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Saturday, February 15, 2014

Closing Bakeries in Cyprus - A Stale Industry with Over-Baked Regulation


This week the Cyprus Weekly reported that some 100 bakeries in Cyprus were forced to close down over the last six months due to serious financial problems, citing the Cyprus Bakeries Association as saying that longer universal shopping hours and the economic situation had forced these businesses to close.

Apparently opposition party AKEL MP Andreas Fakontis stepped in to say that longer opening hours for all shops has created "unfair competition" while also encouraging abuse of the minimum age and working hours of employees - raised as an opposition argument against the Labour Ministry and its current decree on increased hours for shops.

I almost laughed when I read this article due to the political nonsense raised by this matter, although I feel bad for smallholders who have failed to make their businesses work through the economic disaster in Cyprus since 2013.
I would like to raise the following points -

1. How many bakeries are there in Cyprus, and indeed, how many were there before a whopping ONE HUNDRED of them closed down?

Is this a stupid question, or am I correct in asking? Cyprus has a population of less than a million people, and even during the prime tourism months, it seems unlikely to push well beyond double that during the current crisis. How many bakeries have been set up by enterprising smallholders in such a small island and its tiny market? Do many entrepreneurs have no imagination? Or is this simply a case of anyone setting up their own bakery because they think it is an easy and uncomplicated affair, despite the fact that there are already three bakeries and a supermarket in the immediate area?

2. Universal Increase in Shopping Hours benefits the Economy - and undermines AKELs grassroots supporters - the Trade Associations and Trade Union groups.

The directive issued by the Labour Ministry in July 2013 allows all shops to remain open much longer during both weekdays and weekends. Although I have long argued that over-regulation of the retail market is rife in Cyprus, I find this move to be beneficial. People want to go shopping when it suits them, and not when it suits the market rules. Finally we have seen the Labour Ministry of Cyprus move in favour of consumer interests and away from the old-guard power base of trade associations, who attempt to control their various markets through absurd regulations - like forcing supermarkets not to sell bakery products at certain times of the week so as to favour the independent bakeries during prime shopping periods.

3. Industry Diversification is essential, and the stranglehold of absurd market regulations must be removed

Competition is essential. The best businesses with the best business models, best management, best service and best products must be allowed to thrive, while the weakest and worst business that they are in competition with must be allowed to fail. This is the core principle of free market economy. If someone cannot run a business well enough to make it work, then they are either in the wrong business, or they are incompetent. For too long, Cyprus has rewarded welfare, incompetence and populist trade groups, whilst equally punishing entrepreneurs who, under the right market conditions, would thrive - creating new skilled jobs, new income for the economy, new ideas and innovation, and greater strength for Cyprus to trade with the outside world in the form of exports.

Conclusion

The fact that 100 bakeries have closed down as a result of the longer shopping hours and the economic situation is CONTRARY to what opposition party AKEL would have you believe - a shaking of the tree to remove the rotten apples that cannot compete with more successful businesses. How long did we expect such market conditions to last before the 2013 economic crisis? The Republic of Cyprus failed because of its own stupidity - not because of some absurd notion of Troika conspiracy, the Turkish military occupation or the global credit crunch. The country fell down onto its over-bloated ass because the Cypriot concept of free market is rotten at the very core of the country's ability to make money and keep money. Blaming the welfare state, obsolete communism and the populist politics of Cyprus is simply not sufficient. We must also lay blame at the feet of every person who decides to set up a common business (like a bakery) in an overloaded market with too few consumers and almost no conditions or willingness to diversify.


To put it simply, the bead is baked. But there is either no one to buy it, or you are not allowed to sell it. 

Wednesday, January 29, 2014

Petition for UK Property Buyers affected by Cyprus Property scandal





I would like to inform readers of the current petition taking place on the popular website change.org, which is being utilised to call for a BBC Panorama investigation into the scandalous practices that has been, and are still frequently used in selling off-plan property in the Republic of Cyprus. In many cases, UK citizens wishing to purchase property to order in an off-plan format (i.e. before the property is built) have had their property rights contested by banks, even though they paid in full for their properties, because the developer has defaulted on outstanding bank loans. Additionally, the obsolete and bureaucratic system of issuing title deeds in Cyprus means that many people have gone without having them for more than a decade after applying to receive them. Additionally, a developer can choose to engage in corrupt practices, withholding title deeds for ransom, and forcing the buyer to go to court (a lengthy process in Cyprus, often taking many years and great legal expense). The property industry has also been affected by scams involving developers and property lawyers working together to ensnare prospective buyers, forcing clients to pay far in excess of what they initially owed for the property by confidence-scamming the due legal process after the initial deposit.
It is abundantly clear to me that the property industry in Cyprus is in need of radical overhaul and must be subjected to rigorous administrative regulation, enshrined in law and supported by a streamlined, property-specific claims court circuit with dedicated judges and clerks.

By reforming the property industry in Cyprus, both the Cypriot economy and its stakeholders will benefit, and it is clear that the current system of shoddy and disturbing practices has often treated trustworthy and respectful British clients as scam targets, rather than full and proper stakeholders in Cyprus PLC.
It seems likely that a BBC Panorama investigation will pile pressure on Cyprus to conform with good international standards, as a full media uptake of this story will alert prospective British buyers, as well as their social networks and MEP representatives to take action.

You can visit the petition site at the following link:


I would like to thank Mr Barrie Hardy for alerting me to this story by email.

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Thursday, January 16, 2014

Cyprus Naval Base Explosion - New Photos of the 2011 Disaster


On 11 July 2011, the Republic of Cyprus suffered a major man-made disaster at the Evangelos Florakis naval base in Zygi, adjacent to a major power station. A consignment of explosive ordinance, held in heavy containers had been confiscated from a ship attempting to smuggling illicit weapons, principally in the form of gun and rocket propellant. Just after sunrise on 11 July 2011, the huge stack of containers (which had been stored improperly in the open air, close to major and vulnerable infrastructure, and in dangerous environmental conditions) was apparently compromised by a small bushfire ignited accidentally close to the storage site. Escaping vapours from the containers ignited, causing a huge primary explosion in the multi-kiloton range, with a number of much smaller secondary ignitions. The main power station at Mari, just a few hundred metres away, was effectively demolished, whilst 13 sailors and firemen were killed. Traffic passing on the nearby Limassol-Nicosia highway was impacted, with windows of vehicles shattered and drivers crashing as the concussion and overpressure wave passed from south to north across the highway. 

The photos you see presented in our YouTube video were taken by G.Vassiliou with an LG mobile phone, a few moments after the explosion, from the village of Pareklisha (alternative spelling: Pareklissia) situated about five miles distant to the north-west of the explosion. A total of six photos were taken, but only three were used in this video due to poor light conditions and shaky photography. The photographer reported that there was a strong odour "similar to burnt fireworks" that permeated the early morning air for up to an hour afterwards. The electricity supply was unavailable in Limassol for some time afterwards, meaning that many people had to use transistor radios or their cellphones to get information. 

The effect of the disaster was enormous to both the morale and the economy of the people of Cyprus - just weeks later, it became clear that the country was heading for financial ruin under the Government of Dimitris Christofias and the ruling Communist Party, AKEL. An urgent Government enquiry headed by Polys Polyviou pointed the majority of blame directly at the incumbent President Christofias, who rejected the findings. 

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Sunday, January 12, 2014

Russians to use Cyprus airbase and port

On 10th of January 2014, the news broke that Cyprus had granted the Russian armed forces access to the Andreas Papandreou Air Base in Paphos (on the south-western coastline), as well as the new Limassol deepwater port (on the southern coastline) 1, 2

The move by Nicosia represents, to some, a paradigm shift in global political strategy for East and West in the Eastern Mediterranean, as Cyprus is a stable EU democracy on Europe's eastern flank.3 The provision of capital air and naval installations to Russia is widely expected to provide both the Russian Air Force and Navy with unprecedented strategic projection in to the Eastern Mediterranean and Middle East (Cyprus is geographically central compared to existing Russian deployments at Tartus in war torn Syria, and closer to both the Suez Canal and the energy security interests already identified by Cyprus, Israel and Egypt). However, for the moment, Cyprus has restricted the terms of use of these bases to emergency and humanitarian missions only, and it appears that Russia will not (yet) be provided with storage facilities 4.

The arrangements between Nicosia and Moscow were apparently formalised in secret in May and June 2013, during successive visits by Defence Minister Fotis Fotiou and Foreign Minister Ioannis Kasoulides respectively. 5, 6, 7

It seems likely that the Cyprus Government under the administration of President Nicos Anastasiades will be forced to backtrack on prior interest by the leadership towards NATOs Partnership for Peace Initiative 8. In recent months, Cyprus has been hosting port facilities top numerous countries including the US, Russia and China 9, perhaps putting on a public relations front prior to what would undoubtedly be a controversial endorsement of Russian deployment  - something only ever previously granted to France (from 2007 onwards) 10. However, unlike the deal made with France, which formalises terms of use for airbase and port usage in emergencies, it seems likely that the Cyprus Government is actually preparing a legal basis and framework upon which to build a far stronger arrangement with Moscow. This might indeed take the form of a major military deployment (naval task force and tactical air group) of the Russian armed forces to Cyprus in the event that control of Tartus 9 is lost in Syria as the civil war continues there.

Additionally, Russia likely considers Cyprus to be a far safer bet in terms of what nations are available in the Mediterranean basin with access to stable democratic rule, well established financial institutions within the European markets, and access to a huge potential energy security interest in the form of offshore gas and oil supplies. Large numbers of Russian investors, already based in Cyprus were undoubtedly hit by the "Bail-In", considered by some in Cyprus as a direct challenge by the EU against Russian-owned financial instruments operating shadily within Cyprus and her free market and banking system.

Conversely, Cyprus appears to have been forced (ironically by the preposterous EU bail-in conditions of the Troika) to choose firmly between East and West for the first time since her independence at the height of the Cold War. The jury is in, and the verdict is out. Cyprus has, to all intents and purposes, dealt her hand in favour of Russia, and it is not clear if she ever really had another feasible choice. Here are some reasons why that may be the case:

- Turkey (a key NATO member) has made it clear on repeated occasions that it will use military violence to prevent Cyprus from exploiting oil and gas supplies in the Mediterranean by unilateral means, effectively eliminating any interest in tying the energy supply to a solution on the islands partition 11.

- As a NATO member, it is unlikely that Turkey would permit Cyprus to enter unilaterally into the Partnership for Peace Initiative anyway. This is widely seen as a countermeasure  for Cyprus' veto power on Turkish EU accession.

- Russian investment in Cyprus  is massive. It is highly likely that Russian investment in the island will increase as strategic investors weigh up the improved-benefit to reduced-risk scenario posed by heavy Russian forces capable of projecting quickly to Cyprus and doing so legally.

- Russia discretely removed Cyprus from her offshore tax blacklist shortly before any of this happened, for some a market signal that Russian confidence in Cyprus investment vehicles would be boosted in the long term. There is no indication that this attitude has changed post EU bail-in.

- Russia is a permanent member of the UN Security Council, and has proven in the past that it is prepared to voice Cypriot interests through veto power (April 2004) 12.

Conclusions

The move by Cyprus to supply air and naval bases for Russian usage likely leave the door open for future and very rapid development based on an existing legal framework established this month. Is this a major signal that Cyprus is insuring herself heavily against Turkish interference in what may be an oil and gas bonanza in her offshore zones? Perhaps. It also does not stretch the imagination to believe that Russia is about to dump Assad's regime in Syria and pull out of Tartus, once an appropriate point of exit has been attained - the location of Tartus appears to be compromised for the long-term, regardless of who comes out on top in the civil war. There appears to be a major high stakes game of poker taking place in the Mediterranean, and Cyprus appears to be the dealer for the next hand.




Sources:
1, 4, 5, 9. "Cabinet gives OK for Russian use of Paphos base", by Stefanos Evripidou, published in Cyprus Mail on 10 January 2014, at URL: cyprus-mail.com/2014/01/10/cabinet-gives-ok-for-russian-use-of-paphos-base/

2, 3. "Russians to use Paphos airbase", published in inCyprus on 11 January 2014, at URL: incyprus.philenews.com/en-gb/Top-Stories-News/4342/39101/russians-to-use-paphos-airbase

6. "Russian military get coveted foothold in Cyprus" published by Famagusta Gazette on 10th January 2014, at URL: famagusta-gazette.com/russian-military-get-coveted-foothold-in-cyprus-p21986-69.htm

7, 10. "Cyprus considering Russian military use of airbase, port facilities" published by UPI.com on 25th June 2013 at URL: www.upi.com/Top_News/Special/2013/06/25/Cyprus-considering-Russian-military-use-of-airbase-port-facilities/UPI-23571372133220/

8. "Our View: Military base dispute means we might finally have to choose between East and West," published by Cyprus Mail on 26th November 2013 at URL: cyprus-mail.com/2013/11/26/our-view-military-base-dispute-means-we-might-finally-have-to-choose-between-east-and-west/

11. "Decision imminent on whether to buy two Israeli gunboats" by Elias Hazou in Cyprus Mail on 18th December 2013 at URL: cyprus-mail.com/2013/12/18/decision-imminent-on-whether-to-buy-two-israeli-gunboats/


12. "Russia vetoes Cyprus Resolution" published by BBC News on 22 April 2004 at URL: news.bbc.co.uk/1/hi/world/europe/3648339.stm

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Previous Article: Vandalism in Cyprus

Wednesday, January 8, 2014

Vandalism in Cyprus



On a hot day in August 2013, I spotted this act of vandalism on a wall along the prominent tourist stretch of the Limassol beach front road. I had been walking down from a cafe to a car park where I had left my vehicle, and must have counted at least fifty or sixty separate vandalisms (spray paint / marker pen scrawls for the most part, as well as rival vandals trying to destroy each other's handiwork) in less than ten minutes.

This one, however caught my eye. The "Smash Capitalism" logo, accompanied by what appears to be an anarchy marking, as well as what I think is a communist sickle symbol. I found the whole idea of the vandals intentions laughable at first - after all, it was a Communist President and his party who I blamed whole heartedly for destroying the national economy in less than four years of total catastrophe. I believe many others share that sentiment, and not only those outside Cyprus.

However, after taking my photo, I realised the relevance of the Anarchy symbol - I personally think this is what the vandal was talking about in their own confused or demented manner - a simple, angry and misdirected expression of anger at a world they don't seem to understand or know how to confront in an intelligent manner. Anarchy and Communist symbols placed together are a complete contradiction of what either are about. Anarchy implies non-conformance, while communism demands it. Both however, have used savagery from the moment of their genesis in order to attain their places in the world, making them no different from Capitalism at large. They are simply different ways of living.

What however, makes this particular act of vandalism particularly distressing however, is that it is scrawled on the garden wall of some poor soul's house, possibly as a result of the house now being located in an expensive area. The vandal clearly wants to make others think that they are on some kind of noble, underground quest to subvert a world filled with evil - yet it is they who purvey evil, albeit in an entirely different brand - the brand of stupidity, malicious discontent and brainlessness. Who else would resort to such moronic methods to assert their views. There is no art here. There is no wisdom here. There is no goodness here. There is nothing that removes this piece of vandalism from any of the other tags left around town marking gang and drug dealer territories, calling for "all Turks to be killed", calling for "foreigners to get out" and all the other markings of street vermin.

These are not rebels without a cause. These are not rebels without a voice.

These are rebels without a brain.  

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