Cash for Turkish Cypriots Welcomed

The Cyprus Government welcomed an announcement on 24 October by the European Commission (EC) that EU funding of 22 million has been allocated to a programme to strengthen civil society in the Turkish-occupied north of Cyprus and to develop bicommunal partnerships. The funding comes from the 2259 million allocated to the Turkish Cypriots upon Cyprus’ accession to the EU in 2004. The Turkish-occupied area has been excluded pending a political settlement.

The Government supports the EU funding in the interests of improving conditions in the north, but has pointed out that its so-called “economic isolation” is self-inflicted. It has therefore opposed the introduction of “direct trade” between the EU and the occupied area in breach of the legal rights of the Republic of Cyprus.

EC figures showed that in the first 12- month period of the financial aid regulation’s operation, allocations of the 2259 million totalled 214.5 million, of which only 24.65 million was disbursed. The EC said that political and legal constraints were posing challenges to the successful implementation of the regulation.

The EC explained that the newly allocated 22 million was for the Cypriot Civil Society in Action Programme, which aims to develop trust, dialogue, co-operation and closer relations between the two Cypriot communities as an important step towards a solution of the Cyprus problem.

The EC’s annual report on the 2004 Green Line trade regulation showed that intra-island trade increased to an aggregate value of 24.4 million in May 2006-April 2007. Turkish Cypriot trading to the Government-controlled areas totaled 23.38 million, whilst Greek Cypriot trade in the other direction was valued at 21.02 million. In the same 12-month period 1.34 million north to south crossings were made along the ceasefire line by Turkish Cypriots, whilst 788,823 south to north crossings were made by Greek Cypriots.


Tenders Invited for Artimedia Project

The opening of bids to reconstruct the village of Artemida in the Greek Peloponnese, which had been destroyed in the forest fires of late August, was announced by Interior Minister Christos Patsalides on 25 October. The Cyprus Government has undertaken to meet the estimated 214.5 million cost of the reconstruction as a gesture of Hellenic solidarity (see CN 09/2007).

Dr Patsalides said that he expected the reconstruction contract to be awarded in mid-December and that the feedback from the people of Artemida “is very positive”. Stressing that the key aim was high-quality work, he added that the tender would be open to bidders from all countries, and not just Cyprus and Greece.


KEVE Celebrates 80th Anniversary

A tribute to the role of the Cyprus Chamber of Commerce and Industry (KEVE) in the country’s economic development was paid by President Tassos Papadopoulos on 15 October at an annual general meeting in Nicosia marking the organization’s 80th anniversary. Founded in 1927 under British rule, KEVE today has over 8,000 member enterprises covering the whole spectrum of business activity.

President Papadopoulos told the KEVE delegates that “we have a robust economy with a 4 per cent rate of growth, increased investment, low inflation, full employment and an improved standard of living with a per capita income corresponding to 90 per cent of the EU average”. He stressed that the Government’s policy of fiscal consolidation, which had delivered “a drastic cut” in the budget deficit and public debt, would continue, combined with “a parallel strengthening of the social state” (see report below).

The President took pride in Cyprus’ impending entry into the euro-zone on 1 January 2008, whilst stressing that the Government would not tolerate profiteering price increases. Although under EU rules the Government could not set prices, it would investigate rises to establish whether they were justified and publicize the results. To this end, he said, up to 100 new inspectors would be appointed to check prices.

In his blueprint for further economic progress, KEVE Chairman Manthos Mavromatis underscored the need to restrict public expenditure, to simplify bureaucratic procedures and to obtain more funding under EU competition programmes. He also called on the trade unions to align their thinking with
the realities of the economic mainstream.

Three awards for excellence given by KEVE to overseas Cypriot businessmen included one to Antonis Gerolemou, who runs 15 companies in Britain in the restaurant and catering sector. The others went to shipping magnates Charalambos Mylonas and Andreas Hadjiyiannis.


National Sustainable Development Plan

The Cyprus Government’s action plan for implementing its National Strategy for Sustainable Development was unveiled by Agriculture, Natural Resources and Environment Minister Photis Photiou on 7 October. In line with the EU framework, the plan focuses on combining environmental protection with social cohesion and economic progress.

The challenges to be faced in achieving these goals, as set out in the plan, include climate change, energy use, threats to public health, poverty and social exclusion, population pressures, the management of natural resources, the loss of biodiversity, land use and transport.

Specific goals include energy saving through the introduction of natural gas to replace oil for electricity generation, the development of renewable energy sources and the improvement of public transport. Social cohesion targets include improved health care, population renewal, increased productivity in the public sector and more employment opportunities, especially for women. The aim is to increase the employment level of those of working age to 71 per cent by 2010 (63 per cent for women).

Mr Photiou said that the Government would draw up a set of performance indicators by which to evaluate progress made on achieving the plan’s targets and to enable corrective measures to be introduced where necessary.


Benefits and Tax Cuts Package Adopted

The House of Representatives on 11 October adopted a package of increased social benefits and tax cuts worth some C£121 million in a full year. The measures had been announced by President Tassos Papadopoulos in July to honour his pledge to take Cyprus into the euro-zone on 1 January 2008 without sacrificing the welfare state (see CN 07/2007).

Over 112,000 Cypriots will benefit directly from the measures, half of them elderly pensioners and various disadvantaged groups such as single-parent families. Middle income earners will get a higher tax free threshold, while value-added tax (VAT) will be cut from 15 to 5 per cent on certain goods and services, including theatre, cinema and sporting event tickets, vitamin pills, animal fodder and contraceptives. In a major concession to pressure groups, consumer tax on heating fuel will be cut from 11.3 cents a litre to 7.3 cents.

The package was approved unanimously by a plenary session of the House, although the opposition Democratic Rally (DISY) and left-wing AKEL party took the opportunity during the debate to call for more generous measures.

Opening the five-day 2007 Cyprus Agri-Fair in Nicosia on 24 October, President Papadopoulos said that the display of the island’s produce helped to maintain familiarity with the countryside and to promote environmental protection. Noting that EU accession was bringing change to the agricultural sector, he said that EU grants of 2190 million were expected in 2007-13 for modernizing production methods.