Cyprus rejects a deposit levy
Will Cyprus survive the new economic crisis? Nicos Anastasiades, the new Cyprus President, who took office 1st march 2013 with a mandate to lead Cyprus out of the economic crisis for which mostly responsible was the last government lead by Demetris Christofias, was shocked when Cyprus' partners in the Eurogroup set, as a precondition for bailing out Cyprus from its economic burdens, a Cyprus deposit levy as much as 6.75% on deposits up to EUR 100,000 and 9.99% for deposits over EUR 100,000. The latter is aimed mainly towards Russian accounts in Cyprus banks.
It was up to the Cyprus Parliament to approve or disapprove the Eurogroup imposed Government bill and it was proved that for the majority of the house this bill in its present form was a no no, as it went down in today's vote with none of the votes in favor. Efforts are under way to find a solution that will completely exclude tax on bank deposits, which are in any case protected by law that guarantees such deposits. Banks remain closed today and tomorrow and will probably stay closed until next Monday, a national holiday in Cyprus, to give time to MPs and the Government to find an alternative way to raise the required 5.8 billion Euro for refinancing the banks, but it is not easy to foresee the outcome.
Cyprus, still looking at a bright future by the end of this decade with the recently discovered natural gas reserves, can feel very bitter towards its EU partners; and the years to come may find Cyprus voluntarily leaving the Eurozone, if this does not happen already in the next few days amidst a total financial collapse as a result of the efforts in refinancing the banks reaching a dead end by next Tuesday morning...
It's All About Money!
Now it's all about money. In the past, presidential elections focused on the Cyprus Problem and the ongoing occupation of the island's north by Turkey. Now the Cyprus problem is second in line, with the economic crisis ranking first in opinion polls among Cypriot voters. An economic crisis that was an accident waiting to happen, mainly because of the two major local banks' high exposure to Greece's collapsing economy on the one hand, and on the other, the high expenditures of the Cyprus Government, mainly towards paychecks and benefits for the numerous government employees who outrank in earnings the private sector by far. To bail out the Cyprus economy Troika has now imposed austerity measures that are greatly unpopular especially among public servants, although the crisis has affected mostly the private sector with unemployment at its highest, earnings at their lowest and businesses shutting down in a geometric progression. The recent discovery of substantial volumes of Natural Gas at block 12 offshore Cyprus (and future prospects on more blocks) cannot come to the rescue as they are not expected to yield income before the last two years of this decade. But when they do, and if Cypriots manage to start learning from their mistakes and manage their prospects wisely, they may find themselves in the early twenties among the rich and famous of this planet...
for prosperity for the people of Cyprus
Projected economy boost!
The recent discovery of substantial volumes of Natural Gas at the block 12 offshore Cyprus by Noble Energy, amidst the international financial crisis, has raised hopes that an economy boost on the island can be expected in the years to come. The quantities discovered on just this one drill are enough to cover the island’s energy needs for the next two hundred years at least. More importantly, the Cyprus Government has proceeded to a new round of licensing for 11 more offshore blocks that show promise for much bigger quantities of natural gas and oil. Energy availability in Cyprus suffered a blow after last summer’s explosion at a naval base that devastated the nearby main electricity plant and has still not yet recovered fully, so tangible returns on natural gas and oil prospects are much awaited by the government and people of Cyprus. Cyprus, a European Union member, will be presiding the Union for a six months period starting July 1st this year and the focus is on doing a perfect job that will raise Cyprus’ shares among its Union partners. Intercommunal talks are almost at a dead end while politically the island is entering a 10 month long pre-election period for the upcoming presidential elections in February 2013, with left wing President Demetris Christofias reported to have decided not to run for a second term after his popularity plunged, mainly a result of the blast at Mari Naval Base and the consequent findings against the President by an investigating committee. For the moment, prime candidate for the next term of the Cyprus Presidency is Nicos Anastasiades, leader of the moderate right wing leading party of DHSY (Democratic Rally).
October 3rd, 2011: The findings of the Investigating
Committee for the explosion at the Cyprus Naval Base
Guilty as charged!
Polys Polyviou, president of the One Man Investigating Committee for the explosion at the Cyprus Naval Base last July, today presented publicly the committee’s findings on its two month investigation. Mr. Polys Polyviou, who was appointed as head of the committee by the Government Cabinet, concluded that the ex ministers of Foreign Affairs and Defense bear serious responsibilities for the incident but mostly responsible is President Demetris Christofias himself, who had full control over the handling of the issue regarding the dangerous seized cargo and who knew or ought to know, but according to Mr. Polyviou’s conviction at some point did know, of the critical state of the cargo but failed to protect the public from the imminent disaster: A huge explosion that caused the death of thirteen naval and and firefighting personnel, injured many others and left the island’s economy crippled with the destruction of the country’s major power station.
The findings of the Investigating Committee are political, independent from the country’s judicial system with a parallel investigation by the Police under the control of the Attorney General, but Mr. Poliviou urged the Attorney General to look into the possibility of criminal offenses by any person bearing political responsibility as per the findings of the committee, implying the president of the Republic himself as one of them.
On appointing the Investigating Committee, President Christofias in a public statement said he will respect the committee’s verdict and will undertake any possible political responsibilities attributed to him by the committee. It remains to be seen if this will lead to the president’s resignation, something that opposition parties strongly request following the committee’s findings.
September 6th, 2011: President Christofias
testifies before the Investigating Committee
President Demetris Christofias gave testimony today before the Investigating Committee for the explosion at the Cyprus Naval Base last July. During his initial statement and answering to committee’s questions, the President refused to acknowledge personal responsibility as to the handling of the confiscated explosives issue and blamed for all the wrong doings the military, his advisors and the ex ministers of Defense and Foreign Affairs. His response outraged opposition leaders, the relatives of the blast victims and the majority of public opinion. The committee is expected to finalize hearings by the 15th and hand out its verdict by the end of this month.
August 23rd, 2011: In the aftermath of the
huge explosion at a naval base in Cyprus
The huge explosion of the 98 containers loaded with ammunition at the Evangelos Florakis naval base and the nearby Vasilikos power station on the southern shores of Cyprus left 13 dead, and the island’s electricity supply crippled to approximately two thirds of its total capacity. Cypriots had to endure daily power cuts for more than a month until emergency generators were brought in to compensate for the power lost. There had been no power cuts in Resort areas though, in an effort to leave the flourishing tourist industry, amidst the high season, untouched from the consequences of the blast. August holidays season helped keep electricity demand low and it is hoped that with vacationers returning late this moth and early September that the recovering power supply, though not at pre-blast levels, will closely match demand until the whole situation is back to normal.
Meanwhile, unprecedented demonstrations are being held, almost on a daily basis concentrated mainly around the presidential palace, with demonstrators demanding justice for the victims and the resignation of the island’s preesident Demetris Christofias who persistently rejects these demands. An investigating committee as to the causes for the blast has been appointed with power to investigate even the President and is expected to publish its findings by the coming October.
There is an ongoing heated debate these days on issues regarding the economy of the island which suffered a severe blow by the explosion amidst the general economic crisis which did not leave the island’s economy untouched. Proposed bills for financial measures proposed by the government are considered by the majority opposition inadequate and it remains to be seen later this week at the country’s parliament whether the bills will be passed as such or there will be more strict measures added by the legislative body, mainly towards cutting public expenditures and shrinking the public sector paychecks more than the government proposes.
July 11th, 2011: Huge explosion at naval base in Cyprus
A huge explosion at 5.40 AM today devastated the Evangelos Florakis naval base and the nearby Vasilikos power station on the southern shores of Cyprus, leaving the island’s electricity supply crippled to approximately two thirds of its total capacity. Deaths and injuries were reported among navy personnel and firefighters. Confirmed reports raise the number of deaths to 12 and 62 wounded some of them in a serious condition. Early information as to the causes of the explosion speaks of fires in one or two of a total of ninety eight 20-feet containers packed with explosive material that was kept at the base since year 2009 after Cyprus intercepted a ship heading to Syria from Iran carrying the said explosives and confiscated its cargo implementing a relevant UN resolution. The initial fire resulted into a huge explosion with all 80 or so containers blastng into what witnesses described as one of an almost nuclear proportion.
The explosion was so huge that houses in surrounding villages suffered severe damages, whilst cars traveling along the nearby Nicosia – Limassol highway were hit by flying debris wounding drivers and passengers.
It was a tragedy that could be prevented people say, pointing out that the confiscated explosives were left for almost three years unprotected at the mercy of weather conditions, especially with the hot summer Cyprus sun. They speak of heavy responsibilities by the military and political authorities of the island entrusted with the cargo’s keeping and who had – according to reliable information – early warning by experts and the naval base command that the containers were already showing signs of deterioration and swelling due to improper storage.
The power shortage is already evident on the island with frequent power cuts, amongst pleads by officials to the public to use generators where possible and keep air conditioners shut, something more easily said than done with temperatures inland reaching 39 degrees Celsius today. It was also said that it will be weeks until Vasilikos power station is back to production and action is being taken for the use of mobile power units that will at least partially cover the lost capacity so as to meet the island’s needs which reach their top during the summer tourist season.
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