Kissinger talks of Cyprus in declassified docs

The Central Intelligence Agency has declassified hundreds of pages of internal reports, dubbed “the family jewels,” which detail various “embarrassments” in the organization's history such as plotting assassinations against foreign leaders or illegal wiretapping.

The 703-page of “family jewels” were declassified on Tuesday, in line with the Freedom of Information Act.

According to the National Security Archive Web site, which has put pressure on the U.S. administration to declassify secret documents in the past, the latest documents include more than that. One document, among three others made public by the Web site on Friday, includes a statement by the then Secretary of State Henry Kissinger on the “unspilling of secret service activities,” which also involve Turkey.

The document, dated Feb. 20, 1975, is a memorandum of a conversation between Kissinger, Secretary of Defense James R. Schlesinger and CIA Director William Colby, among other officials.

The ‘Turkey aid':

Kissinger, complaining about “professional leakers” in the agency and also investigative reporter Seymour Hersh, says at one point: “In all the world, the things which hurt us the most are the CIA business and Turkey aid. The British can't understand us. Callaghan says insiders there are routinely tapped. Our statements ought to indicate the gravity with which we view the situation.”

According to the “rawstory.com” Web site, what Kissinger refers to by ‘Turkey aid' is “illegal financial aid and arms support to Turkey” for the July 1974 Cyprus military intervention.

“Most historians consider that Kissinger … not only knew about the planned attack on Cyprus, but encouraged it,” claimed the Web site, in an article published Tuesday.

“Some Greek Cypriots … still believe that the invasion was a deliberate plot on the part of Britain and the U.S. to maintain their influence on the island.”

Author Christopher Hitchens, specifically in his book “The Trial of Henry Kissinger”, voiced similar allegations against Kissinger.

Plotting against Castro:

According to the main bulk of declassified documents, the CIA recruited a former FBI agent to approach two of the U.S.'s most-wanted mobsters and gave them poison pills meant for Fidel Castro during his first year in power, The Associated Press reported.

The documents show that in August 1960, the CIA recruited ex-FBI agent Robert Maheu, then a top aide to Howard Hughes in Las Vegas, to approach mobster Johnny Roselli and pass himself off as the representative of international corporations that wanted Castro killed because of their lost gambling operations.

At the time, the bearded rebels had just outlawed gambling and destroyed the world-famous casinos operated by American mobsters in Havana.

Collaborating with mobsters:

Roselli introduced Maheu to "Sam Gold" and "Joe." Both were mobsters on the U.S. government's 10-most wanted list: Momo Giancana, Al Capone's successor in Chicago; and Santos Trafficante, one of the most powerful mobsters in Batista's Cuba.

The agency gave the reputed mobsters six poison pills, and they tried unsuccessfully for several months to have several people put them in Castro's food.

This particular assassination attempt was dropped after the failed CIA-sponsored Bay of Pigs invasion of Cuba in April 1961.

Other documents detail the testing of mind and behavior-altering drugs like LSD on unwitting citizens, wiretapping of U.S. journalists, spying on civil rights and anti-Vietnam war protesters, opening mail between the United States and the Soviet Union and China, break-ins at the homes of ex-CIA employees and others.

Another set of documents, also newly declassified, is known as the CAESAR-POLO-ESAU papers. This is an 11,000-page analysis, done between 1953 and 1973, on Soviet and Chinese internal politics and Sino-Soviet relations.

Expert notes rise in interest in Cyprus property investment

Interest in property investments in Cyprus has increased significantly in recent times, according to an expert from the Property Secrets group.Simon Tweddle, head of research at the independent analysts and commentators, has noted how property purchases among external investors has been particularly strong over the last year.

Properties have increased in value in Cyprus by between 20 and 25 per cent, with the country perceived as desirable due to its cheap air access, predominantly English speaking population and low taxes.

Asked whether a property boom were likely to occur in Cyprus in the near future, ahead of a 15 per cent VAT being placed upon land in the country sold after January 2008, Mr Tweddle said "that kind of boom has already taken place".

Mr Tweddle also noted how: "Quite a few UK [property] companies are starting to get a bigger interest in Cyprus – they're marketing Cyprus as an investment destination.

"With Cyprus set to join the Euro following EU approval later this week, he also speculated that such a situation would offer more "security" to the property market and "probably increase the short-term prices rises".

On a quest for roots in divided Cyprus

By Dina Kyriakidou

KYTHREA, Cyprus (Reuters) - Armed with vague childhood memories, printouts of Google Earth maps and hand drawings of streets that might no longer exist, I crossed into north Cyprus in search of my grandmother's home town.

It was a journey to the birthplace of a larger-than-life woman whose memory I cherish, to the house my besotted grandfather built for his 17-year-old bride in 1928.

"When you marry, find someone handsome because you'll have to look at him for the rest of your life," my barely literate but very practical grandmother advised me when I was 10.

She died aged 90. That was before 2003, when the crossing points on the U.N.-patrolled green line that splits the Mediterranean island opened, allowing Greek and Turkish Cypriots the first glimpse of each other in nearly 30 years.

The Nicosia checkpoint was not the busy spot I remembered from previous trips. Lethargic officials now sat in white booths, waiting for the occasional car to pass.

"The honeymoon is over," said Mete Hatay, a Turkish Cypriot researcher for the Oslo-based International Peace Research Institute, my companion on this trip. "Fewer and fewer people cross over every day. Reality has overtaken curiosity."

I've lived my adult life away from this island and this journey is not hard for me. But I know that people on both sides of this divide, which has defied decades of international peace efforts, still nurse open wounds.

For many of the 160,000 Greek Cypriots who fled in 1974 when Turkey invaded the island after a Greek Cypriot coup, it is a heart-breaking experience, especially when they find their ancestral homes occupied by Turks.

"For the Turkish Cypriots, moving to the north was more like migrating to freedom, not the tragedy it was for the Greek Cypriots," said Mete, whose grandmother comes from the south.

About 40,000 Turkish Cypriots were also displaced after inter-communal fighting in the 1960s, shortly after Cyprus declared its independence from the British.

WORLDS APART

As we drove through the divided capital, it became clear the breakaway north -- recognised only by Turkey -- had seen few benefits from Cyprus's accession to the European Union in 2004.

In the south, luxury showrooms, hotels and restaurants abound in a tourism-driven economy. In the north, shops sell fashions of past decades and provincial casinos are the main attraction for the few foreigners who venture here.

Star-and-crescent flags are everywhere. One is painted on the mountain, its huge form outlined with flashing lights.

We reached the town of Kythrea, 15 km northeast of Nicosia. It's known in Turkish as Degirmenlik -- water mills.

The bleak, crumbling town was foreign to me. Gone were the animals grazing in green fields and farmers picking oranges and olives that impressed me as a suburban child visiting relatives.
Most houses appeared deserted and the land abandoned.

The large Church of Holy Mary Chardiakiotissa was built with the island's trademark yellow sandstone in a gothic-orthodox style mix. The bell tower is now adorned with speakers for the muezzin's call to prayer.

Nearby stands the simple, white, two-storey house where my grandmother arrived as a bride, where my mother and her siblings were born.

I knocked on the door but there was no answer.

"The people who live there are Turks from the Aegean coast," said a friendly neighbour, Ramazan Kaldirim, 23, whose family came here from a village near the Black Sea in 1976.

I told him I have no claim on this house, sold after my grandfather died in the 1950s. I am connected to it only through stories of happy matchmakings and tragic deaths, of children's mischief and friends' kindness during hard times.

We also stopped at my uncle's 19th century house to admire its carved stone entrance, now padlocked. He lived here until 1974 and he drew for me the maps of my mission.

Back in Nicosia, he asked me if his house was still standing but barely looked at the snapshots I show him.

"I know what my house looks like," he told me.

Cyprus approved for Eurozone entry

Cypriot President Tassos Papadopoulos announced on Thursday that the European Council had approved the proposals of the European Commission and the European Central Bank for the accession of Cyprus and Malta to the Eurozone on 1 January 2008.

He added that the Council would instruct ECOFIN to set a date for the parity of the Cyprus pound to the Euro next month.

Regarding Turkey's EU accession course, he said Cyprus was determining its position chapter by chapter, adding that discussions were ongoing regarding the chapters the German presidency wishes to open and ''we don't want to be unduly negative.''

Referring to the areas of Cyprus under Turkish occupation, President Papadopoulos expressed regret that the political conditions did not allow for the introduction of the Euro, so that the Turkish Cypriots could enjoy its advantages, but pointed out that it was impossible to introduce the Euro in the occupied areas for many reasons.

Speaking at a press conference in Brussels, President Papadopoulos said ''this is a very historical day for Cyprus.''

''It has become possible, through the hard work of the government officials, the experts who advise us, the understanding of the European Central Bank and the Commission, and it is proof that the economic policy we have followed in Cyprus has been rewarded by making it possible for us to accomplish the indicators which are very strict and which are demanded by the European Central Bank and the Commission,'' he said.

He added that ''we managed to reduce our deficit from 6.3% when this government took over to 1.4% this year, with very good prospects'' and noted that ''it will go further down.''

''The public debt, which was 72% against the GDP is now 64% with falling inclination and the inflation has been kept within the boundaries of the three best performing members of the EU, and unemployment is very little. All this we have achieved with the help and sacrifices of our people,'' the President said.

President Papadopoulos noted that Thursday's decision is ''interpreted as being a confirmation of the sound policies which the government has followed.''

''In the case of Cyprus, we are expecting that the rounding up of prices will be downwards, not upwards, because right now our currency is stronger than the euro and a great number of businesses have already declared their policy and are bound to reduce their prices by 1%,'' he pointed out.

Referring to the Turkish occupied areas, he said ''it is sad that the political conditions do not allow for the introduction of the Euro, so that our Turkish Cypriots compatriots can enjoy its advantages,'' but pointed out that it was impossible to introduce the Euro in the occupied areas for many reasons.

President Papadopoulos pointed out that ''it is not possible'' to introduce the euro in the Turkish occupied areas of Cyprus ''unless the area is under the control of the Central European Bank and the Commission, which it is not, and if they manage to comply with the requirements, which are very strict, as to the economic indicators.''

''That cannot be achieved now when the economy of the occupied areas is completely controlled by Turkey in Turkish lira, not in euros,'' he said.

Asked if Cyprus would veto the opening of negotiating chapters for Turkey, President Papadopoulos said ''we have stated our position in the working groups.''

''There is a further meeting going on. Negotiations are going on. Our position is very clear. We say we raise our objections. There are matters relating to policy, in addition to technical conditions, and also bearing in mind the attitude of Turkey towards Cyprus. It seems really unbelievable that Turkey will in one day exercise its veto in a number of international organisations which we try to join, for example the European Meteorological Agency. Cyprus is vetoed. Now what political impact that would have getting the weather forecast, which we get anyway, published. I don't understand. Do they expect us the following day to vote for them to open chapters, especially those where there are technical objections, not only from us, from other countries as well,'' he said.

President Papadopoulos pointed out that ''Cyprus is determining its position chapter by chapter,'' adding that discussions are continuing on the chapters the German presidency of the EU wishes to open and ''we don't want to be unduly negative.''

Athens defies MGK warning on Greek Cyprus

The response to a statement by Turkey's National Security Council (MGK) describing the Greek Cypriot government as an "element of instability" came on Thursday, not from the southern part of the divided island but from the Greek capital via a statement by the Foreign Ministry spokesperson.

A statement was released by the MGK following a meeting on Wednesday that also served as a warning for the Greek Cypriot administration, which launched an international licensing round for offshore exploration of oil and gas in February in spite of opposition from Turkey.

The MGK statement warned the move could stoke tensions in the region, chiding the Greek Cypriot administration for acting as an "element of instability" while also noting that its attempts to take steps on behalf of the entire island were "invalid."


Greek Foreign Ministry spokesperson George Koumoutsakos' response to the statement came in the form of an answer to a journalist's question regarding the statement which was aired on the ministry's Web page on Thursday.

"The fundamental factor for stability in our wider region is the European Union, of which the Republic of Cyprus is a member state, exercising its sovereignty and sovereign rights with full respect for international law," Koumoutsakos said.

Ankara opposes agreements that the Greek Cypriot administration has signed with Lebanon and Egypt over maritime borders to facilitate oil and gas exploration. Some estimates suggest that the seas around Cyprus could contain unproven reserves of between 6 and 8 billion barrels of oil with an estimated value of $385 billion.

Ancient hatreds divide tragic Cyprus

By David C. Henley

NICOSIA, Cyprus - It was 49 years ago when I first set foot on this island in the Eastern Mediterranean. Nearly 2,000 years before my arrival, Paul came to Cyprus and converted to Christianity in the presence of Apostles St. Mark and Barnabas.

The island, once part of the Roman, Byzantine and Ottoman empires, also figures prominently in Greek mythology as it is the birthplace of Aphrodite, the goddess of love and beauty, and her lover, Adonis.Paul, Mark, Barnabas, Aphrodite and Adonis, alas, would have found few expressions of love and humanity during both my visit here in 1958 and my most recent, in late May of this year.

In 1958, while spending two weeks in Nicosia, the capital of Cyprus, I was writing articles about the ongoing conflict between the British government, which had ruled the island since 1878, the land's Greek Cypriot majority, which was demanding "enosis" or union with Greece, and the Turkish minority that historically has been at odds with the Greek population's cultural, religious and linguistic ties to Greece.

Covering the troubles for several California daily newspapers at the time, I wrote in one of my dispatches from Nicosia, "Five people were killed recently in the hotel where I am staying by EOKA, the Greek Cypriot organization spearheading the drive for union with Greece.

"The correspondent of a London newspaper showed me the bullet hole in his car's front window that was fired at him as he drove his wife and daughter through the streets of Nicosia. So many have been killed on narrow Ledra Street in this city that the road has been named 'Murder Mile.'"

Since my visit here in the late 1950s, the difficulties have continued unabated. Instead of union with Greece, Cyprus attained independence from Britain in 1960, but the dispute between the Greek majority and Turkish minority heightened.

In 1974, the ruling military government of Greece and the Greek Cypriots once again attempted to unite Cyprus with Greece. That resulted in Turkey invading the island with massive land and air forces.

Many were killed in battles between the Greeks and Turks, and hundreds of buildings were damaged or destroyed during the fighting. The Turks occupied the northern third of the island and they remain today, administering the rump "Turkish Republic of Northern Cyprus" (TRNC) composed primarily of ethnic Turks and Turks sent here from the nation of Turkey.

Only the presence of a 1,000-man United Nations force of soldiers and police officers keeps the peace today.

Currently headed by an Argentine general who took over from an Uruguayan general five months ago, the blue-helmeted UN troops, operating under a command called the U.N. Peacekeeping Force in Cyprus (UNFICYP), are composed of units from Argentina, Austria, Canada, Croatia, Hungary, Slovakia, Britain, Brazil, Chile, Paraguay, India, Ireland, Italy, the Netherlands and Bosnia.

Operating out of the art deco Ledra Palace Hotel, where I stayed in 1959, the U.N. forces patrol a buffer zone in white trucks, vans, armored cars and helicopters.Supplemented by Cypriot and Turkish troops on their respective sides of the border, the buffer zone is a no-man's land blocked off with barbed wire, concrete bunkers, watchtowers and 20-foot high mounds of empty oil drums.

This 187-mile buffer zone runs throughout the entire island as well as the capital, Nicosia, making it the last divided city in the world.Both the Greeks and Turks maintain governmental headquarters in their sectors of Nicosia, and passports and visas are required of visitors passing through heavily-fortified checkpoints.

A comparison with East and West Berlin before Berlin's unification in 1989 can easily be made. Concrete, blocks and bricked-up buildings separating commercial and residential neighborhoods from Greek and Turkish sectors are appalling.

The so-called "Green Line" that divides Nicosia and the island (it was given this name because a British general who drew the boundaries on a map used a green pencil) goes through the nation's popular swimming beaches, resorts, farms, villages and mountains, zig-zagging throughout the island for no apparent reason.

The two halves of Cyprus barely communicate with one another, and the proliferation of bombed-out buildings on every block adjacent to the Green Line, together with empty streets and the armed troops manning watchtowers and sentry booths, are intimidating to all who venture here.Turkish and Greek Nicosia are two different worlds. The Greek sector is full of life, fine restaurants and shops, and well-kept streets.

The Turkish areas are drab, dirty and unkempt. Turkish and Greek Cypriot flags fly over the two entities, and each nation maintains its own currency and postage stamps. Mosques and minarets are found all over the Turkish area, giving the nation a Middle Eastern feel. In the Greek sectors, Cypriot Orthodox churches proliferate.

The Turks appear surly and withdrawn. The Greeks are decidedly more outgoing, friendly, animated, better-clothed and receptive to foreigners.Despite the rundown condition of the Turkish side, I enjoyed wandering its crooked streets and examining its Arabic architecture. There was also a sense of adventure walking about Turkish Nicosia, the capital of a pariah nation diplomatically recognized by no nation other than Turkey.

On the last day of my four-day visit here, I attempted to enter the Ledra Palace Hotel astride the U.N. Buffer Zone, the beautiful 1920-era hotel I stayed at on my first trip here in 1958.I was denied entry by the U.N. troops billeted there. But they let me walk around its gardens, now full of weeds and debris and walled-off by concertina wire.

Bullet holes pockmarked its walls and military uniforms of the U.N. forces living there hung from some of the windows of the upper floors.

Cyprus may still be a beautiful land to come to, but for now, its tragic past and present give little hope for a better future.

Kasoulides lays into ‘defeatist’ policy on Cyprus problem

THE administration was yesterday caught in the middle of crossfire, on the one hand fending off salvos from presidential hopeful Ioannis Kasoulides while on the other answering jibes from their main coalition partners AKEL.

Kasoulides, an MEP and former Foreign Minister, turned up the heat after announcing last week he would be standing for the top job.Yesterday he took on the administration head-on, accusing it of a “defeatist” policy on Cyprus and of a lack of initiative.

“To say that Turkey holds the key [to Cyprus] is merely an excuse for inaction and inertia,” said the MEP.“We must bring the key back to Nicosia. Turkish intransigence is not without its weak points. I aim to adopt an aggressive diplomacy, take the initiative and back Turkey into a corner.”

And the government’s “tough guy” attitude abroad had isolated Cyprus, he added.“Look at [our] treatment of [former British Foreign Secretary] Jack Straw. In world diplomacy, never have I seen anything like it, except maybe with Iran’s Ahmadinejad or Venezuela’s Chavez.

At least those two countries have oil. What do we have to behave the way we do?”Responding to Kasoulides, Government Spokesman Vassilis Palmas accused the MEP of “bulldozer tactics.”He insisted the government had a clear-cut policy on Cyprus, and challenged Kasoulides to explain his own vision.“Is he [Kasoulides] a concessionist, a hard-liner… what?” mused Palmas.

“For someone who served as Foreign Minister for years, if he still thinks that he and Mr Talat can together find a comprehensive settlement, if he does not realise that Turkey holds the key…then I rest my case.”

But during yesterday’s press briefing, Palmas was also taken to task over a comment made by Nikos Katsourides of AKEL.In an interview with Simerini over the weekend, Katsourides said that it was not enough for the next President to belong to the “no” camp – he should also be someone who can pave the way for a solution.

The remark was understood as a response to the other coalition parties’ criticism of a possible Christofias nomination.AKEL has taken flak from ruling DIKO and socialists EDEK for considering Christofias as a rival candidate, wondering why the communists would want to go their own way if they were pleased with the Papadopoulos administration.

Weighing in, EDEK honorary chairman Vassos Lyssarides said he was confident Papadopoulos would make it to the second round and that his party would back him all the way.“For us, there are no dilemmas. It is others who will be faced with choices,” added the veteran politician, alluding to AKEL.

Neither Papadopoulos nor Christofias have officially announced their candidacies. It is said the government camp is waiting, holding out hope that AKEL will abort the Christofias nomination and renew their oath to the three-way coalition under Papadopoulos.

Meanwhile, a new poll commissioned by daily Politis found that Papadopoulos should garner 31.2 per cent of the popular vote in the first round, followed by Kasoulides at 26.2 per cent. Christofias came in third at 23.1 per cent.According to the survey, around 20 per cent of the electorate are undecided

Cypriot Orthodox archbishop suggests Cyprus as site for pope-Russian Orthodox meeting

VATICAN CITY: A Cypriot Orthodox archbishop seeking to arrange a groundbreaking meeting between Pope Benedict XVI and the Russian Orthodox patriarch said Monday that Cyprus would be an ideal location for the talks.

Archbishop Chrysostomos II of Cyprus has just completed a six-day visit to Rome for talks with Benedict and other Vatican officials and now plans to meet with Orthodox Patriarch Alexy II in Moscow on July 13.

He said the Orthodox Church is "open" to a meeting with Benedict and that while it is not clear where it would be held, "Cyprus would be a solution."

Such an encounter eluded the late John Paul II in his long papacy because of Catholic-Orthodox tensions following the demise of Soviet communism.

But Vatican officials have expressed recent optimism that the talks could be held within a year.

Chrysostomos told reporters on Saturday that the chief problem was a lack of communication between the pope and the patriarch. The archbishop contended that Benedict's background as a theologian with a good grasp of Orthodox theology would help the process of reuniting the two churches, which split nearly 1,000 years ago.

The archbishop invited Benedict to visit Cyprus.

The Russian church accuses Roman Catholics of improperly seeking converts in areas that traditionally would be Russian Orthodox. The Vatican has rejected the allegations, saying it is only ministering to Russia's tiny Catholic community of about 600,000 people in a country of 144 million.

Is economic growth sustainable in Cyprus?


In an article published in January, I asked whether the Cyprus economy was decoupling from tourism. I cited the unusual combination of falling tourism numbers but rising real GDP.

According to the full breakdown of figures published by the Statistical Service, Cystat, on Friday, the economy does seem to be decoupling from tourism. In the first quarter of 2007, gross domestic product (GDP) grew in real terms by 3.8% compared with the first quarter of 2006 on a seasonally adjusted basis. In the same period, however, tourism arrivals fell by 3.9%.

In 2002-03, when tourism arrivals fell by an average 7.5%, real GDP growth dipped to average just 1.9%, compared with 3.8% in the previous two years.

The same pattern does not appear to be repeating itself this year.

-- What is driving growth?

If economic growth is decoupling from tourism, now is the time to ask if such growth is sustainable.
Clues to this answer lie in what actually drove growth in the first quarter of 2007. Looking at GDP by sector, one sector that rose faster than average was “wholesale and retail trade; hotels and restaurants; and transport, storage and communication”, which rose by 4.1%. This is rather a large sector which was probably driven by car sales, as we shall see.

The main sector that rose faster than overall GDP in the first quarter was “financial intermediation, real estate, rental and business activities”, which rose by 6.0%.

This is also a large sector that encompasses bank lending, property sales and general businesses. For reasons explained below, the main driver of growth here was probably bank lending.

-- The car-loan economy

Looking at GDP by expenditure, it is clear that the main driver of growth was “gross capital formation”, which comprises fixed investment (normally in things like machinery) and stocks.
This category rose in real terms by a fast 14.8% year on year in the first quarter of 2007 compared with overall GDP growth of 3.8%. This, in turn, was partly driven by a very large increase in transport equipment investment, up by 28%.

Normally, and in an industry-led economy, this would be good news. It would mean that businesses are investing in new technologies. However, in Cyprus, there are two reasons to be cautious.
First, this is simply “bounce-back growth” from a low baseline in the first quarter of 2006, when investment in transport equipment fell by 6.6%.

Second, it looks like this “investment” is simply businesses taking advantage of the tax-cuts to buy new cars. In the first two months of 2007, imports of passenger motor vehicles rose by 47% (in Cyprus pounds terms) to CYP 60.4 mln from CYP 41.1 mln in the same period of 2006.

Cars bought by businesses count as investment, whereas cars bought by individuals count as consumer spending.

Cars sales by individuals are also booming (up 32% in January-April), which explains why household consumption was up 5.6% in the first quarter.

And how are these car purchases being funded? With bank loans.

Bank lending has not only been increasing, it has been increasing at a faster pace.

The Central Bank of Cyprus publishes bank lending figures only two months at a time. But by painstakingly keeping records, you can see the remarkable trend.

For a year-on-year growth rate of 6.4% in January 2006, bank lending had accelerated to growth of 19.5% by March 2007.

Foreign borrowing, mainly in euros, has risen very dramatically, by 54.1% in March 2007 and by 53.3% on average since January 2006.

-- Can it last?

This leads us to the question of whether this kind of growth rate will last. And the answer is that it may well do, but for all the wrong reasons.

As we have seen, growth in the first quarter appears to have been driven primarily by car sales, which in turn were driven by strong bank lending.

Bank lending growth will dip significantly only if bank profits suffer or if interest rates rise sharply. The first seems unlikely in the current climate, with healthy bank profits forecast for this year. The second is also unlikely to happen, though here the outlook is less certain.

Adoption of the euro in January 2008 is now a near certainty and if the European Central Bank does not raise rates again this year, the base rate in Cyprus will fall another 50 basis points (0.5%) by the end of 2007.

The Cyprus minimum bid rate on the main refinancing operations is 4.50%, while the ECB main refinancing operations minimum bid rate is 4.00%

Bank lending rates could fall even further as banks realise that customers can quickly compare the rates on car and housing loans in Cyprus with those in other eurozone states.

Even if continued growth in lending leads to a bubble in Cyprus, the European Central Bank is hardly likely to make its judgements on the basis of such a small economy.

Just as in other small eurozone states, therefore, interest rates are likely to be lower in Cyprus than they really should be and national instruments for offsetting this growth in lending will be fairly weak. Thus the credit boom will continue for longer than classical theory suggests.

This is also why the housing market in Cyprus will probably continue to be buoyant for years to come. Construction output rose by a fairly healthy 3.6% in the first quarter and according to the BuySell home Price index, the average year-on-year growth rate of house prices has been 9.3% up to May year.

The average house price in Cyprus is now CYP 97,064 (EUR 166,610).

According to dinner-table theory, this cannot last because property prices are already beyond the reach of the average consumer.

But remember that the Cyprus housing market is probably where the UK one was about 20 years ago.

And remember too, that every time house prices seem to reach a peak, something happens to keep the market going. Banks offer longer-term loans (in the UK you can now get 40-year loans; in Japan there are two-generation loans), or they allow bigger multiples of income.

Or, as is happening in Cyprus, developers build smaller properties more closely packed together.
One way or another, the market adjusts, people panic that they will never be able to get on the housing ladder, so beg and borrow to do so.

That doesn’t mean that the housing and credit-led growth we shall see will be healthy. Sooner or later Cyprus will experience a Spanish-style bust, and those who have borrowed too much will suffer.

But it could be many many years before we actually get to that stage.

Cyprus government to help football clubs out of debts

The Cyprus government has announced a three-year aid package for debt-ridden football clubs, which owed the states millions of unpaid social insurance payments for their players, local media reported on Friday.

Finance Minister Michalis Sarris said that three million Cyprus pounds (about 6.8 million U.S. dollars) would be given to the clubs in government subsidy, with another 2.5 million pounds (around 5.7 million U.S. dollars) going towards unpaid debts.

It was first disclosed in 2004 that most of Cypriot clubs owed millions in unpaid debts to the state, including social insurance payments and outstanding VAT.

UEFA, the European football's governing body, has also warned the clubs to put their books in order. UEFA once barred Olympiakos Nicosia from signing foreign players because they owed money to a former player.

According to local daily Cyprus Mail, the debts have been accumulated by bad management, as well as rotating club chairmen not planning for the long-term when they take control.

Cyprus to Shelve GM Food Separately

NICOSIA, Cyprus — Cyprus' parliament has passed legislation requiring supermarkets to put genetically modified products on separate shelves from other food.

The Green Party, which tabled the bill, said Friday that the legislation will make it easier for the public to "distinguish these products" and help them make more informed purchases.
Parliament unanimously approved the bill Thursday.

The Green party described the bill as a "historic victory" that would lead the biotech food industry to abandon the Cypriot market.

Party spokeswoman Ioanna Panayiotou said surveys have shown wide public support for the initiative _ which she said was the first of its kind in the European Union.

"It is a pioneering moment ... and we are optimistic more countries will follow," she told state radio.

UN PEACEKEEPING FORCE IN CYPRUS EXTENDED THROUGH MID-DECEMBER

The Security Council today extended the United Nations Peacekeeping Force in Cyprus through mid-December while noting the current stalemate on the issue.

In a unanimously adopted resolution, the Council also reaffirmed that the "status quo is unacceptable, that time is not on the side of a settlement, and that negotiations on a final political solution to the Cyprus problem have been at an impasse for too long.

"The resolution referred to a July 2006 Agreement "stressing that a comprehensive settlement based on a bicommunal, bizonal federation and political equality, as set out in the relevant Security Council resolutions, is both desirable and possible and should not be further delayed."

In a report released earlier this month, Secretary-General Ban Ki-moon recommended the extension of UNFICYP's mandate, and the Council today echoed his "firm belief that the responsibility of finding a solution lies first and foremost with the Cypriots themselves."

Pope and Archbishop of Cyprus, “constant comittment” to Church Unity

Receiving Chrysostomos II, Archbishop of New Justiniana and All Cyprus, Benedict XVI underscored the urgent need for Christian Churches to find a new and common language, capable of transmitting Christ’s truth. The Pope is invited to Cyprus.

Vatican City (AsiaNews) – Unity between the Churches is “a gift and the fruit of the Holy Spirit”, but at the same time “it requires constant effort, animated by willingness and an unshakable belief in the power of the Lord”. This was the main theme of Benedict XVI’s message to Chrysostomos II, Archbishop of New Justiniana and All Cyprus.

In order to proclaim the Christian faith, the Pope underlined, “we are in need of a new and common language, a spiritual language capable of faithfully transmitting Christ’s truth, thus helping us to re-build, in truth and charity, the communion between all of the members of the one body of Christ”.

This necessity, “of which we are all aware”, he added, “propels us onwards in our journey of theological dialogue between the Catholic Church and the Orthodox Church without loosing heart; it guides us to use valid and stable instruments in our search for communion, making sure that it is neither discontinuous nor occasional in the life and mission of our Churches”.

For his part, Chrysostomos II recalled the problems facing the European continent, which is affected by the lack of unity between Christians: “Europe, the cradle of civilization and the common home of the Catholic and Orthodox Churches – is disorientated and in crises, with the advent of atheism, secularization, decadence and doubts”.

As a result, modern man has “the Gospel values”, but “refuses the fundamental importance of Europe’s Christian roots; time has come for the Church and a new evangelization, it is time for the mission ad intra!” This is why the archbishop of Cyprus appealed for the unity of the Churches, without which “the many isolated efforts by the different Christian Churches and Confessions will have few positive effects, they are in short condemned to failure”.

The Archbishop of Cyprus then invited the Pope “who comes from a brother nation, traumatized by separation like our own, but then reunited, thank God”, to listen and make known the island nations’ torment, where “human rights are trampled on, monuments destroyed, and works of our spiritual heritage dismantled to become objects of international commercial trade and where the division of Europe’s last capital seems written in eternity”.

The joint declaration also spoke of the situation of "division and tension” which has separated the Cyprus for over 30 years. Moreover there was a brief mention of the situation in the Middle East, “where the war and unrest between the peoples risk spreading with disastrous consequences. We have invoked peace “from on high”. Our Churches aim to carry out the role of peace makers, to promote justice and solidarity and fraternal relations between all Christians and a loyal dialogue between the different religions present in the area”.

In conclusion, Chrysostomos II invited Benedict XVI “to visit his humble home for the first time, to be its honoured guest, and to bless it!

Cypriot army struggles with Russian weaponry

The Greek Cypriot army is having bad luck with weapons purchased from Russia.

After a fiasco with costly Russian missiles that could not be deployed, the army has been forced to ground a fleet of Russian-made helicopter gunships because no spare parts have been delivered and its pilots cannot read the Russian-language instruction manuals.

Only one of 12 MI-35 heavy gunships purchased in 2001 is still operational and that is used only "when absolutely necessary," said an official who spoke on the condition of anonymity.

The other helicopters, meant to become a powerful deterrent against the Turkish tank force in the northern part of the divided island, are waiting in the hangars of a somnolent air base near Paphos.

Turkey maintains an expeditionary force of 35,000 troops in northern Cyprus, consisting of two infantry divisions and an armored division of more than 200 tanks.

The heavy Russian helicopters pack an arsenal of anti-tank rocket launchers, 30 mm guns and mine dispensers.

Russians like to call it "the flying tank." In July, one crashed, killing its Cypriot trainee pilot and his Russian instructor. Now 10 others are effectively grounded, waiting for spare parts and English- or Greek-language manuals.

According to the Greek Cypriot daily Cyprus Mail, the paralysis of the small helicopter fleet has dispirited potential pilots, many of whom reportedly have asked for transfers to other branches of the service.

The Greek Cypriot army consists of about 10,000 permanent personnel with periodic call-ups for an additional 40,000 trained reservists. Annual maneuvers often are conducted jointly with the Greek air force.

During the 1990s, Cyprus bought a sophisticated Russian S-300 air defense system intended to keep out Turkish planes, which had roamed the skies unopposed during the 1974 invasion.

Many Greek Cypriots considered the promised 48 ground-to-air missiles a miraculous weapon.

But delivery of the system, which cost the Greek Cypriots $227 million, was postponed several times, mainly because of Turkish threats of immediate armed intervention.

In 1999, the Greek Cypriot government moved the missiles to the Greek island of Crete, where they now serve as part of the Greek air defense system. No one likes to mention the cost of the abortive purchase.

Apart from the grounded helicopter pilots, the Greek Cypriot army, known as the National Guard, is not dispirited.

It is training a 35-member unit to march in the Bastille Day parade July 14 in Paris, an invitation extended to all countries of the European Union by Nicolas Sarkozy, the new French president.

Although Cyprus harbors an unusual array of troops and weapons for an island of 3,600 square miles, it has been given a surprising rating on a British "peace index." It ranks 51st among 121 countries assessed by the Economist Intelligence Unit. The United States rated 96th, or close to the bottom.

The index is based on 24 indicators of a country's "peacefulness," such as access to small weapons, military expenditure and respect for human rights. Iraq is at the bottom of the list.

Moller briefs Security Council on Cyprus deadlock

THE U.N. Secretary-general's Special Representative in Cyprus, Michael Moller, has briefed the Security Council on the situation regarding the July 8 agreement.According to reports from New York, Moller gave his briefing in a neutral manner without apportioning blame for lack of progress to either side.

Each side blames the other for the deadlock in the UN-brokered agreement reached almost a year ago, designed to get the two sides talking again.Moller’s briefing was part of the Security Council’s discussions, which opened late on Friday, on the renewal of UNFICYP’s six-monthly mandate. A resolution is expected on Thursday.

House President Demetris Christofias said yesterday no one expected Moller to lay the blame at the feet of the Turkish Cypriot side, given that the UN would like to see the July 8 process continue.“I didn't expect that Moller would accuse the Turkish Cypriot side,” Christofias said. “Of course, one would wish things to be clearer.”

The government does not expect any surprises from the mandate renewal, but is said to be closely watching the developments, since there has been talk among Security Council members about a possible revision of UNFICYP in the event of continued lack of progress.

Another issue being closely watched is the context of any reference to the lifting of Turkish Cypriot isolation.In his report to the Security Council, UN Secretary-general Ban Ki-moon does refer to the isolation, saying the EU aid package for the Turkish Cypriot community should be considered “as a positive step towards lifting the isolation of the Turkish Cypriots, as called for by my predecessor in his report of May 28, 2004, by which I stand.”

Referring to the July 8 agreement, Ban’s report said: “Despite the commitment of the two leaders in July to ensuring that the ‘right atmosphere’ prevail for the process to be successful, including by putting an end to the so-called blame game, the two sides continued to engage in mutual recriminations throughout the reporting period.”

He also said he regretted that he couldn’t report “any meaningful improvement in the atmosphere in which Cypriots of both sides are allowed to engage in bicommunal contacts”.

He said the time had come to move from talks about procedures to substance. “It is high time that the considerable convergence of positions be translated into action,” said Ban.

“I urge both leaders to honour their written commitment and bring to an end the ongoing mutual recriminations, which only serve to undermine the process.”

Cyprus house prices up 9.1% year on year in May

Residential property prices in Cyprus continued to rise for a fifth consecutive month in May 2007, recording a monthly increase of 1.8%, according to the BuySell Home Price Index prepared by Dr. Stelios Platis and Marios Nerouppos of MFC S. Platis.

The index reached 124.58 in May, compared with 122.44 in April, marking an increase of 9.1% increase over May 2006.

The BuySell Home Price Index, which adjusts for factors such as increases in quality, is the only house price index produced for Cyprus.

According to Financial Mirror calculations, the BuySell Home Price Index has risen on average by 9.3% year on year so far this year, compared with 5.9% for the whole of 2006. House-price growth is therefore accelerating.

BuySell reported that the “Average Home Price” in Cyprus according to the BuySell index was CYP 97,064 (EUR 166,610) in May.

The BuySell Home Price Index was created and is updated monthly on behalf of BuySell Cyprus Real Estate by MFC S. Platis. The Index is announced during the second week of each month and depicts the movement of prices at which residential properties are sold in Cyprus, based on the extensive BuySell Cyprus Real Estate database.

For more information on the methodology of the Index and on Hedonic Prices, refer to: The “Asking Price and Transaction–based Indices for the Cyprus Housing Market (Rebased)” by Dr. Stelios Platis and Marios Nerouppos of MFC S. Platis. F.M.

SECRETARY-GENERAL RECOMMENDS 6-MONTH EXTENSION OF UN MISSION IN CYPRUS

Secretary-General Ban Ki-moon has recommended a six-month extension of the UN Peacekeeping Force in Cyprus (UNFICYP) while pointing out that some are questioning the value it adds in the absence of political progress."UNFICYP has played an important role in maintaining peace and security in Cyprus,"

Mr. Ban said in his latest report to the Security Council covering the past six months.At the same, time he observed that, "After 43 years of presence in Cyprus, the value added of UNFICYP, particularly in the absence of significant progress on the political process, is increasingly being questioned by various actors in the international community.

"The situation along the ceasefire lines has stayed "generally calm and stable," but he noted security concerns regarding civilians endeavouring to seek their property rights in the buffer zone, disregarding security considerations.

Mr. Ban underscored his "firm belief that the responsibility of finding a solution lies first and foremost with the Cypriots themselves," and said that "it is essential that the parties demonstrate their readiness to match words with deeds through sincere efforts to reach a comprehensive settlement."Despite the lack of any significant advancement, "the parties have taken small but incremental steps in the right direction," he observed, welcoming the sustained dialogue between representatives of the two leaders regarding bicommunal working groups and technical committees.

He voiced regret that the atmosphere in which the two parties are allowed to engage in bicommunal contacts has not improved substantially, and said he believes an active civil society could aid the political process.

Greek Cypriots concerned about developments

The overwhelming majority of Greek Cypriots believe that time is running against them as far as the Cyprus issue is concerned and are worried about the current situation and any future negative developments.

According to a survey conducted between 7 and 30 March 2007 by the consulting and research company Noverna, on behalf of the Institute for Social and Political Studies, 70% of Greek Cypriots, supporters of various political parties, believe that time which elapses without any tangible results regarding a solution is not in favor of the Greek Cypriot side but rather it works for the Turkish Cypriot side.

Only 2% believe that time works in the interest of the Greek Cypriot side. The survey was presented by Harris Papageorgiou, Executive Director of Noverna. Most Greek Cypriots, who took part in the survey, express concerns, fears and uncertainty about the current situation but also about any future negative developments for the Greek Cypriot side.

The majority stated that they are not aware of the content of talks between representatives of the leaders of the two communities, to pave the way for substantive negotiations.On future developments, only 6% feel very optimistic and 32% say they are rather optimistic, while 18% of those asked said they are very pessimistic and 39% answered “rather pessimistic”.

The majority of young Greek Cypriots expressed pessimism. “The great degree of pessimism is probably linked to the impression that we are a small country with no influence”, Papageorgiou said. The survey has shown that refugees are more optimistic than non refugees.

The ones who declared their optimism are the ones who voted against a UN-proposed solution plan (the Annan plan) which was rejected by the Greek Cypriots and approved by the Turkish Cypriots in a referendum three years ago.

According to the survey, Greek Cypriots have not linked the Annan plan to the solution model of a bizonal, bicommunal federation. They are also not aware of the actual meaning of such a model. The majority of those questioned believes that nothing has changed (48%) since 2006, 26% said things are worse and 23% said there have been positive developments. More than 50% of Greek Cypriots wish for a solution that would reunite the island and 28% would like to see a political solution that separates Greek Cypriots from Turkish Cypriots.

When asked which solution is more realistic, 35% answered the bizonal, bicommunal federation. Over 50 % believe that the most possible solution is either the continuation of the status quo or the solution of two separate states. Furthermore, the survey has shown that developments in Cyprus in the past three to four years have brought the Cyprus issue high back on the agenda.

Greek Cypriots, 68%, said that the Cyprus problem affects their lives and 82% of them are concerned about the solution of the problem. Most concerned are people over 65 in contrast to the younger generation who is less concerned about the solution.On 24 April 2004, the Greek Cypriot and the Turkish Cypriot communities were called to approve or reject in two separate referenda the UN envisaged Annan plan for a comprehensive settlement of the Cyprus problem.

The overwhelming majority of the Greek Cypriot community rejected the plan while the majority of the Turkish Cypriot community approved it. Cyprus became a full EU member state in May 2004.

Ban urges Cyprus communities to end division

New York - Warning that the international community would not accept a prolonged United Nations presence on Cyprus, UN Secretary General Ban Ki-moon said Tuesday it is time for the island's two ethnic communities to translate procedures into action and end the division.

Ban said in a report to the UN Security Council that it should renew for another six months the mandate of the peacekeeping force that has been on Cyprus for the past 43 years and its continued presence should not be taken for granted.

The island is divided between Turkish Cypriots in the north and Greek Cypriots in the south. A so-called green line runs through the capital Nicosia, marking a ceasefire line monitored by a UN force of about 900 military and police personnel.

Ban said the UN presence on Cyprus continues to be important in the absence of a comprehensive settlement.

'The time has come, however, to move from talks about procedure to substance,' Ban said, adding that talks in the past 16 months on settling issues from sovereignty to property should now be implemented.

'It is high time that the considerable convergence of positions be translated into action,' he said. 'In this regard, and in order to build trust between the sides, I urge both leaders to honour their written commitment and bring to an end the on-going mutual recrimination, which only serve to undermine the process.'

He said the political process can move forward in a flourishing society like that of Cyprus.

But in the last two years, gates have opened on the green line to allow tens of thousands to cross into the other side for visits. The political process has stalled since 2004 when a UN referendum for reunifying the two sides under a federal government was rejected by the Greek Cypriots and accepted by Turkish Cypriots.

The Greek Cypriot community, with a much larger population, joined the European Union in 2005, while the northern part's political future is in limbo.

Ban said the responsibility to find a solution to the ethnic division is with the Cypriots, while the UN would support the political process and facilitate reconciliation.

'It is essential that the parties demonstrate their readiness to match words with deeds, through sincere efforts to reach a comprehensive settlement,' he said.

Several issues needed to be taken care of in the meantime, including mine removal. Ban urged the Turkish Cypriots to re-engage with the UN peacekeepers to complete the mine clearing work in the buffer zone.

The search for missing persons has maintained a momentum and advanced in resolving one of the most painful aspects of the Cyprus problem, Ban said.

Marcos Bagdatis Baghdatis advances in Roland Garros

Cypriot tennis player Marcos Baghdatis, 19th in world Men Tennis rankings, has gone through to the fourth round of the Roland Garros, beating Czech Republic's Jan Hajek.

Baghdatis, who made it to the Australian Open final and the semi-final of Wimbledon, won two sets with 6-2.

The match lasted for 58 minutes.Jan Hajek, who ranks 100 in the Men’s tennis classification, withdrew after the second set, since he wasn’t feeling well because of a previous injury.

Below is great story of a Greek-Cypriot immigrant family that succeeded in New Zealand...

Hard work tops off pita business




From a minor disaster, a new business can grow. JOHN McCRONE finds what happened next after the toppings were one day left off the lahmajoun. Business is about people. The outside world simply sees a building, a product, a logo. All the public knows is that money goes in and stuff comes out.

But inside every business there is a rich tale of joys, fears and frustrations. A soap opera if only you could peek behind the walls. Take the Lahmajou Company, a pita bread bakery which has sprung up alongside a central Christchurch flyover during the past year.

Painted bright Mediterranean white and fronted by two-storey Doric columns, the architecture has certainly excited a bit of comment. But you would be pushed to credit the story this "typical" small business has to tell.

On a sunny Friday morning, the dignitaries have turned out in force to snip the ribbon on a new pita chip packaging machine, among them small-business minister Lianne Dalziel, the top nob from a supermarket chain, and local poet and broadcaster Gary McCormick.

Hoisting his glass of bubbly, McCormick describes how his friend Giannis Michaelides arrived in Christchurch in 1966 as a 19-year-old fleeing the troubles of Greek Cyprus.

He had nothing but two shirts and a spare pair of underpants in his case _ or was it two pants and one shirt?

Later we walk up marble stairs to Michaelides' office. The foyer is decorated with a mural of a Greek hillside village. All the touches of home.

At 60, Michaelides agrees he has it made. And his is a story about the immigrant, family, hard work, everything you might expect. But also about ingenuity, scaling, productivity, and even that good old mainstay of business, a good dash of luck.

Michaelides trained as a print typesetter and book-binder. Arriving in Christchurch he hooked up with his uncles in the fishing industry, first running fish and chip shops and restaurants, then later helping them with the business that became United Fisheries.

In 1991, with his wife, Despo, Michaelides opened up his own small business _ a baker's shop. His thinking was that no matter how hard times get, people always have to eat. So stick to something to do with food.

He specialised in lahmajoun, a small Middle Eastern pizza. It was a struggle. Of course, everyone loved cheerful Michaelides with his broken English and tasty lahmajoun. But where was the business going to go?

Lahmajoun have to be eaten fresh. Flattening out dough and making toppings is a labour-intensive chore. The business had no scale.

However, Michaelides was never going to get rich. And with three growing sons, he wanted something more.

"You could make a good living, but that's all you could make out of it," he says.

Then one day Michaelides had one of those business accidents. A tray of lahmajoun went into the oven without toppings. An oven breakdown had caused a bit of confusion.

Out came a tray of pita breads. Of course, the dough mix was the same. Michaelides realised that all along he had the recipe for something more mass market.

Quickly he was into the pita bread industry. There are at least 16 manufacturers in New Zealand, most of them big bakeries doing flat breads as a sideline. But Michaelides was going for authenticity and quality.

Giannis brand pita bread did so well that within 18 months he had to change premises three times. The growth was good news but also dangerous.

His pita bread was still hand-baked. Someone had to mix the dough, bang it out flat, load the ovens. To cope with the demand he had to keep taking on more staff.

Pretty soon he was up to 30. There was never enough room even as he moved bakeries, and always a lot of spoilage. It was all quite inefficient really.

Like many small Kiwi firms, Michaelides was discovering that recruiting more people to increase production was not really paying off.

The crunch came one Monday morning at his second factory when – as often happened – the oven broke down.

"From 9 o'clock to 12 o'clock, we were fixing it. Everybody else was sitting around, making nothing. Then we finished fixing and now everyone says they want to go off to lunch," says an exasperated Michaelides.

At that point he decided that if he was to keep growing the company, he would have to automate. Getting finance is part of every small business drama.

When Michaelides wanted to make his first move out of his lahmajoun bakery, his original bank would not even extend his overdraft by $10,000. So he called in the branch manager and business manager of another bank, the BNZ, for a coffee and luckily got a different response.

Michaelides told them he really needed $200,000 and he could offer no security on the loan. "I didn't know them before. But I said what you see is what you get. And one thing I can say is I would have to be dead to let you down. That is all the guarantee I can give."

He left them sitting with their cup of coffee as he unloaded a batch of pitas. When he returned, they simply told him he had a deal. And they have continued to back him ever since.

But Michaelides admits that when he went for a third factory, with industrial dough mixers, he nearly overdid it.

"At one stage I thought I might go bust. I over-spent. I went to Europe and bought machinery that cost me half a million. But I thought I couldn't buy one thing and then later another thing. I just had to go for it and buy it all at once. I took a chance."

Like many small businesses, Lahmajou was by that time a proper family firm, with the sons growing up and becoming involved, helping out at the shop or delivering pita bread after school.
But Michaelides was luckier than most.

Andreas, his oldest, had qualified as an electrical engineer, while Kyriakos was studying commerce, and his youngest, Stelios, was becoming an accountant. Michaelides says he could not have planned it better _ a trio of talents exactly right to take the business on to the next generation.

At this point in the story, yet another proud small business characteristic comes to the fore _ the No. 8 fencing wire mentality.

Michaelides might be Greek Cypriot, but he and his son Andreas turn out to have this quality in spades. With welding torch and angle grinder, they set about creating their own automated production line.

They did have to buy mixing machines and a few other big ticket items. But the conveyor belts, the ovens, and much else they designed and built from scratch. It was all coming together. Yet now their third premises was out of space. So a year ago they had their fourth factory, by the flyover, purpose built for them.

Now they had the room and the systems to be the biggest pita bread producer in the country. And automation meant that instead of a 100 or more staff, the whole place can be run by a dozen people. But Michaelides and Andreas were already wondering what next?

Pita bread can be wrapped and even frozen. It has no fancy toppings to complicate production and the business will quite naturally scale to cover a whole country.

However what they wanted was a business that could scale to take on the world. And so they invented pita chips.

Back when there was a lot of wastage in the bakery from over-cooked or wrongly mixed batches, the results were bagged up and sold as dry crackers.

But why not make crunchy mini-pitas as a healthy snack option?

Andreas, the engineering son, could now really come into his own. The new product depended on entirely new machinery.

Andreas runs a hand over a few rough welds and apologises that a few of the metal covers over the oven look rather askew. He was in at the weekend giving things another bash about.
They have spent a bit to get this factory, but also saved a fortune. Andreas even designed the smart red and white foil packaging for their Giannis pita bread chips.

"Why would we hire someone when we can do it ourselves?" he says with some bemusement.
Lahmajou is poised to go global. Well, fingers crossed, the chips will be a hit in New Zealand supermarkets. Then they can have a crack at Asia and the US.

Anyway, you can see why Dalziel and others have flown down to cut the ribbon on their new pita chip production line.

Dalziel says the story of Lahmajou encapsulates so many of the issues that face all small businesses. The country urgently needs to automate to boost its productivity levels. We need to innovate and find products that can scale.

Then there is the growing problem of business succession. Dalziel says with the retirement of the baby boom generation, it is scary to think how many small businesses lack the right people to take them on to the next generation.

Dalziel says Lahmajou even says a lot about the role of serendipity in business. Things always happen in life. But it takes a clever business owner to spot the opportunities that fate is casting his or her way.

Above all, Dalziel says, it is just refreshing to see that business is still all about people.

Worried? We should be

IF THE strength of Cyprus’ diplomatic response to the German Bundestag resolution urging an end to the isolation of the north is a sign that the government is worried, we can seek some scraps of comfort, because it should be. Yes, of course, the resolution is not binding on the German government. Yet our leaders would be na?ve to dismiss it as a parliamentary whim.

As if to underline the point, Germany’s Deputy Foreign Minister, who was present at the debate, made it clear that his government shared the Bundestag’s views on the need to upgrade the north, speaking of a “coincidence of opinions” between government and Parliament.

For years and years, we have ignored realpolitik to base our struggle on the legality of our position. For years, we have succeeded because, for all its machinations, the international community acknowledged that we had been hard done by.

Today, rightly or wrongly, the international community is beginning to think that the Turkish Cypriots have got a raw deal, and we are being blamed.But if we’re right, why should we be worried? Because right and wrong are utterly subjective and the international community will not hesitate to tear up the rulebooks if it feels so inclined.

Let’s not look far: fed up with the failure of Serbs and Albanians to reach a mutually acceptable solution to the status of Kosovo, the international community has come up with its own solution, the Ahtisaari plan, establishing Kosovo's independence under EU supervision.

Legally, Kosovo is part of Serbia, yet Belgrade’s total opposition to the plan is simply being ignored. Russian solidarity for Serbia may be holding up the plan’s adoption by the UN Security Council, but the fact is that Kosovo will be independent, sooner rather than later.

Going further back, was it not Germany’s unilateral recognition of secessionist Croatia and Slovenia that sounded the bloody death knell for the former Yugoslavia? Again, there was no referendum in Serbia to ask them what they thought of the idea, it simply happened.This is the brutal reality of power politics and it’s time that we woke up to it.

This is not the Islamic conference standing up for its Turkish brethren, this is Germany, one of the most powerful countries in the world, one of our partners in the European Union and a country that has openly opposed Turkey’s EU accession hopes.

And what are we doing? Raising the barricades and issuing veiled threats when we should be engaging, explaining, desperately trying to rescue our precarious position.

Serbia too was convinced that it was right: it huffed and puffed and denounced imperialist conspiracies. Effectively, it excluded itself from the debate on its own future. We should beware of following its example.

Cyprus has turned into a tired old whore

OUR tourist industry has become tacky and is in a state of decay, mirroring a general malaise, a loss of love and respect for our island, few voicing a pride in being Cypriot any more.

When a country is truly beautiful like Greece with its 200 islands and many stunning peninsulas which the inhabitants adore and care for as the Italians do their manicured Renaissance cities of Florence, Sienna, Venice or Verona, and France their lush countryside, chateaux and cathedrals, what can we claim for Cyprus other than a stubbornly divided, rubbish-littered island suffering from tasteless over construction, incoherent planning and dubious building inspection procedures, deteriorating roads and few improvements in infrastructure to ease the flow of the rising number of luxury vehicles?

We say bitterly in the south that they (in the north) have taken the best part of the island; Kyrenia with its impressive castle and harbour, Famagusta with its Venetian walls and 13th century cathedral, Morphou with its miles of orange groves, Salamis with the island’s most important historic site and sandy coastline from there to the point at Apostolos Andreas.

And we accuse them of destroying the north by covering refugees’ land with quick build and selling them to foreigners. But judging by the many letters published over the past few weeks in the Sunday Mail, all without exception disparaging of our tourist and property industries on both sides, it seems we are finally on a downward spiral.

Have we turned Cyprus into an old whore, used and exhausted, many profiteering from this recent period of clueless over exploitation? Bravo I say to our Ministry of Finance as we, along with Malta, have met Brussels’ criteria for entering the euro next January.

And what will it mean other than an increase of between 5 and 15 per cent in our cost of living as was encountered by all member states on conversion? Never mind what our government tells us about price controls, they can’t even control traffic (street cameras instead of a visible police presence have given motor bikes and illegibly number plated roadsters a free grand prix through our cities every night) or clear the rubbish from our streets and parked cars from our patchy pavements.

Just look at the fiasco endured by most outpatients at the new General Hospital, the chaos that reigns in most departments of our administration. By meeting those criteria, our government has criminally neglected our infrastructure, industry, tourism and the creation of real jobs.

As more and more hotels close down, cheap labour (eternally at the mercy of a capricious Migration Department) loosely welds our economy together while we grow fat at desk jobs or driving lucrative taxis due to a pitifully inadequate public transport system. The capital is only now laying main drains in its crowded suburbs.

The Cyprob, this accursed impasse, overshadows all.

The price of land in the south has quadrupled over the past 10 years and made many non refugees wealthy beyond their dreams. And it’s this speculation that has destroyed us, ingrained as it is in the Cypriot psyche.

Today we live for tomorrow’s increase in the value of our land, satisfied it seems by the many hours of parochial television news that repeats ad nauseam the same old chestnuts. A people elect the government they deserve, one that has led us towards a permanent division of the island. Greek Cypriots see themselves as a single family, one people, indivisible under God.

And incest leads to blood line disorders and eventually, insanity. We are no more European in our outlook than the Israelis, and they invented Him and have built a high concrete wall to contain the aggressor. But rockets fly over that wall and land in their border towns.

Are they living in a prison compound? Are we and don’t yet realise it? I suppose we’re too busy spending our bank loans to notice as we slide obliviously into a state of isolationism not dissimilar to theirs. A Cyprob solution, no matter what it is, is our only way forward and essential to our children’s future survival.

The alternative is a selfishly aimless and self-destructive society. We are in dire need of an individual with vision, a voice capable of being heard above the din of those many divisive tacticians who have grown rich at the expense of the 200,000 refugees in the south and the 100,000 or so imprisoned in the north. We need an individual who is proud to be a Cypriot.

Does anybody know one?

The following article appears in the mainland Turkis press, 'Today's Zaman'. It is a worthwhile reminder that there are 2 sides of the Cyprus story.

Who destroyed the independence of Cyprus?

In 1959 Turkey, Greece and Great Britain agreed on a formula to settle the Cyprus problem. It was obvious that Enosis (union with mainland Greece) was out of the question as long as the Turkish Cypriots refused to accept it and Turkey supported them.

A compromise proposition for “double Enosis” had been turned down by the Greek side, so the only remaining solu­tion seemed to be “independence” for Cyprus.

After full consultations with the leaders of the two peoples, the Zurich and London Agreements were drawn up. The Turks and Greeks of Cyprus were to become co-founders of the republic and Enosis in any form was to be prohibited, with its prevention guaranteed.

The two peoples were to be auto­nomous in their communal affairs, while participating in the central government on an agreed ratio of 7:3. A functional federation was thus established by the two people who worked together for 18 months in preparing the Cyprus Constitution.

Archbishop Makarios became the first president of this bi-national republic. His first executive action was to appoint Polycarpos Yorgadjis, a notorious National Organization of Cypriot Fighters (EOKA) killer with a pathological hatred for Turks, as minis­ter of the interior. Subsequently other EOKA leaders were also given key positions in the government. This was the first step toward the undoing of the newly born Republic of Cyprus and its independence.

It soon became clear that Makarios had never intended to promote and support the bi-national Cypriot state. He looked upon it as a Greek state and ignored virtually all Turkish rights enshrined in the Constitution.

He made no secret of his intention to amend the constitution at any cost and to abrogate the international agreements that pro­hibited union with Greece. To this end he authorized the formation of underground armies to carry out a planned program of action known as the Akritas Plan, which was drawn up by Tassos Papadopoulos, the so-called president of Greek Cypriot Administration since 2003.

On Nov. 30, 1963, Makarios confronted the Turkish wing of the Cyprus government with a proposal for 13 amendments that he must have known in advance would not be accepted. He relied on Turkish resistance to any changes in the Constitution, which had not yet been fully implemented because of the Greek Cypriots and which had only been in force for three years.

For their part the Turks were fully aware of the real intention behind the proposal. They had been following Makarios’s increasingly strident statements about Enosis since independence.

For example, on Sept 5, 1963, Makarios had told a Uusi Suomi correspondent in Stockholm, “It is true that the goal of our struggle is to annex Cyprus to Greece.”

Barely a month before the declaration of independence, in a public speech, Makarios said: “The agreements do not form the goal; they are the present and not the future. The Greek Cypriot people will continue their national cause and shape their future in accordance with their will. The Zurich and London Agreements have a number of positive elements but also negative ones, and the Greeks will work to take advantage of the positive elements and get rid of the negative ones.” (published in the local Greek press on July 28, 1960)

The negative elements Makarios referred to were of course the rights and the status the agreements gave to the Turkish Cypriots and the provision that barred Enosis.

On Dec. 21, 1963, Makarios unleashed his secretly formed armed forces against the Turkish people. Greece was hand in glove with the archbishop in this new conspiracy to destroy the Republic of Cyprus.

Within a few days a wave of violence broke across the island. Armed Greek Cypriot bands, assisted by the Greek Cypriot members of the Cypriot gendarmerie and police, attacked Turkish Cypriot homes in villages and towns in a ruthless rampage of murder and vandalism.

These attacks lasted till 1974, when the Turkish Armed Forces (TSK) stepped in to save the lives of the Turkish Cypriots.

I still wonder how Greeks dare to say the Cyprus problem started in 1974

Cyprus beaches cleanest in Europe: EU report

Cyprus has the cleanest bathing areas in the European Union which meet the stringent hygiene standards, according to an EU report released on Thursday.

The report said compliance in Cyprus in 2006 with mandatory values and the more stringent guide values stood at 99 percent, with 100 coastal bathing areas being monitored from May 15 to October 31.

"This is the third year that Cyprus has reported data on bathing water quality in coastal areas.

This is a remarkable effort, considering that Cyprus joined the EU only in 2004," the report said.

The annual bathing water report presented by the European Commission revealed that the large majority of bathing sites across the European Union met EU hygiene standards in 2006. Ninety- six percent of coastal bathing areas and 89 percent of bathing sites in rivers and lakes were in compliance with the mandatory values.

Cyprus topped the list of member states that comply with EU hygiene standards with 99 percent, followed by Greece with 96.9 percent. Spain, Italy and Ireland were also among the first five with cleanest beaches.

EU member states are obliged to report every year on the quality of coastal and freshwater bathing areas located within their territory. A total of 21,094 bathing areas were monitored in 2006.

Cyprus unemployment among lowest in Europe

CYPRUS has the fourth-lowest unemployment rate in the EU.

Figures for April show the rate at 4.4%, according to figures released by Eurostat.In the Eurozone, average unemployment stood at 7.1%. The lowest rate was in the Netherlands with 3.3%, followed by Denmark with 3.4%, Ireland 4% and Cyprus 4.4%.

The highest levels were recorded in Poland with 11.2%, Slovakia 10.5%, France 8.6% and Greece 8.6%.

In Cyprus, the unemployment rate for men in April 2007 was 3.7%, women 5.3% and persons under 25 years of age 9.1%.

Eurostat estimates that 16.7 million men and women in the EU27, of which 10.6 million were in the euro area, were unemployed in April 2007. In April 2006, 18.7 million men and women in the EU27, of which 11.8 million were in the euro area, were unemployed.