S.O.S Cyprus

"the real economy of Cyprus, is and has always been -Tourism." 

Cyprus is undergoing a financial Tsunami. The Cypriot business model may well have been proved unsustainable but, it is one that is followed by several small E.U countries such as Andorra, Liechtenstein, Luxembourg, Monaco, etc. The big difference being these nations are not at the centre of the most important economic and energetic cross-roads of the Western, Eastern, and Arab world.

Homer in his time described Cyprus as being ‘the whore of the Mediterranean’,  today our ‘services’ ,with the discovery of sufficient natural gas reserves capable of supplying the every single EU country for the next few decades, are more than ever in demand from powerful outside interests. This has sparked off the current crisis emanating from Germany.

The eternal rivalry between German friendly countries and Russia has found in us a new battle ground. When asked what kind of weapons would be used in a Third World War, Einstein remarked he did not know then the weapons that would be used in a Third World War, but that he was pretty sure that the Fourth World War would be fought with stones.  The Third World War we are living now. It broke out in Lisbon in 2008 with the so called Lisbon Convention when the Franco – German alliance thought that the heart of Europe was beating in Berlin and Paris.  Some months later the French realized the Germans had a hidden ace and that German strategic commercial positions were much superior. In only three years Germany managed to become the “EU steam engine”.

For us, the simple people of Cyprus, Cypriot nationals, the UK Nationals, Russians, Germans, Swedish, Dutch along with other foreign passport holders who live and work in Cyprus  all that is but political chess playing with a good dose of poker thrown in. At the end of the day all this political gamesmanship does is to confuse, disrupt, and distress.

Today, our less than appealing Cypriot politicians, are calling for us to ‘Save Cyprus’, a bit of a cheek on their part considering they are utterly incapable of saving or solving anything, other than their own backsides with all having the requisite masters degree plus PHD in self survival techniques. Over the past week there has been a wall to wall Muppet show episode on Cypriot TV (without the clever humor or remotely interesting characters)  the supposed star of the show being our Ex – President Demetris Christofias performing a vanishing act, his communist party spending air time only criticizing the new government. Then we had our newly elected conservative president Nikos Anastasiades failing spectacularly to prove he had the essential guts ( for the last 2 years he was metaphorically exhibiting these as a vote catcher) when he did not get up and exit the Euro-group last Saturday.

With our avaricious Cypriot banking system teetering on the edge, we now know how easy it is to pass from the donkey to the Mercedes and back to the donkey in less than twenty four hours.

 The fear the Euro group implanted in our brains by “suggesting” cutting of bank deposits went way beyond Cypriot borders. Every sector of the European middle classes felt the icy hand of Mrs. Merkel and her followers hovering above their wallets. It is utterly immoral to expect European citizens to pay for the gross mismanagement of the banking sector. Of course, scaring people has always been an effective weapon, but, when scared, people often react in an illogical and spasmodic manner.  Panic is the worst enemy and that is exactly what the Euro-group succeeded in provoking.

Now, we need to figure out what path we should follow. It is clear that Cyprus is capable of creating a domino effect in the euro zone, making it the perfect excuse for Frau Merkel to step in and raid everyone’s bank accounts. We do need to have a breathing space, we need to lose the panic mode, and we need to start asking all the EU countries what kind of Europe we really do want.

When the Cypriot banks open most foreign deposits will go, flying off to Malta or Luxemburg, the Cypriot banking system will shrink, 6-8000 thousand people will be unemployed and some hundreds of Bank branches will become empty shells. However, banking is not the real economy of Cyprus, the real economy of Cyprus, is and has always been -Tourism.

If you are a middle class European citizen do not ask Cypriots to give you part of their savings but help them save your savings. Help us save your money by spending it here in Cyprus. Go on your computer and book a low cost flight to Larnaca or Pafos, find your accommodation and if possible book it directly skipping any middle men to enjoy a week long holiday (or more) in any beach or mountain resort in Cyprus. In doing so you will be pumping into the real economy the equivalent of high quality oxygen and in return you will experience value for your money both in the  hospitality and sheer beauty of the island.
Don’t ever underestimate us please, we are determined NOT to be Europe’s ‘experiment’ and tourists can set us free from being wired up lab rats.

To those planning to come to Cyprus in 2013 I personally invite to come down to the seafront where at the municipal baths you will find me every morning taking a morning dip in the company of a bunch of friends so please Contact me on twitter @petrosmavros –then I can look forward to meeting you and over a complimentary coffee say thank you for being such a welcome visitor to our lovely island.

Russia can protect Cyprus

A proper solution must involve all interested parties, writes Dimitry Afanasiev

This Article was written By Dimitry Afanasiev and published in the Financial Times 

At the weekend, Angela Merkel said those “responsible” for the Cyprus banking crisis would have to pay, not just European taxpayers. Russian depositors in Cyprus were to take a hit under an EU plan – rejected on Tuesday by the Cypriot parliament – because it was politically expedient for the German chancellor.

Why are Russian depositors being held responsible? Cypriot banks are in trouble not because Russians deposited funds. It is because the terms on which EU officials (including in Berlin) opted to restructure Greek debt to protect European investments harmed Cypriot banks, which held it in significant amounts. On the contrary, thanks to Russian investment, Cyprus has developed into a modern European country.

On what basis do German officials classify Russian depositors as money launderers? And what about the stripping of the accounts of the 60,000 British bank depositors, mostly retired, and average Cypriot citizens?

The answers are clear. The Germans are pushing a blatantly irresponsible “tax” on deposit holders in Cyprus because neither the average British or Cypriot pensioner nor Russian bank depositors have any meaningful voice with EU finance ministers. And neither does Cyprus, evidently – because, although it is an EU member, it is in a dire situation.

German officials’ implication that the actions are justified because Russian funds are “laundered” adds insult to injury. It is an absurd and irrelevant argument – many Russian depositors are small and medium-sized businesses that lawfully placed their money in Cyprus. In the eyes of Berlin, any Russian or Ukrainian with a bank account is suspect.

Cyprus is stuck between an old friend (Russia) and new EU partners (not so friendly now) willing to give Nicosia money if it forgets the old friend. The European Central Bank goes as far to say it is willing to sustain the stability of Cypriot banks and lend as much as needed to maintain liquidity after the confiscation. Common sense suggests the cost of such emergency loans will likely be much higher than the €6bn that the ECB is not willing to give now because tens of billions will flow out of Cyprus if this tax stands. Clearly, there is a better solution.

First, the EU has to stop this nonsense of expropriating deposits through confiscatory taxation. The EU cannot hold itself together if, at times of crisis, decisions are made from a national (German) rather than all-European point of view and small nations are allowed to be bullied.

Second, Russia and the UK have to stand up to Germany and fight back. International law provides a good basis for holding governments and individual officials liable for inducing expropriation.

Third, Russia should respond to Nicosia’s request for help, expressed most recently on Tuesday when the Cypriot finance minister flew to Moscow. Cyprus needs €16bn. Europe is willing to give €10bn. Russia should loan the other €6bn.

A proper solution for Cyprus must involve all interested parties. This should promote further development of the country so it can pay back its debts rather than stifle business and kill the banking system. The loan made to Cyprus should be secured by its mineral resources – including rights to recently discovered offshore gas reserves – land, property and banking stocks. These interests should then be securitised and privatised. Private interests will drive further economic development, making the creditors happy and restoring Cyprus’s fortunes.

The writer is chairman of the Russia-based law firm Egorov Puginsky Afanasiev and Partners

For the Love of Paphos - by NAN MACKENZIE

I would like to thank the Cyprus Mail for this fantastic experience to share my views and ideas. Of course without Nan Mackenzie this interview would have been boring. It is great to share thoughts with a journalist who gets to the depth of your brain. Again thanks Nan for standing me for so many hours.

 A dedicated group of volunteers is determined to make Paphos’ declaration as European Capital of Culture 2017 a success. NAN MACKENZIE meets one of their key members Few people have the talent to really engage with people, to spur them on and to both educate and entertain. Petros Mavros is such a man, and he comes across as having exhausting nervous energy that fairly snaps, crackles and pops in the air around him. He is a genuine polymath, a believer in the teachings of 14th century Italian humanist Leon Battista Albertione, architect, poet, linguist, author, lawyer and mathematician, who subscribes to the view that “a man can do all things if he will”.

One area of passion for Mavros is what he calls the most human of industries, which makes it such an important national resource, where people grow with knowledge and training, and are then able to offer a truly positive customer experience. He is describing the human face of the Cyprus tourism industry, and after watching him in action during one of his company training courses it is clear that here is someone who could easily take apart an old Skoda, surround himself with all the greasy bits, and then put it back together as an XR3i.

 Petros moved with his Spanish-born wife and family to work in the Spanish hotel business. Returning to his hometown of Paphos, he now runs his own company mixing training in the hospitality sector with work as a consultant and a web master. And, like the ‘shark’, he has to keep moving forwards, constantly trying out new systems, thriving on mental challenges, testing out the validity of what he calls his “light bulb moments”. 

When asked if he could pick any time in history to be born which period would he choose? “Now. I truly love this time, no question about it, it’s an exciting period in history with the tectonic plates of technology moving so fast we will be seeing mammoth changes in the way businesses will be run in the future and how our lives will be changed. That’s coming from one who was born at a time when if you wanted to make a phone call you had to be indoors. We now have the opportunity to change things for the better but to never ever forget that at the same time, life can only really be defined in the present tense”.

Talking about changing things for the better, Petros is a key member of the team of volunteers behind the successful bid that saw Paphos named as European Capital of Culture for 2017. The volunteers – who all work on an equal footing – were responsible for putting together the successful bid. They are still very much involved in what will be staged in the town during the celebrations and changes that will need to be made in order to host it. So how does Petros see his beloved Paphos rising to the challenge of 2017? “Hope that the powers that be will come to recognise both the enormity of the challenge and the positive long-term effects this title can have not only on Paphos and its people, but Cyprus as a whole will stand to benefit. “We have an enormous opportunity here to provide a legacy for our children and our children’s children, and it cannot ever be construed as a big, one-year party that fades away after 12 months so no-one can remember it come April 2018.

Another great thing that has happened is the emergence of our band of volunteers - these are men and women who live and work in Paphos and are genuinely passionate about their town and its long-term future with the title of European Capital of Culture. Without the unstinting contributions given by our volunteers we would not have won the title, they gave up their time and worked unpaid in order to ensure the title will indeed serve as a catalyst for the cultural development and the transformation of the city. It’s their enthusiasm and commitment which we have to build on now to have an excellent, well thought out outline programme. We will as a team be able to showcase Paphos and so lay down solid foundations to build on for the future.”

When Melina Mercouri in 1983 conceived and proposed the programme of the European Capital of Culture she and the French Cultural minister Jack Lang strongly advocated that direct political involvement should not be present within the core management of any cultural capital organisation and this was endorsed within the European Union, which each year designates a city to hold the title. But how is Paphos handling this limiting of political power? “The ‘bid book’ - the bible of action to be taken - also confirms this very important point that political dominance was not in the interest of the project. Experiences within other cultural capitals have shown that a board heavily weighted on the political side invariably ends up being hijacked by political interest at the expense of cultural interests, and it then becomes a battleground for conflicting political interest, priorities and egos. “If the politicians ruled the roost, so to speak, with 2017 then we would surely be placed in a situation whereby we have a group of blind men trying to describe an elephant. One will hold the trunk and say it’s a snake; another will grip a leg and say it’s a tree; another will stroke the ear and say it’s a banana plant. They will all say different things because they cannot ever see the whole thing.”

Obviously a man capable of inspiring others, I have to assume that Petros is a born leader. Once 2017 has passed, would this lead to the natural development of seeing him run for a political post? “Every morning I join a group of friends and regardless of the weather, we go for an early morning swim in the sea. I often lie on my back and float for a time, trying to clear my mind of any stress. Sometimes I close my eyes and dream that one day gravity will cease to exist and I will just float upwards adrift over Paphos and be slowly carried by gusts of wind out to sea. When I look down from the clouds I always see the politicians who despite the loss of gravity are the ones who still cannot gain any lift”. That’s a no then.

 He is more interested in working with those in the hotel industry, giving value to people working at all levels – which is what he does when not concerning himself with the Paphos of 2017. “If our tourism business is a pyramid then the base has to be rooted in the experience enjoyed by the customer, chambermaids are, after all, the people who change your sheets and clean up after you. Of course they first walk into the training room and wonder why the hell they are there, being faced by a big fat hairy man spouting on about tourism marketing when all they can think about is how many rooms they still have to clean. But after a time they begin to realise how important they really are to the overall running of the hotel. Their work is probably the first indication a customer gets on how caring and professional an establishment really is. “My belief is that tourism is a natural resource that needs to be managed as such, with people growing with knowledge, and that knowledge being transmitted into training which not only assures working skills but most importantly human skills. It’s not important if a waiter serves wine from the right or left, what matters is the ability to transmit enthusiasm and knowledge when serving the wine, otherwise all wines will taste the same to the customer. With this philosophy front and centre within the tourism industry we can hopefully recover some of our lost ground and grow with a bit more confidence and knowledge and so assure jobs and income for people in the long term.” And driving our tourism industry forward requires the big bosses appreciating the human force and harnessing it for the power of good. “It’s important for them to understand that people have personal power or they have positional power. Positional power means I have power over you because I am the chief executive and you should fear me because of who I am. And then there’s personal power, which is what’s inside all of us, and believe me the dishwasher in a restaurant or hotel can have more personal power than someone who is a manager because they have that innate quality. In other words, being a manager doesn’t equal being a leader, what does, is in the way you treat people and how you lead, and that is part of what I subscribe to”.

 Petros comes across as a thoroughly nice guy and this too is something he underlines in his training. “Being nice is important in any job, it’s not a soft unfashionable word it’s an important one, as being ‘nice’ is as important as having passion for your job. None of us want to work for people who aren’t nice, that’s not being selfish that’s just an absolute essential in the service and hospitality business. Life is just too short to be dealing with people who aren’t ‘nice’. Give me someone who is nice and who is passionate and I can teach them everything else”. Now in his 40th year, Petros graduated in hotel management from the renowned Swiss Hotel Association Hotel Management School Les Roches, before going on to work in Europe. He is a fine writer; and as a cook lays claim to making the best paella this side of Barcelona; he relishes good wine; is fluent in English, Spanish, German and French, also speaking Catalan as well as native Greek. Married to a Spanish teacher he is father to teenage twins (boy and girl) and the family live in a multilingual multicultural home in Paphos but, he does however admit to being a somewhat difficult man to be married to. “I am a bit self absorbed, impulsive and I do like to have my own way and my work sometimes is put above my family, but I am fortunate in that my wife really does understand me and she supports me but, what I really do badly at is saying no to things”.

A new era in Managing Tourism - Cyprus should set new goals

We are heading towards the end of another summer season. Soon we will hear the voice of smug satisfaction from the mouths of those in charge of tourism in Cyprus. They will tell us: - “We have had a 3, 34% increase in arrivals, with 7.3% increase in income from last year, this means we are doing well”.

‘My goodness’, you say to yourselves-‘we are doing well, even better than expected’. –But - the $64.000 question has to be: - What exactly did our tourist experts do in order to present us with these apparently improved statistics. .

This year the circumstances have been highly favourable in that we had the Russian tourists who filled some gaps, the UK and German markets had left behind.  And more, much more than this, is in our “favour” with the Middle East under siege, our small tranquil island then became a peaceful summer oasis for travelers.

It’s becoming increasingly clear that we should now be managing tourism as a natural resource, the same way Denmark for example manages their oil resources.  In order to do this the major tourism agency of Cyprus, and I mean, the Cyprus Tourism Organisation (C.T.O.) will now have to swiftly evolve to become a creditable engine of sustainability and not, as it currently operates as an engine of sterile promotion.
The C.T.O. have to radically change its modus operandi away from their purely policing policy, and move into the serious role of being an effective professional consultant, offering much needed expertise for business owners. Key to this 21stCentury thinking has to be the radical and much needed break away from the political handcuffing it currently struggles under, and the entire organisation needs to run by true travel professionals.

Yes, there were the good old days, when three of four agreements with the so called large tour operators were sufficient to satisfy the short term need of filling those empty rooms. But, times have changed, marketing to the masses is dead, we will swiftly forget the term e-tourism, soon we will only talk about m-tourism (mobile tourism).  We predict the next 5 years will see more smartphone and tablet users than the combined population of France and the UK. That also means our travel products will have to become mobile and be much more engaging, but, to achieve this aim we do need to become a truly sustainable travel entity.

Becoming a world class sustainable travel destination will certainly not take us out of the recession, but it will lead us to a more equally shared travel pie the slice of which will give jobs to the young, create investment opportunities for the foreign investor, and assure state and private funding for generations to come.

Today, Cyprus is straddling the two concepts of sustainability and feasibility, the point being a feasible business is not necessary a sustainable one, but a sustainable business is definitely a feasible one.
‘And now that the end is near’-, we should learn from the example set by the third world Colombian Amazon village of Nazareth. This community do not allow tour operators and travel agents to bring tourists into the Amazon jungle, it’s the indigenous people who take care of all accommodation, guidance, information, and general hospitality, the end result is travelers appreciate much more this human user friendly approach compared to the one we have long adopted which is to “cater to meet needs “.

The Colombian Amazon, and the rainforests are no more, or less, important than the Akamas, and British tourists who visit Sumatra and Nazareth are banned from careering around in Quad bikes in their protected environments. Why then are tourists allowed to do it here?

We seem to be many miles away as far as comprehending how important tourism is as a long term natural resource, one that can and should feed us all- if handled properly, one that will allow businesses to flourish, and importantly, one that we can pass on not with regret ‘that we didn’t see it through without exemption’-but with pride, for the next generation to keep on nurturing.

Cuprus Tourism got lucky according to ex Finance Minister

The ex minister of Finance of Cyprus, Mr. Michael Sarris has mentioned that our economy was un-sustainable for many years. "Even in Tourism that it is our main production,we got lucky since we had the Russian market spending without looking much".

During his short speech at the Neapolis University of Pafos Mr. Sarris clarified that Cyprus has been living on debt than on production. This according to Mr. Sarris is very dangerous and it can only lead to crisis and this is were it led us.

This blog has been talking about sustainability and balance in Tourism in order to make the destination competitive. Tourism competitiveness is not only the price of the travel package but also the the sustainability and feasibility of the Travel Sector in a broader sense.

Privatization or Cyprus Airways is now a desire that cannot be fulfilled, this could be the beginning of a new era in the travel sector in Cyprus, but unfortunately Cyprus airways and the related to it services and companies are closing down or becoming another black hole for the Cypriot tax payer.

Cyprus Tourism - Head in Sand Time?

On January 10th Ryan air announced it would offer 80 flights a week to 14 new destinations, investing in Cyprus nearly 110million euros to bring 600.000 passengers a year and provide jobs for 600 people.
The airline was the first to take advantage of the governments new incentives to boost tourism which included a substantial drop in landing fees.

Described by the head of the CTO as ‘the start of huge potential for Cyprus’-and as ‘a watershed for Cyprus’ -by Ryan Air deputy chief Michael Crawley.

Every thing seemed to be moving in the right direction for both parties, with an agreement which was mutually beneficial, assuring in the main a sustainable and long term relationship between the Cyprus Tourism Organisation and Ryan Air.

Eight months down the line cracks are beginning to show with threats from Ryan air to ‘pull the plug’ on Cyprus and so dissolve their partnership.

The original agreement between the Cyprus Tourism Organisation (CTO) and the airline, as explained by Mr Orountiotis President of the CTO is the same agreement they have struck with other airlines and tour operators.

Now, Ryan Air are threatening to close Larnaca flights due to high fuel costs and are claiming a 100% increase on the promotion fees the CTO is offering.

A somewhat predictable scenario given the standard operating policy of Ryan air and their prime objection of ‘route profitability’.  Ryan Air has played this card many times before and they will continue to do so, for that is their avowed strategy.

Sadly, the history of Tourism in Cyprus reads a bit like Groundhog Day with the powers that be always repeating the same mistakes, mainly in their inability to practice the art of flexibility, to be able to look ahead with regard to the countries need to diversify its source markets, all without creating a structure of total dependency on either tour operators or airlines.

A roll back in time shows us what happened - the demise of Cypriana holidays in the 1990’s followed by the inevitable bankruptcy of Libra holidays, not forgetting our national carrier- Cyprus Airlines -which now looks perilously close to flying off into the sunset never to return.

The Republic of Cyprus has long subsidised our ailing national carrier, as well as promoting an over protectionist routing policy. Cyprus has to now waken up to the fact that routes need to be substituted by an open skies policy which can then turn the country into a profitable destination for every foreign airline.
We would then experience not only healthy competition but it would also allow increased interest to develop new source markets.

The grim facts have to be faced as Cyprus Airways is now one wing tip short of bankruptcy, and an open skies policy will most certainly send it into a fatal nose dive.

This of course would then leave politicians of all political parties brutally exposed, and that’s why the powers that be will not be available for an honest and open debate on this very important if not vital change to our current tourism policy.