in a realistic solution and in a united Cyprus (and that he will rid us of the political absurdities with which we are faced today) he is fit, as long as he commands the support of the majority of the people and he possesses the strength and the tenacity to work and achieve the solution.

Those who will dynamite this last glimmer of hope (if it still exists) for the sake of expediencies or power sharing will be responsible for the tragic denouement and for the catastrophe which will follow.

Cyprus towards creeping divergence, leads to conflictual divorce, report urges

A report published this month by the European Studies Center of the St. Anthony's College, at University of Oxford (SEESOX), revealed that the status quo in Cyprus is leading to “creeping divergence” and analyzed the possible scenarios of “the divorce” of the Turkish and Greek Cypriots.

The report titled “Cyprus after its EU accession; Getting past the no vote” is the outcome of a workshop organized in Oxford, entitled “Cyprus after accession: Thinking outside the box,” which took place at St. Anthony's College, Oxford on March 9-11, 2006.

The workshop was convened by Othon Anastasakis, Olga Demetriou, Kalypso Nicolaidis, Kerem Öktem and Max Watson, and brought together leading experts on the Cyprus question. Here are excerpts from the report:

Diagnosis of the present

Discussions focused initially on developments since April 2004. Participants voiced differing degrees of dissatisfaction with events. Discomfort from the Greek-Cypriot side was related to the failure of the outside world to understand their misgivings regarding the Annan plan and its failure to take into consideration Greek-Cypriot anxieties: property issues, mobility constraints, inflow of migrants from Turkey, the continued presence of Turkish troops and the status of settlers.

The exploitation and trade of Greek-Cypriot property in the north has been a central source of Greek-Cypriot discomfort since 2004.

The Turkish Cypriot side also voiced strong discontent with events of the past two years and a growing sense of disillusionment and frustration with both the international community, the Greek-Cypriots, and to a lesser extent Turkey.

Living standards in the north have risen considerably since 2004, even if this rise was mostly confined to Turkish Cypriots and did not reach the Turkish settlers whose wealth levels remain significantly lower. Recent growth levels reflect in part an unsustainable boom driven by property transactions and consumer spending, as well as by a growing dependency on the thriving yet volatile economy of Turkey.

Absence of economic ties creates obstacle

Most participants pointed to the absence of significant economic ties between the two communities - other than commuting and a unidirectional trickle of Green Line trade - as the single biggest obstacle to the sustainability of current growth rates in the north. Could the Turkish Cypriot north be entering an ever closer economic union with Turkey? And was there not a sense of unreality when EU economic evaluations of the Republic of Cyprus - however flattering - referred to a Cyprus with the north bracketed off?

If the boom in the Turkish Cypriot north is in part dependent on construction, the recent UK court decision in the Orams Case in favor of the British couple has strengthened the legal basis for the purchase of property in the north, and has further stabilized foreign interest in local properties with property prices expected to raise by about 20 percent as result. In addition to the political fallout, the question is how sustainable this boom is in ecological terms, if the cultural, natural, and historical heritage were damaged by construction without stringent criteria for development?

Tensions and risks of the status quo

For some participants, the current situation can be seen as yet another pause in a long series of unsuccessful negotiations. For some it is already de facto separation. For others, we are witnessing a slow process of “creeping divergence” in the political and economic arenas, the final outcome of which remains unclear. How sustainable is this “creeping divergence” and what concerns does it raise?

• A deepening of economic and monetary bonds between the Turkish Cypriots and Turkey might entrench vested interests against reunification of the island on any terms. Such pull-factors, however, are counter-balanced by a growing sense of a distinct Turkish Cypriot identity among the Turkish Cypriots. These new identity politics insist on a distance both to Turkey and to Greek-Cypriots.

• Turkey-EU relations remain volatile. A probable crisis in the relations between Turkey and the EU, most likely to be triggered by the unresolved status of Cyprus, might disrupt the entire fabric of EU policy towards Cyprus. The Greek side should not feel shielded from negative spillover by its membership status, as the EU cannot prevent further irreversible developments in the field of property or in terms of Turkish Cypriot citizenship in the south.

• Developments on some issues such as property might disrupt the status quo and develop beyond the control of the local elites. It was felt that property in many ways epitomized the conflict and is the lynchpin issue between individual rights and politics. The issue is being tackled incrementally through lawsuits - which might or might not favor the actual restoration of these rights.
• Do rights currently offered to Turkish Cypriots in the Republic of Cyprus (in particular identification documents and access to health services) go far enough in making Turkish Cypriots feel that this is really their state too? For instance, many Turkish Cypriots have called for additional rights in the south, such as voting rights.

However, extending these rights too far runs the risk of creating resentment among Greek-Cypriots who argue that the Turkish Cypriots want to have their own state and still gain the benefits from, and participate in, the Republic of Cyprus, a state they claim not to recognize.

Here is the paradox. Many participants felt that the current situation is unsustainable yet it is hard to see viable alternative scenarios for the future short of bold political initiatives. This is in part because expectations about likely spillovers and scenarios are contradictory and do not point to clear critical junctures or points of no return.

The current situation of creeping divergence might lead to a number of desirable or not so desirable scenarios. Four were identified and discussed during the workshop.

Four scenarios: Taiwan or Yugoslavia?

1) Structural stalemate à la Taiwan: The TRNC remains unrecognized while it continues to perform many of the functions of a sovereign state.

In the long run, some developing countries and members of the Organization of Islamic Countries might recognize the TRNC, even if annexation by Turkey cannot be ruled out. Yet this status quo at the political level must be assessed against the backdrop of the creeping divergence discussed above and therefore potential grievances on the part of both sides.

Such grievances may be getting worse while at the same time softened by economic growth while it lasts. Turkey's EU candidacy factors into this scenario in as much as relations with the EU are becoming ever more conflictual and Cyprus' negative role in those relations is becoming increasingly costly.

2) Amicable divorce (or partition) à la Czechoslovakia: A voluntary separation would presuppose full mutual recognition and a commitment to non-confrontational politics, conditions that do not appear to exist at the moment. Voluntary partition would result in a fully sovereign Turkish Cypriot state, which, alongside Turkey, would eventually become a member of the EU.

In fact for some participants in the workshop, amicable divorce may not be considered a taboo and if executed wisely, could lead to an arrangement quite close to that of a loose federation.

3) Conflictual divorce à la Yugoslavia: There was agreement between the workshop participants that this worst case scenario needs to be avoided at any cost, as it would further deepen the abyss between Greek and Turkish Cypriots and place Turkey firmly outside the European Union. Annexation of the north by Turkey would be a probable result.

4) A cooperative status quo: So as always with the cycles characterizing the Cyprus question, we are back to assessing the parameters of the fourth scenario, that of significant cooperation.

Here, the cost of incremental divergence leading to one of the first three scenarios (with some likelihood attached to each of them) create enough incentives for actors to seek ways to balance these costs through greater cooperation between the two sides, in areas ranging from trade to education, the environment and culture.

Despite their ostensible differences, these scenarios converge around the continued division of Cyprus. Of the four scenarios, only the last has the potential to lead towards a settlement.

Under what conditions, we asked, would cooperative moves constitute building blocks for renewed attempts at a political resolution?

Would the need to adapt the parameters of conflict resolution to the legal, institutional and political realities of EU membership make such efforts easier?

Under what conditions would a ‘Europeanization' of the conflict lead to incremental re-unification or to a scenario of amicable divorce?

Strategies and risks for the future

• Confidence building measures and constructed deals, which condone changes on the ground (on property, mobility.) It was important that key actors think through carefully how some incremental changes open or close options towards a comprehensive settlement.

• Waiting for the right time and seizing “windows of opportunity” for reconciliation requires changes in perceptions, attitudes and incentives. However, decision makers and opinion leaders on both sides need to address the question under which conditions they consider reconciliation a desirable option.

• Giving scope for economic factors to play a positive role in paving the way for reunification. Economics were a sticking point in 2004 because both sides pointed to the income gap between the two sides. Today, both sides enjoy rising levels of economic development, albeit development that is much higher and more sustainable in the south, and more problem-laden in the north.

EU is crucial

In this context, the European Union is crucial. To assess its potential role, we must take into account at least three realities. First, the EU, like other international actors, has limited capacities in that it cannot “impose” a solution, especially having lost the pre-accession conditionality card vis-à-vis the Republic of Cyprus.

Second, the acquis defined in a broad sense to include the process of learning across national experience, constitutes a strong new constraint in defining the contours of a new settlement. Third, the vision of Cyprus's future as a EU hub in the Eastern Mediterranean differs substantially from its current role as a flashpoint and source of difficulties for the EU.

So the workshop tabled a paradox: the EU as a constrained giant may be poorly equipped to promote new solutions for status issues of its own members - witness Northern Ireland – and yet can be a powerful force in shaping the basic parameters of outcomes in a process “managed” by the key local actors and the UN. Perhaps in the belief that this ambiguity can be used fruitfully, all participants seem to converge on the call for the EU to adopt a more active role, progressing simultaneously on different layers of the Cyprus issue.

EU could be more constructive

The EU could play a more constructive, pro-active and creative role in exploring alternatives. The Annan Plan was influenced by historical models of bi- or multi-community governance such as Belgium or Switzerland and sought to conceive a grand plan for Cyprus by adapting some combination of these models.

It therefore lacked the dynamic qualities of the European project, the idea that realities are shaped by spillovers and constructed solidarities, and by the constraints of legal enmeshment.

Even if creeping divergence now best describes processes on the ground, options that further augment the division and cause inter-community relations to deteriorate would do disservice to all parties involved.

While recognizing the political facts in Cyprus, Turkey and the EU, the open-ended spirit of the meeting led participants to call for decision makers and opinion leaders on all sides to consider whether aspects of the ‘Europeanization' scenario might create windows of opportunity to break the status quo and prevent the most undesirable scenario of conflictual divorce.

Cyprus plans for inevitable with crematoria

CYPRUS IS poised to break with centuries of religious tradition by allowing islanders to be cremated, after an apparent yielding on former stiff opposition from the Greek Orthodox Church.As an increasingly popular option overseas of dealing with the inevitable, law experts have been tasked with drafting regulations ending the Mediterranean island's status as one of the few countries in the European Union where cremations are illegal.

"I dealt with cases where it was the last wish of the deceased to be cremated. They could not, and we had to have the body exported to Britain for cremation, and the ashes brought back to Cyprus. It was extraordinary," said MEP Marios Matsakis, who is also a forensic pathologist.

Signs of cemetery overcrowding are everywhere. In one sprawling graveyard in central Nicosia, corridors were being dug up for the dead to be interred. The practice stopped when relatives complained.The law is being prepared amid an apparent yielding of opposition from the Church, which said it still recommended burials because of Orthodox tradition.

"There is no dogmatic barrier for the resurrection of the dead, whether they are cremated or buried, but we do recommend burials," said Bishop Georgios, a member of the Holy Synod, the church ruling body.

"If this law is passed, we will still do the funeral rites, but not on cremated remains," Georgios told Reuters.

Handling the dead has turned into a major issue for authorities because of the influx of thousands of foreigners to the holiday island. At least 50,000 Britons live in Cyprus, including many retirees.Law affairs commissioner Leda Koursoumba told Reuters her initial mandate was to prepare regulations which would be applicable only to members of the non-Orthodox faith.

"My recommendation is however that it should be an option available to them," she said. "Just as freedom of religion is respected in this country, it is also the right of one to choose what happens to their remains."

After some time of wading through government red tape, British businessman Keith McCready said he was flatly rejected when he petitioned authorities for permission to create a crematorium last year.

"We got a reply in no uncertain terms that there was nothing to discuss," said McCready, who added he had not given up hope.McCready said he had backing from the expat community and younger Greek Cypriots.

"Ground is gradually being eaten up, there is not much room to go around for cemeteries," he said.

Although not devoutly religious, Greek Cypriots strictly stick to tradition when it comes to their dead. Many are interred in coffins, and, in an even older tradition confined to some mainly rural communities, buried wrapped in just a shroud."Christ was buried, and so were our Saints, and we have their remains today which we revere," said Bishop Georgios. "It is also a form of solace visiting a grave, knowing that your relative's remains are there."

Matsakis said Cyprus should catch up with the times."I'm sure Cypriot society will look at it logically. This is not something that will be imposed, but a question of choice and respecting the wishes of the dead."

Nothing to stop refugees selling property in north to foreigners

DISY DEPUTY Giorgos Georgiou yesterday continued the debate over illegal property transactions by saying there was nothing in the law that deterred Cypriots from selling their property companies in the north to foreigners.

According to Georgiou, the reason that he chose to give his list of high-profile names of Greek Cypriots involved in such transactions to the Interior Minister and not the Attorney-general was because there was nothing in the law that stopped this from taking place.“There is no legislation that stops Cypriot companies that were established before 1974 in the north from selling their shares to anyone in particular from abroad. Nothing,” Georgiou told state radio yesterday.

In a dramatic day regarding the issue of Greek Cypriot property in the north on Thursday, Georgiou told the House of Representatives that he had evidence and names that when publicised, would “give a lot of people heart attacks”.

The DISY deputy said that economic factors were also involved, while he also claimed another plot, where Greek Cypriot land developers were working in association with Turkish Cypriots and foreigners to sell the properties of refugees.“There are developers working in conjunction with illegal offices in the north and we have had a number of allegations from refugees who claim that they have been approached by these people who told them that they can put them in touch with foreign companies that can sell their properties,” he added.

According to the newly appointed Government Spokesman, Vasilis Palmas, this phenomenon was not new to the government.“This is not something that has come to light today, it is something that has been happening for some time now. It is up to the people to judge these actions but I have to say that only with the solution to the Cyprus problem will this stop,” he said. DIKO party leader Marios Karoyian said yesterday that politicians in Cyprus should refrain from making such shock statements at the House if they have not been substantiated.“Comments on this matter especially should not be made without them being verified.

The danger of this is that the wrong messages are given about abroad,” he commented. Meanwhile the British High Commission yesterday denied it had ever advised a Greek Cypriot refugee to take his claim to the property commission in the north.

According to refugee from Yerolakkos, British officials had told him to appeal to the commission and to act in secrecy when doing so.Yesterday, the British High Commission released a statement denying that their staff told anyone to appeal to the commission, adding that given the perplexity of the issue, they advised people to seek legal advice.

Attorney-general Petros Clerides said that while a fuss should not be made about the issue just yet, there were questions that remained unanswered.“This needs to be looked into in order to determine whether these are just the actions of an irresponsible individual, in which case he would have a host of questions to answer to, or whether it is the policy of the British High Commission,” he said.

“On the other hand, there is the question on why the refugee contacted the British High Commission and not the Cypriot authorities.”

List of names to ‘shock a nation’

DISY deputy makes dramatic statement to HouseTHERE WERE dramatic scenes in the House yesterday as a DISY deputy claimed to have a list of high-profile names of people dealing in properties in the north.

The allegations came on the same day that Britain was accused of supporting the Property Commission in the north.DISY deputy Giorgos Georgiou yesterday claimed that his list of names would “give a number of people a heart attack”.

While refusing to be drawn on the identities on the list, Georgiou said he was going to hand it over to the Interior Minister and that it did not contain any deputies.

According to Georgiou, the evidence and names he had were so “scandalous” it would leave politicians and the Cypriot public in a state of shock.“I want to say that we have stirring evidence and names of shareholders in a company, set up in 1968 in the Cyprus Republic, that purchased 300 donums of land in Kyrenia,” he said yesterday.“These shock revelations will cause a lot of people to have heart attacks.”

The information is said to include evidence of companies based in the south involved in illegal transactions of Greek Cypriot property in the north and Turkish Cypriot properties in the south. Georgiou said the two owners of the specific company were British.

He said one of the owners he managed to contact maintained he was unaware that he was a shareholder in such a company.His claims come just a week after AKEL Deputy Aristofanis Georgiou said eight British MPs were involved in illegal property transactions in the north. It was also heard that since the north’s property commission was formed in November 2006, 7,512 foreigners applied for the right to buy property, with 2,560 of them being approved.

Aristofanis Georgiou added that there are still 4,590 applications pending while 230 have been withdrawn.The British High Commission yesterday released a statement denying the claims of a Greek Cypriot refugee permanently residing in the UK, who insists he was told by the a British diplomat to appeal to the property committee in the north.“As all Cypriot refugees wanting to find out the situation of their properties in the occupied areas, I called the British Embassy who told me to take my claim to the President of the Turkish Republic of Northern Cyprus,” the refugee told state television yesterday.

“He also told me to fill in the forms so that I can get compensation from the property committee in the north.”According to the refugee, the diplomat advised him to act in secrecy when he appealed to the committee.“He told me that he could not see the Cyprus problem being solved in the next few years, adding that if I sent the form to the committee I should do this in secrecy as I could be accused by the Cypriot government and the public of being a traitor,” he added.

The British High Commission in Nicosia yesterday released a statement denying the claim, saying that they underlined the danger in buying property in the occupied areas.

“We have never advised, do not advise and will not advise anyone to appeal to the Property Committee in the north. “Our travel documents are very clear, do not mention the Property Committee in the occupied areas and underline the dangers in buying property in north Cyprus,” yesterday’s statement read.

Why you should be grateful to live in Cyprus

ANYONE who thinks they pay too much tax in Cyprus should be grateful they don't live in Slovenia, France, Belgium or China, according to the latest edition of the Forbes Tax Misery Index.Both employees and employers in Cyprus are left with more in their pockets every year than their counterparts in 50 other countries.

Only the Maltese, Georgians, and residents of Hong Kong, Qatar and the United Arab Emirates fare better.Forbes says tax misery levels in Cyprus stand at only 73.3 per cent, which actually qualifies the island for what Forbes called its Tax Happiness Index.France’s tax misery level is nearly 167 per cent, Belgium’s 156 per cent and China’s 152 per cent, which means people who earn 50,000 euros a year there can end up paying more than 20,000 euros in tax and social insurance deductions. “We've ranked countries based on how large of a cut they take.

We call it the Forbes Misery Index (or, for those countries with low taxes, the Forbes Happiness Index),” said Forbes on its website. “A look at this index shows an executive's gross salary may be reduced by almost 60 per cent if he has his office in Denmark or Sweden. Almost as much is lost in Belgium, and 40 per cent of your pay cheque may be lost in France or New York City to income and social taxes.”By contrast in Qatar, executives “get to keep every euro or dollar their company pays them”.

Using 50,000 euros, as a sample annual salary in all 57 countries, Forbes makes its calculations based on the sum of corporate income, personal income and wealth taxes plus employer social security, employee social security and VAT/sales taxes at the highest marginal rate in each locale.A married person with two dependents earning 50,000 euros in Cyprus can expect to take home 39,597, which amounts to 79.2 per cent of total pay.

In Cyprus, the take home pay for single people earning 50,000 euros is the same.And the island’s low ten per cent corporate tax rate means that employers actually end up paying out less than the gross salary they actually give you. A 50,000 euro a year employee actually costs his employer 47,349 euros after corporate tax.In fact, Cyprus has the lowest corporate tax rate outside of the UAE’s five per cent. The highest was in India, with 42 per cent and Japan at 41 per cent.In Malta, despite its slightly higher 15 per cent corporate tax rate, employees’ take-home pay is one of the highest.

Workers take home 47,415 euros or 94.8 per cent of their 50,000 euro salary. Only in Qatar do employees take home the full 50,000.Sadly for Slovenians, they are left with the smallest net pay cheque, 27,627 euros out of 50,000, and Belgium, Denmark, Sweden, Finland, Italy and the Netherlands are not far behind.

Forbes said that for employees at the 200,000 euro salary level, the Misery Index shows that the best locations for a married executive to maximize after-tax salary in Europe are Georgia, Russia, Ukraine and counties in Central Europe. “Way down the list are Switzerland and Luxembourg. The countries with the lowest total salary cost to the employer are Denmark, Ukraine, Cyprus, Russia and the Netherlands,” Forbes said.

For those earning 1,000,000 euros a year, things are bleak in Slovenia where you end up with less than 400,000 of your hard-earned money after the state has taken its share. The Cyprus government will, however, let you keep around 650,000.

Northern Cyprus Passport Holders May Enter Eight Countries, British Parliamentary Committee Report

Holders of passports issued by the Turkish Republic of Northern Cyprus (TRNC) may enter eight countries, according to a report prepared by British Parliament`s Select Committee on Foreign Affairs.

The report, published on British Parliament`s internet site, said that TRNC passport holders may enter the United States, United Kingdom, France, Pakistan and a few other countries.
Other countries are Azerbaijan, Iran, United Arab Emirates and Kyrgyzstan, said sources.

The irony of history in Cyprus

THERE is an ancient adage from English common law that says possession is nine tenths of the law. This reflects the fundamental reality that someone who is in possession of property is able to use it and enjoy the fruits derived from its use, and most practically it is very difficult to disturb or take away the property over which he has possession.

Cyprus serves as a good illustration of the truth behind the adage, where 33 years since the invasion, more than a quarter of a million Cypriots are still unable to return to their homes in peace and security on either side of the Green Line.

Three years after the rejection of the Annan plan by the Greek Cypriot community, we see the Turkish Cypriot authority permitting the development of Greek Cypriot properties on an unprecedented scale. In particular, the Morphou area is being opened up to development in a way that will greatly complicate the resolution of the property aspect of the Cyprus problem if the parties ever get back to the negotiating table.

This is not to try and resurrect a discussion on the virtues or vices of the Annan plan or the wisdom or folly of its rejection by the Greek Cypriot community. That is the road not taken. We will all have to wait for the verdict of history and move on with the times.

What is undeniable is that the period leading up to Cyprus’ EU accession in 2004 offered a rare opportunity to settle the problem, as the Turkish government abandoned the policy of ‘no solution is the solution’ held by its predecessors since the 1974, and gave its support to the efforts of the international community to broker a settlement on the lines of the agreed UN framework: a federal, bi-communal and bi-zonal republic.

Of course, we now know that elements within the Turkish military and the ‘deep state’ in Turkey were contemplating a coup to thwart any settlement on the lines of the Annan plan, but we will never know what the fate of the plan would have been, as our leader got the resounding ‘no’ he so emotionally pleaded for.

No wonder anti-settlement forces on the Turkish side see him as their saviour.The fact is that President Papadopoulos, rightly or wrongly, is seen by the international community as not being truly interested in a settlement consistent with the agreed framework. He can argue until the cows come home that our rejection of the Annan plan was simply a rejection of that specific plan and not of the underlying principles, but until he shows his cards with specifics as to what he sees as the outlines of a settlement his demonising of the Annan plan will convince most observers and many on the other side that all his talk of a settlement is so much jockeying for position to preserve the position of the Greek Cypriot community as the custodian of the internationally recognised Republic of Cyprus. Will there be another historic opportunity for a settlement? One can hope, but the prospects for the moment are not auspicious.

It is common knowledge that the only incentive for Turkey to compromise on Cyprus is its own accession to the EU. Having been absolved of any responsibility for the impasse by the events of 2004 and having secured a road map for accession negotiations that does not require it to do more than open its ports and harbors to Cypriot flagged traffic at some point during the negotiations, one should not expect serious concessions from the Turkish side until its accession is virtually certain.

With the election of Nicholas Sarkozy in France and Angela Merkel in Germany, we can predict that Turkey’s accession process will at the very least become more problematic and will slow down even further. Unless there is a significant shift in public opinion in the leading states of the EU over the next few years, it would not be surprising if the EU at some point changes tack and makes it clear to Turkey that its best hope is to negotiate a special relationship with the EU falling short of full membership.

If that were to happen, it is unlikely that the EU would make solution of the Cyprus problem a precondition of a special relationship. On the contrary, the pressure would be on us to agree to such a special relationship and not to do anything that would put at risk a European solution to the Turkish accession problem.

Undoubtedly, the UN will soldier on and try to kick start the process agreed to last summer. Perhaps with pressure from various sides, the technical committees may meet and may even get down to some substantive discussions.

Everyone will probably agree, however, that the time is not right to reopen negotiations for a comprehensive solution. Apart from anything else, the best we can hope for is that Mr.Erdogan and the military in Turkey will come to a modus vivendi that will allow the continuation of Turkey’s EU path. A coup in Turkey or a victory by the hard Kemalist factions would spell the end of that path and remove any incentive for a Cyprus compromise.

Even a renewed and strengthened mandate for Erdogan would not do much in the near term for comprehensive negotiations.Of course, a lot can happen to change the political scenery and set up new circumstances for another ‘historic opportunity’ to solve the Cyprus problem. But if the past is any guide, these sorts of opportunities are rare birds indeed.

Having rejected the last one, based in part at least on the calculation that our EU membership would strengthen our negotiating position, perhaps the greatest irony of all would be Turkey, the EU, or both turning away from the accession process. In such an outcome the greatest loser would be Cyprus.

Cyprus in EU Chiefs of Defence meeting

European military capabilities and issues concerning their improvement with a view to achieve the goals set out in the framework of the Common Security and Defence Policy, were discussed during a meeting of the EU Chiefs of Defence, held in Brussels on Friday.

Cyprus was represented at the meeting by National Guard Chief of Staff Lieutenant General Constantinos Bisbikas.

During the meeting, EU member states and the European Defence Agency exchanged views on the issue of the long-term development plan of the EU military capabilities, apart from the ongoing work on the Headline Goal 2010.

Participants were also briefed on progress achieved as regards the setup of Tactical Battle Groups. Cyprus has provided a Sanitary Group and a Military Police Group for the Battle Formation, in the framework of the Balkan battle group, in which Greece, Bulgaria and Romania also participate. The battle group in will be at the disposal of the EU during the second half of 2007.

The meeting also dealt with developments as regards the EU mission in Kosovo and other EU operational activities, such as the provision of support to the African Union by the EU for the management of the AMIS operation in Sudan (Darfur region). Cyprus has been participating in this mission since it began in July 2005 with one officer at the Operational Headquarters, which has its Head Office in Sudan’s capital, Khartoum.

Participants were also briefed on the conclusions derived from the EU operation in Congo, EUROFOR RD Congo, which was concluded in December 2006. Cyprus participated in this operation with two officers.

Commission proposes that Cyprus adopts the euro in 2008

The European Commission concluded that Cyprus has achieved a high degree of sustainable economic convergence with the euro area Member States and that it fulfils the necessary conditions to adopt the euro.

On the basis of this positive Convergence Report, the Commission proposes to the Council that Cyprus adopts the euro on the 1st of January 2008. The final decision will be taken by EU Finance Ministers in July, after consultation of the European Parliament, and following a discussion by EU leaders at their June summit.

“Cyprus has achieved a high degree of economic convergence with the euro area and is ready to adopt the euro in January 2008. However, in order to ensure that euro adoption will be a truly successful story, Cyprus must continue to implement stability-oriented policies in order to safeguard its external competitiveness. In addition, Cyprus must also speed up and finalise the crucial practical preparations to ensure that the changeover takes place smoothly, as was the case in Slovenia at the beginning of this year” said Joaquin Almunia, European Commissioner for Economic and Monetary Affairs.

On 13 February, Cyprus asked the Commission to assess that it met the criteria necessary to adopt the euro. To become part of the euro area, a European Union country must have achieved a high degree of sustainable economic convergence, measured against the criteria set out in Article 121(1) of the EU Treaty regarding the government budgetary position, price stability, exchange rate stability and convergence of long-term interest rates. Compatibility of the legal framework with the Treaty must also be examined.

Having carefully assessed the request, the Commission today adopted a Convergence Report concluding that Cyprus meets the criteria and proposes to the Council that it adopts the euro next January. The European Central Bank also adopted a Convergence Report reaching the same conclusion.

Inflation

The average inflation rate in Cyprus during the 12 months to March 2007 was 2.0 percent, below the reference value of 3.0 percent. Cyprus has respected the reference value since August 2005 and, based on the present outlook, is likely to continue to do so in the coming months. Moderate core inflation indicates that underlying inflationary pressures have remained limited.

Progress towards price stability has been supported by wage discipline and increasing competition in some product markets, also related to integration in the EU single market and effects of globalisation. The improvement in price stability is based on sound foundations, suggesting that the moderate levels of inflation will be maintained after euro adoption.

Nevertheless, Cyprus will need to remain vigilant to contain the potentially inflationary impact of further interest rate (too obscure) convergence, to mitigate credit growth and to avoid second-round effects from increases in indirect taxes. A prudent fiscal stance aimed at avoiding the build-up of excessive demand pressures, and wage developments in line with productivity gains would also be required.

Budgetary situation

Cyprus had a budget deficit of 1.5% in 2006, down from 2.3% in 2005, a figure which had enabled the Council, acting on a Commission proposal, to close the excessive deficit procedure started upon EU accession, in 2004. For 2007, the Commission's Spring Forecast projects an almost unchanged deficit (1.4 percent of GDP). The government debt increased between 2000 and 2004 but has been on a declining path since 2005 to reach 65.3% of GDP in 2006. In 2007, it is seen declining further to 61.5% of GDP.

The Ecofin Council has considered the budgetary strategy outlined in the latest Convergence Programme as sufficient to reach the Medium-Term Objective of a deficit of 0.5% by 2008 and the underlying risks broadly balanced. However, Cyprus was invited to control public pension expenditure, namely through further reforms in order to improve the long-term sustainability of the public finances and to implement the fiscal consolidation path as foreseen in the programme.

Exchange rate

The Cyprus pound has participated in the Exchange Rate Mechanism ERM II since 2 May 2005, i.e. for 24 months at the time of adoption of this report. During those two years, the pound has consistently traded in the upper half of the fluctuation band, close to the central rate, and has not experienced severe tensions.

Long-term interest rates

The average long-term interest rate in Cyprus in the year to March 2007 was 4.2%, below the reference value of 6.4%. Average long-term interest rates in Cyprus have been below the reference value since November 2005. They have decreased substantially in the past few years as have spreads to the euro area, which testifies to the low residual country risk priced in by markets.

Legal convergence

All outstanding incompatibilities have been addressed in a Law amending the Central Bank of Cyprus Laws of 2002 and 2003 adopted by Parliament on 15 March 2007. Legislation in Cyprus, in particular the Central Bank of Cyprus Law, is now compatible with the requirements of the EC Treaty and the ESCB Statute.

Cyprus to boost cooperation between Greek and Turkish Cypriots

Cyprus Council of Ministers approved on Wednesday a set of measures aiming at boosting economic cooperation between Greek and Turkish Cypriots, Government Spokesman Vasilis Palmas announced.Palmas did not give further details, noting that Finance Minister Michalis Sarris will present the measures in depth in a press conference this week.

For three years now the government provides free medical and pharmaceutical care as well as other social benefits for Turkish Cypriots and has taken several other steps towards promoting trust and cooperation between Greek Cypriots and Turkish Cypriots.

50 Cent heads for Cyprus

MULTI platinum selling hip-hop superstars 50 Cent and Akon have been booked to give a one-off performance at Nicosia GSP this summer.

The headline acts are due to perform at the launch of Medfest, the first international music festival organised by AP Entertainment and One Events, on Saturday July 28.

Hip Hop mogul 50 Cent, who sits comfortably alongside the likes of Tom Cruise and Oprah at No. 8 on the Forbes Power List, will be performing an exclusive set showcasing tracks from his forthcoming album Curtis, as well as previous smash hits including Candy Shop, Just a little bit and In da club.

Also, fresh off his successful US tour with Gwen Stefani, Akon is set to perform hits from his current album Konvicted, which has sold over three million copies to date since its December release.

AP Entertainment Managing Director Philip Stavrou said the purpose of the festival was to give Cypriots the opportunity to experience a concert of such a grand scale firsthand.

“We think Cyprus is ready for this. Everyone in Cyprus knows about concerts that are held in other places but they don’t go to them. We thought it would be nice to have something of their own,” Stavrou told the Sunday Mail yesterday.

Based on the success of this year’s festival and the response from the public and businesses, Stavrou said the organisers hoped to host the festival for at least another five years.

“This is not just a one-off thing,” he said.Stavrou said booking the two superstars had been made possible through contacts that members on the organisers’ team had made during their years in the industry working for Warner Brothers and MTV Europe.

He added there would be two or three more big names due to join the festival, whose names would be announced in the following weeks.

“We might have a well known reggae artist just to mix it up a bit,” Stavrou said.

Tickets for Medfest went on sale yesterday via Ticketweb and are also available directly from the GSP Stadium box office, and all other usual ticket agents.

Tickets are priced from £30. Standard booking fees apply.

www.ticketweb.co.uk or www.medfest2007.com; Ticketweb, 0044 8700 600 100 (24hr); GSP Stadium, 22-874050

President of International Rugby development in Cyprus

THE president of Development of The International Rugby Board, Michel Arpaillange arrived in Cyprus yesterday for a series of high level meetings with the Cyprus Rugby Federation (CRF).

On Sunday 13th May, he will be attending the Paphos Tiger’s Fun Day which is an all day event and takes place at the Kiniras Sports Centre in Paphos. The main event of the day will be a rugby match between the Paphos Tiger’s President’s 15 against the best of the Combined Services on the Island.Kick-off is at 3.00 p.m.

On Monday, Arpaillange will be meeting both the Executive and General committees of the CRF where he will be informed of the Federations immediate plans for developing rugby on the Island.These include; introducing rugby at schools, the establishment of rugby academies for boys and girls of all ages in the main towns, the introduction of seminars and training courses for coaches, referees and touch judges, the formation of additional clubs along with a number of other important plans.

On Tuesday, he is scheduled to meet Costas Papacostas of the Cyprus Sports Organisation.Later he will be meeting with the Cultural Secretary of the French Embassy Madame Bassereau Dubois, who will inform him of the proposed screening of the Rugby World Cup, which is being held in Paris this year in September.

The main matches will be screened at the French Cultural Centre in Nicosia, in association with the Nicosia Barbarians Rugby Club.

It is hoped that this visit will result in the upgrading of the CRF’s status with the Federation of International Rugby Association (FIRA AER) from associate member to full member.This will entitle Cyprus to receive funding from the FIRA AER and to participate in the 2011 Rugby World Cup.

Chelsea's Morais moves to Cyprus

Chelsea defender Nuno Morais has joined reigning Cypriot champions Apoel Nicosia.

The 23-year-old has signed a two-year-deal with Apoel.
Morais failed to establish himself in the first-team squad at Stamford Bridge after joining from FA Penafiel in August 2004.

He made his last appearance for Chelsea as an 88th-minute substitute in the goalless draw with Manchester United on Wednesday 9 May.

The end of Cyprus’ leverage on Turkey?

IF CYPRUS is a mere thorn in the side of Turkey’s EU accession, then France has suddenly become a millstone around its neck.It might appear gratifying that, since Nicolas Sarkozy’s election as President last Sunday, the EU’s second largest member state has very serious doubts about Turkey’s accession, but for Cyprus such support may prove a double-edged sword.

After three years of making a nuisance of itself in corridors of Brussels, Nicosia finally appears to have a strong public ally.The only hitch is that in a currently volatile Turkey, where there is a strong possibility Ankara may turn its back on the EU, there will be no incentive whatsoever for Turkey to make a deal on Cyprus.

The fact is, that as things stand, Cyprus suddenly desperately needs Turkey’s EU process on track, while Turkey feels less minded than ever to make any move on Cyprus to appease Brussels. The Greek Cypriot side has always viewed EU accession as a lever against Turkey, but in the last three years it has seen the EU bending over backwards to smooth Ankara’s path, resulting in zero gains for Nicosia.

Turkey has been used to getting what it wants, getting away with flouting the customs union protocol to normalise trade with Cyprus, receiving a slap on the wrist from Brussels but no orders to open its ports and airports.

Is that all about to change, with Sarkozy repeatedly insisting during his campaign that Turkey was in Asia and had no place in the European Union?

Brussels has been rushing to soften the blow, saying this week it would open three more negotiating chapters with Turkey by the end of June. Talks on eight chapters have been frozen over the protocol issue. Nicosia must now walk the tightrope between supporting its new best friend and keeping Turkey in the game for the benefit of a Cyprus settlement, preferably without seeing Ankara receiving the preferential treatment it has until now.

''It’s up to Turkey itself to prove with actions and not words that it is entitled to receive a European identity, and this proof depends on Ankara's full compliance with the European prerequisites and its response with its European obligations and commitments,'' the Government Spokesman said on Monday, when asked about Sarkozy’s statements.

One diplomat said Cyprus had forged a close relationship with France in the last few years, despite diverging views on Turkey’s accession.

“Most people would say that while Sarkozy is in power Turkey’s EU progress looks less certain,” he said.

“For a country like Cyprus, this should be an issue of concern. If you’re using the EU process to push Turkey into a corner to make compromises… if Turkey is turned, or turns away, you’re left hanging with nothing.”

Analyst Hubert Faustmann said it was obvious Sarkozy’s election did not bode well for the Cyprus issue. “But the government’s policy is contradictory. Papadopoulos’ policy is squeezing concessions out of Turkey and jeopardising its accession. This is a high-risk strategy, and Cyprus will end up in a corner,” he said.

Faustmann said Cyprus’ relations with France were akin to the old saying, ‘The enemy of my enemy is my friend’, but he warned that if Nicosia took this road it would only block a solution, which now seemed more remote than ever. “This is a high-risk gamble that is less and less likely to pay off,” he added.Another analyst, James Ker-Lindsay, said it was possible that Turkey’s generals may decide that Sarkozy's election meant there was now no real prospect of Turkey joining the EU, which might prompt them to a harder line against the ruling Justice and Development Party.

The possibility of a coup could not be discounted either, he said, which would end any remaining hopes Turkey has for membership. “A military intervention would almost certainly kill of hopes of any settlement to the Cyprus dispute,” he said.

But DISY MEP and possible presidential candidate Ioannis Kasoulides said it was too early to draw any conclusions on how the developments in France and Turkey would affect the Cyprus issue.

Kasoulides said Sarkozy had been very explicit in what he said about Turkey: “He openly expressed something that has been lurking around the public opinion of certain European countries,” he added.Kasoulides thought EU negotiations with Ankara would continue for a while at a slower rate, and that perhaps the issues of a status short of full membership would come up at another stage.

He also warned of the risk of Turkey turning its back on the EU. But he added that, even with the prospect of full membership until now, he had not seen Turkey make the slightest concession on Cyprus.

Sarkozy Will Block Turkish EU Membership

NICOSIA, Cyprus -- Nicolas Sarkozy's election as president of France is likely to make Turkey's membership in the European Union more elusive than ever, Turkish analysts say.

His categorical opposition to Turkish membership in the 27-nation bloc is "hammering the last nail into the coffin of Turkish-EU relations," one analyst said.

"This is bad for Turkey," said Mehet Ali Birand, a leading Turkish liberal commentator.
During his electoral campaign, Mr. Sarkozy stressed his view that Turkey is not a European country and that its membership would dilute the bloc's cohesion and dangerously stretch its borders. Mr. Sarkozy also has said he would sign a French bill passed by parliament penalizing all those who deny the genocide of Armenians.

Recep Tayyip Erdogan, Turkey's embattled prime minister, asked the European Commission "to avoid statements and attitudes that would negatively affect our negotiating process."

As it is, the process has been dogged by problems that include Turkey's refusal to recognize the Greek Cypriot government, the degree of Turkish freedom of expression, the army's role in politics, and its refusal to acknowledge World War I Ottoman massacres of Armenians.

Turkey's negotiations with the European bloc have stalled. The European Union has suspended talks on eight of 35 parts of the negotiating process, but European Commission President Jose Manuel Barroso said the whole concept is based not on one country's views but "on the basis of a mandate decided unanimously."

Instead of admitting Turkey, Mr. Sarkozy has proposed that the European Union give the country the leading role in a planned grouping of Mediterranean-area countries. Turkey has rejected suggestions of a "privileged association" with the bloc.

Regardless of whether Mr. Sarkozy's election will have an immediate effect on Turkey's EU talks, relations between France and Turkey appear to be heading into troubled waters.

After the French National Assembly vote on the massacres of Armenians in October, Turkey froze contacts with a French pipeline consortium and warned the United States that approval of a similar bill by the U.S. Congress would cast "a serious shadow" on its relations with Washington.
According to the mass-circulation Istanbul daily Milliyet, Mr. Sarkozy's election "will further worsen the already chilly Turkish-French ties."

Meanwhile, popular disinterest among Turks toward the European Union has been growing. "The enthusiasm is gone," said Can Baydarol, a Turkish political scientist. "Turkey could easily move toward a more isolationist policy."

Sarkozy making waves with proposal to form Mediterranean Union

PARIS -- A proposal by Nicolas Sarkozy to gather the European, Middle Eastern, and North African countries of the strategic Mediterranean rim into an economic community along the lines of the early European Union has begun making waves even before the French president-elect takes office.

The initiative, outlined by Sarkozy in a campaign speech in February, went largely unnoticed until he repeated it in his electoral victory address last Sunday evening. Plans are still being drawn up, Sarkozy's aides said Thursday, but even at this early stage the proposal has cascading implications for the region.

Such a union, even if primarily economic, would necessarily involve the member countries in discussions of controversial issues such as Turkey's membership in the EU and illegal immigration via North Africa.

It would bring Israel and its Arab neighbors into a new assembly that Sarkozy apparently hopes could tackle the intractable problem of Middle East peace.

Initial reactions have ranged from enthusiasm in Spain to cautious approval in Israel to outrage in Turkey, which sees the proposal as a ploy to keep it out of the EU.

"This cannot be an alternative to Turkish membership in the EU," Egeman Bagis , the chief foreign policy adviser to Prime Minister Recep Tayyip Erdogan of Turkey, said in a telephone interview.
The "Turkish problem" is clearly in Sarkozy's sights. He campaigned on a platform of keeping Turkey out of the EU, maintaining that the large Muslim nation is part of Asia Minor, not Europe.

The notion of regional cooperation in the Mediterranean is ambitious but more timely than ever, diplomats and observers said. North Africa is a key transit route for illegal immigrants heading for Europe.

The site of resurgent Islamic terrorism, it is home to substantial natural gas reserves.
Sarkozy, who takes office next week, has said that he wants the countries ringing the Mediterranean -- Portugal, Spain, France, Italy, Greece, Cyprus, Malta, Turkey, Lebanon, Israel, Egypt, Libya, Tunisia, Algeria, and Morocco -- to form a council and hold regular summit meetings.

He wants to anchor regional cooperation in the fields of energy, security, counter terrorism, and immigration on a trade agreement, and create a Mediterranean Investment Bank, modeled on the European Investment Bank, that would help develop the economies on the eastern and southern edge of the region. He has offered French expertise on nuclear energy in return for access to North Africa's gas reserves.

A Mediterranean Union would work closely with the European Union and might eventually form joint institutions with the 27-nation bloc. But it would be a separate organization, Sarkozy said in the Toulon speech.

In Spain, Juan Prat , ambassador at large for Mediterranean affairs, praised the proposal as a way to deal more effectively with new risks such as immigration, terrorism, and climate change.

In Israel, where Sarkozy's Toulon speech was circulated in diplomatic circles, the reaction was also positive. When Deputy Prime Minister Shimon Peres called Sarkozy last Monday to congratulate him on his election victory, he said that the idea of a Mediterranean Union was "very important" and that he was interested in discussing it further, diplomatic sources said.

A senior Israeli diplomat, who declined to be identified, said: "My feeling is that there is every reason to believe that Israel would be interested in this because it gives us another opportunity to have a dialogue with countries that we sometimes have difficulties holding a dialogue with."

Cyprus passes final Maastricht test

But will there be a political one?

Cyprus appears to have passed the final Maastricht test in what could be the last inflation report before the country’s European partners consider whether Cyprus has met all the Maastricht criteria for adopting the euro.

The EU-harmonised consumer price index in April rose by 1.6% compared with April 2006, slightly higher than the 1.3% recorded in March.

However, the all-important 12-month rate fell slightly, to 1.9% compared with 2.0% in March.
In order to meet the Maastricht inflation criterion, the 12-month harmonised inflation rate in Cyprus must be no more than 1.5 percentage points above the average 12-month harmonised inflation rates in the EU countries with the lowest inflation figures.

In March (latest available data), these were Finland at 1.2%, Poland at 1.5% and Sweden and the Netherlands, both with 1.6%. This yields an average of 1.4% and thus a Maastricht target of 1.4% + 1.5% = 2.9%.

If the 12-month EU rates for April are the same as in March, Cyprus will have met the criterion with a full 1% of leg room.

On May 2nd Cyprus passed its two-year anniversary within the Exchange Rate Mechanism (ERM2). Eurozone member states as well as the Commission and the European Central Bank will now consider whether Cyprus has fulfilled all four Maastricht criteria on inflation, exchange rates, fiscal performance and interest rates.

A country must spend at least two years within ERM2 without devaluation or serious currency fluctuation in order to meet the criterion on exchange rates.

This requirement has already been met. The maximum shift in the rate of the Cyprus pound against its central parity rate within the euro (0.585284 per euro) since 2005 has been 2% but even then, the pound was stronger than the central parity rate. Today the pound is much closer, at just 0.4% above the central parity rate.

The two other criteria relate to fiscal performance and interest rates. The budget criterion was met in 2006 with a general government deficit of only 1.5% of GDP (the threshold is 3%) and the public debt criterion will probably be deemed to have been met because the debt/GDP fell from 69.2% of GDP to 65.3%, even if it was not below the ideal 60% threshold.

Long-term interest rates have long been within range. So that leaves only the nagging Greek Cypriot worry that someone out there will use the decades-old Cyprus problem as an excuse to veto Cyprus.

The Cyprus problem complicates EU business in all kinds of unrelated areas and Greek Cypriots currently take most of the blame for lack of progress in solving the problem.

Germany quashed rumours last month that it would veto Cyprus by confirming that Cyprus would be judged in accordance with the treaty rules. But rumours popped up again that a veto could come from another quarter.

EU pleased with Cyprus spending plan

BRUSSELS said yesterday it was pleased with the way EU funds to Cyprus over the next seven years were to be spent.In its National Strategic Reference Framework (NSRF), Cyprus describes how it is going to invest the EU funding of €612 million to deliver growth and jobs from 2007 to 2013.

Regional policy Commissioner Danuta Hubner and Employment and social affairs Commissioner Vladimir Spidla expressed satisfaction at the mix and priorities chosen by Cyprus.

"I am very happy that the Cyprus' NSRF includes a significant commitment to the Lisbon strategy for jobs and growth; 58.9 per cent of the investment has been ‘earmarked’ for Lisbon related expenditure,” said Hubner, who was in Cyprus recently to inspect EU-funded projects.

“This is the proof of Cyprus' commitment to the Lisbon Strategy. I am confident that we can make an important contribution to improving the competitiveness of Cypriot regions through this new generation of cohesion programmes,” she added.

The adoption procedure has now been completed and the European Commission issued its decision on elements of the Cypriot plan, including priorities, indicative annual allocations, and list of operational programmes."

The Cyprus strategy contains a strong commitment to promoting the quality and intensity of investments in human resources. This shows once again that more and better jobs lie at the heart of the European reform agenda. With the priorities chosen by Cyprus, workers will be able to better adapt to changing circumstances. The strategy will also boost employment and promote social inclusion,” said Spidla.

Cyprus agrees package with EU to promote jobs and economic growth

Cyprus has agreed a funding package with the European Union (EU) worth €612 million (£412 million) over the next seven years designed to stimulate economic growth and job numbers in the country.

As part of the country's national plan and EU cohesion policy, commissioners congratulated Cyprus on its choice of priorities for the funding, claiming that it clearly demonstrates Cyprus' commitment to Europe. Danuta Hubner, regional policy commissioner, explained that the money will improve the competitiveness of the Cypriot regions, attracting new investment in the process.Social affairs commissioner Vladimir Spidla added:

"The Cyprus strategy contains a strong commitment to promoting the quality and intensity of investments in human resources."

"The strategy will also boost employment and promote social inclusion," he added.Cyprus entered the EU in May 2004 and it intends to adopt the euro as its currency on January 1st 2008, depending on the success of its "particularly ambitious [but] realistic" economic targets.

The government in Cyprus claimed its economy demonstrated "remarkable results" last year.

Watch Turkey from a distance – nothing else

THE CONFLICT between Turkish Prime Minister Recep Tayyip Erdogan and the Turkish Army is now an undisputed fact. The crisis, however, has its roots in the past and dates back to the day when Erdogan changed his policy on the Cyprus issue immediately after his AKP party gained power.

The difference was that in Cyprus the prevailing view at the time was that this change was nothing more than a communications ploy, staged with the army’s agreement.Once the AKP won the elections, Erdogan announced his commitment to the modernisation of the country with the ultimate objective of joining the European Union. Moreover, he adopted an unprecedented moderate approach on Greek-Turkish affairs and Cyprus.

He announced a new dogma of Turkish foreign policy, which held that “a non solution is not a solution,” only to receive in return the derogatory comments of outgoing foreign minister Sukru Sina Gurel who said that he had no idea of what he was talking about.

Erdogan, after vacillating for a time, adjusted to the spirit of the 1999 Helsinki Accord, which visualised: a solution of the Cyprus problem, accession of the whole of Cyprus to the EU and start of accession negotiations with Turkey.The current crisis surrounding the election of a new President in Turkey is one that has been postponed for a long time.

A clash between Erdogan and the army should have erupted in 2004, when Turkey faced a choice between either resolving the Cyprus issue or forgetting its EU aspirations. In a speech to the War Academies on March 16, 2007, General Yasar Buyukanit stated that the Turkish Army disagreed with the Annan Plan.

Moreover, the Nokta magazine recently published pages from the diary of Admiral Ozden Ornek according to which on February 5, 2004 general staff officers were discussing the staging of a coup against Erdogan because of the latter’s support for the Annan Plan.On exactly the same day that the army in Turkey was talking of a coup, President Tassos Papadopoulos in Nicosia was claiming that the Erdogan initiative to solve the Cyprus problem was merely a “move to impress”.

The Cypriot President believed what was in progress was not a serious attempt to reach a solution but merely a procedure that “could only lead to the allocation of responsibilities.” Based on this naive analysis, Papadopoulos brought about the 2004 initiative. Believing that Turkish policy on Cyprus was the exclusive prerogative of the army and Denktash, and that Erdogan’s change of stance was a “public relations trick,” – as he declared on January 28, 2004 – he tried to expose the Turkish Government by begging the UN Secretary General to call for the resumption of negotiations with the aim of having the whole of Cyprus accede to the EU on May 1, 2004.

As he anxiously wrote to Annan on December 17, 2003 “we deserve another effort” and categorically assured him that he would accept his plan.The Papadopoulos strategy to accept the plan solely as a means of allocating responsibility on Turkey collapsed in New York on February 12, 2004, when Erdogan imposed his own policy on Denktash.

The time to settle the outstanding accounts between the army and Erdogan arrived in April 2004, when Turkey faced a dilemma: either to follow the Helsinki procedure or to accept a divorce from Europe.

In the end, Turkey was spared this dilemma. It was absolved through the handling of Papadopoulos, not so much because he rejected the plan but rather because of the way he did it. In the game of political poker, the President of Cyprus lost his credibility.

The price was paid by Cyprus when, on June 6, 2004, Tassos Papadopoulos put his signature to the conclusions of the EU Council, relieving Turkey from all responsibility for the failure to find a solution.

Cyprus put on its own shoulders a considerable burden that until then was carried by Turkey. The relief felt by the Turkish Army from this change in developments was best described in the recent interview given by Rauf Denktash: “I thank Papadopoulos (. . .) he saved us.

”The events of 2004 proved to be opportune both for the army and for Erdogan. After Athens also abandoned Helsinki, the army retained its own policy on Greek-Turkish affairs and on Cyprus. Erdogan gained additional time to settle his accounts with the army and today he is fighting his battle from a more advantageous position.

As far as Nicosia is concerned, it has failed in its policy to check Turkey’s accession course because with the abandonment of Helsinki it has lost not only its credibility but also its allies.

It is now being restricted to uneasily watch developments. When asked a relevant question, the only thing that Papadopoulos could say was: “What we are interested is to see a change in Turkey’s policy as regards the issue of Cyprus. Nothing else.”

So Turkey has to change its policy, but how? The theory on which Cypriot political analysis was founded, which held that all developments inside Turkey were remotely controlled from a central panel controlled by the army, has now being refuted.

It was the Helsinki Accord that gave Cyprus a role and a say on the course that Turkey aspired to follow. This role was lost in 2004 and the combination of historical events existing at the time has gone for ever. The only thing that Cyprus can now do is to watch developments from a distance.

“Nothing else.”

Cyprus fears 'army' victory in Turkey

If Turkey's army grabs power from the government in a standoff over the country's secular nature it will reduce Turkish chances of joining the EU and of solving the Cyprus issue, the Cypriot foreign minister was quoted as saying by a Greek paper Sunday.

"With the military in power and Turkey outside the European Union we could not hope that the conditions would be ripe for progress on the Cyprus issue," Cypriot Foreign Minister Georgios Lillikas told the Eleftheros Typos daily.

"Derailing Turkey's European train is a negative contingency for Cyprus, although it is not impossible that we will have to imagine this scenario soon," he added.

Cyprus has been divided since 1974 when Turkish troops seized and invaded its northern third in response to an Athens engineered coup to unite the island with Greece.

Greek Foreign Minister Dora Bakoyannis also reiterated to Eleftheros Typos that Athens supported "Turkey's European prospects despite the reserves expressed by some EU member countries."

"We consider that a European and democratic Turkey is in the interest of peace, development and stability in our region," she added.

The Turkish army, which has toppled four governments in as many decades, issued a bombshell statement last week accusing the government of tolerating rising Islamist activity in secular Turkey after Islamist-rooted Foreign Minister Abdullah Gul stood as the country's only presidential candidate.

Gul failed in his second bid to get elected Sunday, when a re-run ballot in parliament was cancelled for lack of a quorum.

After the abortive session, which was boycotted by the opposition, Gul said he would withdraw his candidacy, clearing the way for early general elections which have been brought forward from November to July 22.

Papadopoulos: Cyprus and Britain discussing property development

Cyprus President Tassos Papadopoulos said on Saturday that the government was discussing with Britain the issue of developing properties in the areas west of Limassol, noting that many problems were arising regarding the conditions of this exploitation.

Speaking upon his return from an official visit to Slovenia and commenting on press reports that London had sent a draft plan to Nicosia regarding the construction development of the area west of Limassol, mainly Akrotiri, excluding the British Sovereign Base Areas, Papadopoulos said this issue was being discussed with the British for some time now.

“There are many aspects. It is not just a matter of developing properties. Many other issues arise regarding the conditions of this exploitation, which regime, tax or other, it will come under, and other problems,” he pointed out, adding that it was not the right time to go into details.

Asked if London’s draft plan, which has been sent to the Ministry of Foreign Affairs, will be examined, the President said, “we have been discussing this issue with the British in bilateral talks for some time now.”

Asked why Akrotiri was chosen and not Dhekelia, Papadopoulos said, “it is not us speaking about the Akrotiri area” and that “this is how the issue is being presented.”

Cyprus interested in change of Turkish policy

President Tassos Papadopoulos said on Saturday that the Republic of Cyprus was interested in a change of policy on behalf of Turkey on the Cyprus problem, noting that one should first await the results of the elections for a new Turkish President before reaching conclusions.

Asked if there were any prospects for such a shift in Ankara’s stance, he said, “We still do not know who is elected to be able to draw conclusions.”

Replying to questions, Papadopoulos said various countries interested in a Cyprus settlement were calling on the Turkish side and especially Turkish Cypriot leader Mehmet Ali Talat to proceed to talks for the implementation of the July 8 agreement, without preconditions.

Commenting on the selling of Greek Cypriot properties in the occupied areas, President Papadopoulos said “the government is doing everything possible to report the fact and to secure the interests of the owners.”

Cyprus Oil and Gas: Rewards and Risks

COMMENT: By Dr Alan Waring

In the 1990s, I advised a number of US, British and Middle Eastern companies in the energy sector on operational risks. A particular problem then was a series of major hazard disasters, both upstream in exploration and production (E&P) and downstream (Refineries and Distribution) as well as seagoing tankers. Readers may recall the names Piper Alpha, BP Grangemouth, Sea Empress, Odeco. E&P had spread from historical oil & gas regions such as Middle East and Gulf of Mexico to the North Sea, Indian Ocean, Africa and many other places. With a looming global energy deficit, the search for and exploitation of new fields has continued e.g. Central Asia, Vietnam and has now reached the shores of Cyprus.

We should rejoice at the potential opportunities and benefits for Cyprus. Primarily, these will be potentially to reduce the reliance on imported gas, especially for power stations, and to bring in tax and other revenues. As an oil and gas producing country, Cyprus will also no longer be so reliant on tourism. However, an influx of international oil industry companies, personnel, expertise and expectations will also bring new challenges to Cyprus.

Inevitable and Imminent?

It would be easy to fall into the trap of assuming that an oil and gas bonanza for Cyprus is both inevitable and imminent. Not so. We are just at the early stages of Exploration and it has yet to be proven that commercially exploitable sub-sea deposits exist. As some commentators have wisely pointed out, it will take several years for licensees to find out.

However, let’s assume that commercially exploitable finds are made. Actual ‘best bet’ drilling sites for production wells will then need to be identified. Yet more time. Then production installations will have to be set up. For each installation, this could well involve a full Projects Phase requiring design, on-shore fabrication, off-shore construction, hook-up and commissioning, not to mention a ‘Safety & Environment Safety Case’ requiring regulatory approval. Add another 2-3 years before actual Production could start.

During all this pre-production stage, a legion of risk exposures will exist for the various parties involved – political, major hazards and regional conflicts are just some of the headline risks. Many risks will also carry forward throughout the productive lifetime of the fields, typically 20-30 years.

The ‘What Comes After?’ Issue

Let’s further assume that production does start. In addition to all the strategic and operational risks, Cyprus itself will also be faced with economic and social risks. Economic risks? Surely that’s the whole point of exploitation, isn’t it? Oil and gas will reduce Cyprus’s economic risks by introducing a strategic revenue stream and all its spin-offs.

Well, yes, but this is limited to a, say, 25 year primary window. As with so many of Cyprus’s struggles with a changing world, few people bother to ask the obvious question ‘What comes after?’ The property boom, asset sales, tourism, you name it – there is a lack of strategic thinking and planning for ‘what comes after’.

If oil and gas production is viable, Cyprus will enjoy a primary revenue window of 20-30 years (or 50% of notional lifetime). The UK is now beyond the 50% lifetime mark with its offshore oil and gas. Many Middle Eastern countries that previously were third-world societies and economies continue to enjoy their respective oil and gas bonanzas.

However, most are struggling to address adequately ‘what comes after?’ for when their fields peter out. Those that fail to plan for an ‘economy without oil’ can expect a bleak future with massive social unrest, political upheaval and possible collapse. Some will be in danger of reverting to a third-world existence. Existing tensions within the Middle East associated with oil and gas wealth, such as the haves-and-have-nots, power abuses, Western control, corruption and human rights abuses, are already fertile ground for global terrorists such as Al Ghaeda.

Populations used to easy oil wealth but with little or no other alternative industrial base to fall back on will be especially vulnerable. Saudi Arabia, for example, is only belatedly trying to tackle its future without oil. Some have barely started. If anyone doubts the seriousness of the problem, they need only read Stephen Leeb’s book* on the global energy crisis which exists already.

Societal and Social Risks

Then there are societal and social risks. Offshore oil and gas will change fundamentally the character of Cyprus. Ports will need to service the installations. A myriad of essential support companies will cluster around the ports – pipeline suppliers, welders and fabricators, divers, drillers, seismic specialists, helicopter companies etc etc.

Offshore crews from all over the world will be patronising the bars and restaurants. Ugly MODUs (Mobile Offshore Drilling Units) and other floating units will be laying up for maintenance and repairs, in the ports and/or within sight of the beach. All great for the local economy in one way - but damaging to the tourist economy in another. I have seen it all before from Aberdeen to Eindhoven, from Great Yarmouth to Ijmuiden, from Stavanger to Camranh Bay.

Cypriots will have to get used to a new lifestyle and environment largely imposed from outside.

We all saw how close Cyprus came to environmental disaster with the oil contamination of coastal waters in Lebanon during the Israeli attacks in 2006.

An offshore oil and gas industry brings the potential for environmental accidents that much closer to Cyprus. Tourist beaches are in the front line.

Regional Tensions

Turkey has already made plain its outright opposition to the Republic going ahead unilaterally with an E&P programme. Turkish sabre-rattling and hints of potential attacks against offshore installations do not help.

Of course, the oil and gas dispute is not a one-off problem but part of the much bigger ‘Cyprus Problem’ which remains complex and, so far, intractable. The Republic has every right to proceed with an E&P programme. However, if Northern Cyprus is ever to be enticed back into the legitimate fold, we do need not oil and gas to be added to the long list of ‘levers’ or ‘weapons’ (negative motivators) in the overall dispute. Cyprus’s oil and gas should be a conflict-neutral inducement (positive motivator).

Statesmanship is needed both to ensure that the Republic’s legitimate E&P programme proceeds and to allay the understandable fears of Turkish Cypriots that they will receive no benefits. Mutually Assured Paranoia must be dispelled.

Former Minister Nicos Rolandis has suggested an in-trust escrow fund specifically to protect Turkish Cypriot rights to oil & gas revenues.

I do not know if this specific suggestion is viable but it exemplifies the creative, positive thinking required to build mutual trust and confidence. We need to see a lot more.

The Future is Now

The offshore oil and gas experience of Cyprus is just beginning. It is probably a far bigger proposition than many in Cyprus imagine. The rewards can be immense but so too can be the risks – for the government, industry, the economy, society, the region. The production and revenue half-life may be as short as 20 years. Not only do more immediate strategic and operational risks need to be addressed but so too does the ‘what comes after?’ question for when Cyprus’s offshore fields run dry.

*The Coming Economic Collapse – How You Can Thrive When Oil Costs $200 a Barrel, Stephen Leeb, ISBN 0446 57978-5, Warner Business Books, 2006.

Dr Alan Waring is an internationally recognised risk management consultant who advises companies, organisations and government departments on a wide range of risk issues.