Cyprus PIO: Turkish Cypriot Press and Other Media, 00-10-30
From: The Republic of Cyprus Press and Information Office Server at <http://www.pio.gov.cy/>
TURKISH CYPRIOT PRESS AND OTHER MEDIA
No. 208/00 -- 28-29-30.10.00
[A] NEWS ITEMS
 Turkish Cypriots conduct assessment with Turkish delegation on even of
Illegal Bayrak Radio 1 (10:30 hours, 28.10.00) reports that the delegations
of Turkey and the pseudostate last Saturday held an assessment meeting on
the eve of the fifth round Cyprus proximity talks. Attending the meeting,
under the chairmanship of Rauf Denktash, were Tahsin Ertugruloglu,
``foreign affairs and defense minister''; Turkish envoy Ertugrul Apakan;
Faruk Logoglu, Turkish Foreign Ministry under secretary, as well as other
In a statement before the meeting, Denktash pointed out that the two sides
have not yet reached a common point. Denktash stated that the Turkish
Cypriot side is acting in full unity of views with Turkey both in internal
matters and in the ``national cause''. Denktash claimed that President
Glafcos Clerides, who said in a statement to CNN a few days ago that the
Greek Cypriots accept the Turkish Cypriots equality, immediately afterward
revealed the kind of equality he had in mind by saying that the Turkish
Cypriot side cannot block Cyprus/ accession to the EU. Alleging that the
Turkish Cypriot side has the right to political equality and sovereignty as
well as to close to 33 percent of the territories, Denktash said that the
Greek Cypriots believe that the whole of Cyprus belongs to them.
Denktash claimed that as far as the Greek Cypriots are concerned, the
Titina Loizidou case eliminated the global struggle with regard to the
property exchange issue. In this context, Denktash said, the Greek Cypriots
are claiming that they have the right to get their property back. Denktash
noted: ``This has enlightened our refugees, and it will continue to do so.
This has revealed the real intention behind the chants of peace''. Denktash
added: ``No agreement has emerged on anything yet. The Secretary General
explained what this agreement can be: Two separate units with equal status
will eventually emerge. The Secretary General outlined a very clear
framework: One unit will not represent the other, and neither will be able
to speak on behalf of the other. The Greek Cypriots rejected this
Logoglu, in his statement, declared that his main aim in arriving in Cyprus
was to conduct a last assessment of the situation on the eve of the
proximity talks and learn the views in this regard. Logoglu stated that the
entire Turkish people stand by the Turkish Cypriots, adding that Turkey is
aware of the great efforts exerted by the Turkish Cypriots to attain the
expected goal in the talks. Wishing Denktash success in the upcoming talks,
Logoglu said that he expects the Greek Cypriot side to exhibit sincerity
during the talks.
Referring to the EU issue, Logoglu said that Turkey believes that Cyprus
cannot join the EU before a solution. ``EU membership can be an option
after a solution and with the consent and separate approval of the two
peoples in Cyprus,'' Logoglu said. Even then, he added, Turkey/s interests
vis-a-vis the EU must be guaranteed. Logoglu said that the current state of
affairs is far from satisfying that.
 Denktash meets de Soto Anatolia Agency (12:26 hours, 27.10.00) reports
that Turkish Cypriot leader
Rauf Denktash said on Friday that Alvaro de Soto, the Special
Representative of United Nations Secretary General Kofi Annan to Cyprus,
had realized the difficulties in Cyprus.
Addressing journalists following his meeting with De Soto, Denktash said,
we held the last meeting with De Soto prior to the fifth round of proximity
talks which are due to start in Geneva, Switzerland, on November 1. He
explained his impressions about his one-week contacts on the island''. When
asked whether or not De Soto believed that ``difficulties stemming from the
Greek Cypriot side'' would be solved in Geneva, Denktash said, ``Do Soto
may believe that. What is important is whether we believe that these
difficulties will be solved. We have not seen a positive approach from the
Greek Cypriot side so far''.
 Denktash does not see ``slightest chance of agreement'' with Greek
Anatolia Agency (18:32 hours, 28.10.00) reports that Turkish Cypriot leader
Rauf Denktash has said that the Turkish Cypriots are going to the fifth
round Cyprus proximity talks slated to begin in Geneva on 1 November on the
basis of a ``confederation'', while the Greek Cypriot House of
Representatives decided that a ``federation is the last concession''.
Pointing out that by adopting such a decision the Greek Cypriots aim at
forcing the Turkish Cypriot side to discuss the option of federation,
Denktash said that the Turkish Cypriots proposed a confederation after
having reached the conclusion at the end of years of negotiations that the
Greek Cypriots do not want a federation.
Denktash noted that a solution can also be discussed without giving it a
In a lecture he delivered at the Brothers Hearth organization Saturday
night, Denktash said that the dialogue will be conducted under equal
conditions, adding that before trusting the Turkish Cypriots, the Greek
Cypriots must first inspire confidence in the Turkish Cypriots.
Denktash explained that he is going to the Geneva talks more prepared than
before, and said that he will remain in Geneva until 10 November, from
there he will proceed to Abu Dhabi for the Islamic Conference, and he will
return to Cyprus on 14 November.
Announcing that the next round of talks are scheduled for January, Denktash
said that he proposed to Alvaro de Soto, UN Secretary General/s special
envoy for Cyprus, to hold the future talks in Cyprus.
Denktash stated: ``It is no longer right to cross the ocean so often and
incur to much expenses. There are no clashes in Cyprus. Therefore, we can
easily hold these talks in Cyprus. I asked him to transfer the talks to
Cyprus. There is no reason for us to travel abroad so frequently. We will
insist on this. If they are reasonable, they will accept''.
Recalling that for years he has been attending talks, Denktash claimed that
he never observed the willingness to reconcile in the Greek Cypriots. He
alleged: ``If I had detected in the Greek Cypriots the slightest chance of
reaching a conciliation with us, of reaching an agreement without
undermining our security, our equality, and our rights over Cyprus, I would
have concluded an agreement with them long ago''.
Denktash also said that any agreement that fails to guarantee the Turkish
Cypriots/ security would lead to a confrontation in Cyprus similar to that
between Israel and the Palestinians.
Noting that the issue of property is important in the solution of the
Cyprus problem, Denktash said that this matter can be resolved through
exchange and compensation, he managed to convince the United Nations of
this, but the Greek Cypriot leaders do not accept it.
Denktash declared that the Turkish Cypriots want an agreement that
recognizes the equality and sovereignty of the Turkish Cypriots, that
accepts the existence of the Turkish state, that preserves Turkey/s rights
over Cyprus, and that does not eliminated the Turkish-Greek balance.
 Debate on pseudostate/s economy Illegal BRTK (18:30 hours, 20.10.00)
carries a 180-min live discussion on
the Turkish Cypriot economic stability program in the studio on the ``3rd
Dimension'' program with Bulent Kanol, ``undersecretary'' at the ``Prime
Ministry'', Mehmet Burhan Huralp, ``undersecretary'' at the ``Economy and
Finance Ministry'', Mehmet Turgud ``undersecretary'' at the ``Economy and
Finance Ministry'', and Isilay Yilmaz, ``undersecretary'' at the ``National
Education and Culture Ministry'', all involved in the preparation of the
Opening the debate, moderator Ozer Kanli asks the panellists why the need
was felt to draft the new economic stability program.
Speaking first, Bulent Kanol says that despite chronic balance of payments
deficit over the last 10-15 years there was no serious fiscal crisis until
1999 to warrant the introduction of an austerity program. To make his point,
he notes that over these years the exports stood at a steady $50 million
and imports at $400 million annually, with the $350 million in foreign
trade deficit being partly covered by tourism revenues of approximately
$190-200 million. Another approximately $100 million revenue was collected
from students studying in the north. That left an overall budget deficit of
$50 million per year.
Bulent Kanol explains that the banking crisis arouse at the close of 1999
and early 2000, when the public finances were already strained due to the
TL (Turkish Lira) 3.5 trillion monthly deficit, which up until the
introduction of economic reforms in Turkey used to be covered by Turkey.
Those reforms in Turkey had a lightning effect on the economy in the
pseudostate, as a result of which the already unsound banking sector
buckled under pressure, leading to the collapse of six banks. That in turn
generated a sever fiscal crisis on top of the chronic economic crisis which
in itself had not been causing much of a problem to the community.
Bulent Kanol says after Turkish State Minister for Treasury Recep Onal
visited the pseudostate to sound out the views of different sectors, the
Turkish officials drafted their own measures, discussed them with the
Turkish Cypriot bureaucrats, and eventually came up with an economic
package and told the Turkish Cypriots: ``You have to adopt these measures
if you want to really implement a new program and want us to finance it,
otherwise our credits to you will be wasted''. Kano says that the package
was again debated in the pseudostate, 14-point objections were conveyed to
Turkey, and after renewed debates it was given the present shape.
Bulet Kano discloses that behind this package lay the Turkish officials/
belief that the ``TRNC'' economy has failed to grow primarily because of
structural problems, inflation, and external obstacles; that the public
finances are overstretched; that the public deficit has become chronic and
moreover it is steadily growing; that the overwhelming presence of the
public sector in the economy and its absorption of the funds has been
hindering the development of the private sector; and that a strategic
partnership should be established with Turkey and the formal integration
with the EU should be initiated in order to eliminate the heavy burden on
the economy resulting from the embargo''.
Kanol says the Turkish officials also identified specific problems, namely,
``Heavy financial burden caused by social security system, bloated public
service, ineffectual public spending, wasteful agricultural subventions,
defective banking sector regulations, and lack of control and monitoring of
Bulent Kanol says they, as the Turkish Cypriot technical delegation
conducting the talks with Turkish officials, shared the above diagnosis on
the whole, but some differences arose when discussing the remedies and
these discussions lead to the modification of some of the articles in the
Speaking next, Mehmet Burahn Huralp points out that the main problem that
the package wants to solve is the ``public deficit''.
As an example, he says that in the month of September 2000 the revenue
levied locally was TL 14.5 trillion. It came from taxes, tariffs, and
service duties. As additional TL 3.5 trillion was drawn from the ``Price
Stability Fund''. As such, the overall monthly revenues amount to around TL
18 trillion. In comparison, TL 10.5 trillion was spend on personnel, such
as wages, salaries and overtimes; TL 11 trillion was spent for social
security-the bulk of which went to pension salaries and contribution to the
social security institutions, assistance to the needy and martyrs/
families; TL 1 trillion was earmarked for ``government/s'' current
expenditures, such as payments for repairs, fuels, telephones, medical
supply to hospitals; and TL 500 billion was used from the local resources
for investments. The overall expenses thus amount to around TL 23 trillion.
That left the pseudostate with a TL 5 trillion monthly deficit. Considering
that under a ``protocol'' signed with Turkey in 1997 Turkey provides $3
million every month-that approximately makes TL 2 trillion-as a
contribution to the pension salaries, the grand total monthly deficit in
the pseudostate stood at TL 3 trillion in September.
And this figure only shows the deficit on outlays included in the
``budget''. Yet there are many other public expenses not shown in the
``budget'', such as the drought compensation to the farmers, export
incentive funds, and credits opened in the private sector and other
``state'' agencies, he says.
Mehmet Burhan adds that the second structural defect results from the so-
called ``advance payment'' system introduced since 1990. This means that on
the first day of each month the ``government'' has to find at least TL 18-
19 trillion to pay the salaries and meet other expenses before the revenues
for them are actually levied. He says the ``government'' then tries to
cover the end-of-month TL 3 trillion deficit by borrowing from the
``Central Bank'', with the result that the ``Treasury'' has accrued $180
million debt with the ``Central Bank'' since 1994. This is only the debt
owed to the ``Central Bank'' by the ``state''.
Burhan mentions 1990,1994, 1997, and 2000 as the years when deficit
spending crept into the economy. He says that the pre-1990 balanced budget
was undermined in 1990 with the Gulf War and the collapse of (businessman
Asil Nadir/s firm) Poly Peck, and most importantly in 1994 with the
financial crisis in Turkey which manifested itself in the pseudosate in the
form of 215 percent inflation. It was from 1994 onwards that the
pseudostate began having a ``budget deficit'' and accumulated debt to cover
it. And with reduction of Turkish assistance due to the economic crisis
there, as of 1994-1995 the pseudostate began to borrow from the ``Central
Bank'' to pay off the salaries. That is how the public finances were upset.
The $250 million credit opened by Turkey in 1997 also could not revive the
economy because the money did not make into the market, instead was sucked
up by a fiscally disorderly and glowingly bloated ``government''. The
``government'' planned but never took decisions to scale down public
spending and bring it under discipline.
Mehmet Burhan wonders if it is possible to maintain an economy where the
Turkish aid is only used for covering ``budget deficit'', where no
investments are made or public services rendered, no funds could be
allocated to the economy, and where all the funds of the ``Central Bank''
has been depleted.
Burhan concludes by saying that the ``state'' must start economizing and
convince the people that it has stopped the profligate use of funds if this
program is to succeed.
Third speaker Mehmed Turgud starts off by saying that public reaction to
change is normal, implying at the same time that he disapproves of the
opposition for calling the austerity program as ``package of destruction''
He declares that the banks should be encouraged to reopen the credit taps.
Indicating that the program calls for the servicing of the $400 million
public debt within the next three years, Turgud says this money would
accumulate in the banks, which would want to give it out as credits. And
considering that the banks will no more take this money to Turkey to make
profits in high-interest repo transactions, they will be forced to give out
these money in the form of credits, even by lowering lending rates.
As a further measures to ensure liquidity, Turgud points out that the
package also prohibits the ``state'' from taking bank loans or even borrow
from the ``Central Bank'' until it brings its outstanding debt there down
to a certain level. That would create an abundance of liquidity as of next
year. That, in turn, would ease the credit markets and bring the interest
Turgud also notes that another reason for the depletion of the ``Treasury''
was the right to pension after a 10-year service. He says no one back in
the 1970/s, when this right was introduced, ever calculated the cost of
sustaining for 50 years a person that becomes a pensioner at the age of 28.
This is another reason why reforming the public finances has gained such an
Speaking last, Isilay Yilmaz says the current package was the outcome of a
long-standing search to reform the public administration and finances.
She too argues that over the years there has actually been no substantial
change in main economic indicators, adding that currently local budget
revenues comprise almost 28 percent of the ``GDP'', and the current
expenditures-personnel payments, other public expenditures, minus the
transfers to social security institutions and pension fund-stand now at 18
percent of the ``GDP''. What have really risen over the years and strained
the public finances are the transfers-most of which is eaten by pension
salaries and payments to the social security institutions. These transfers
rose from 7.5 percent in 1977 to 20 percent in 2000.
She thus notes that the personnel expenditure and number of public servants
have remained almost the same over the years, what has really increased is
the number of pensioners. In other words, the number of employees has
basically remained between 10,000-11,000, but the number of pensioners has
risen sharply to 10,500. Noting that the ``government'' disburses an
aggregate of 25,000-30,000 paycheques and that previously 20,000 of these
paycheques were taxed but now only 11,000 of them are taxed, she says this
is what is causing the bottleneck in the public sector. Seeing that it can
no more pay 30,000 paycheques and at the same time withholding taxes levied
from only 10,000 public employees, the ``government'' is forced to increase
direct and indirect taxes in the market. But because even the taxes levied
thus have failed to keep pace with personnel expenditure a budget deficit
has steadily grown. The pseudostate has thus been forced to borrow money
from private banks, the ``Central Bank'', other funds, causing a money
crunch in the private sector. Because the ``government'' pays high interest
on these loans by simply emitting money it contributes to the rise in
inflation imported from Turkey.
The solution, she adds, is to release these money resources to the private
sector. Another way is to reform the social security system and base it on
actuarial system. She explains that the ``government'' at present cannot
make any proper actuarial calculations or financial planning because a
``public servant'' can retire just anytime he/she fancies once the minimum
ten years service requirement is completed. The ``government'' therefore,
is in no position to know beforehand how much funds it needs for pension
payments for a given year.
 41 organizations file complaint against ``government'' for betraying
According to illegal Bayrak Radio 1 (10:30 hours, 27.10.00), a total of 41
organizations supported by the Republican Turkish Party (CTP) and the
Patriotic Unity Movement (YBH) went to the ``Office of the Chief
Prosecutor'' and filed a complaint against Rauf Denktash and the
``government members'' on grounds that they betrayed the people with the
socioeconomic package that is being implemented. ``Chief Prosecutor'' Akin
Sait, in a statement he made prior to the complaint filed by the
organizations, said that in the light of the work they have conducted,
these organizations have certain expectations from the ``Office of the
Chief Prosecutor''. He added that ``his office, as a judicial department,
will not hesitate to exercise the authorities granted to it by the
Constitution and the laws after having listened to the expectations of the
organizations in question''.
Ahmet Barcin, leader of the Turkish Cypriot Secondary School Teachers Union,
in a statement he made on behalf of all the organizations, described as an
economic destruction package the economic stability program being
implemented by Denktash and the National Unity Party (UBP)-Communal
Liberation Party, (TKP) ``government''. He charged that the package in
question will abolish their gained rights. Charging that the implementation
of the package will be tantamount to betraying the people, Barcin noted
that this behaviour in contravention of the ``Constitution'' and the
``laws'' is tantamount to rescinding the right of the Turkish Cypriots to
self-administration. Pointing out that the package in question is aimed at
destroying the Turkish Cypriot community, Barcin added that the package, at
the same time, aims at violating constitutional and democratic rights.
After receiving the text, Sait said that the socioeconomic package cannot
be implemented without a legal arrangement, adding that the 41
organizations should not be distressed. Noting that his duty is to
implement the ``Constitution'' and the ``laws'', Sait said that the package,
which the ``government'' has put into effect, cannot be implemented on its
own. Noting that it will soon be clarified whether gained rights can be
revoked through legal arrangements, Sait added that, however, at that stage
the views of his ``office'' will be requested on the ``bills'' in question.
He continued: ``We have not approved any issue that violates the
Constitution. Even if a bill is approved by the Assembly, if we find that
it violates the Constitution, then the issue is referred to the
Constitutional Court. The final word rests with the Constituitonal Court''.
 One more DP ``deputy'' resigns from party According to illegal Bayrak
Radio 1 (10:30 hours, 27.10.00) Democratic Party
(DP) ``deputy'' Kenan Akin has resigned from his party. In a statement Akin
said that he will continue his work as an independent ``deputy''. With
Akin/s resignation the number of DP ``seats'' in the ``assembly'' has been
 The current distribution of ``seats'' is as follows: National Unity
Party has 23 ``seats'', the Communal Liberation Party seven, the Republican
People/s Party six, and independents three.
 Eroglu says Clinton is trying to solve already resolved problem
According to illegal Bayrak Radio 1 (6:00 hours, 30.10.00), so-called prime
minister Dervis Eroglu has said that the road to peace passes through the
acknowledgement of the existing ``realities'' in Cyprus. He was addressing
the Ataturkist Thought Association the other night.
Stressing that the Turkish Cypriots are determined to make the pseudostate
live forever, Eroglu said that there were many difficulties in the
establishment of the ``TRNC'', that freedom has a price, and that the
Turkish Cypriots paid this price.
On the Cyprus question, Eroglu recalled President Clinton/s remarks that
Cyprus is an issue he has not been able to solve. Eroglu said: ``The fact
that the United States is so interested in solving the Cyprus problem while
there are so many problems awaiting solutions in the world is not merely
because it wants to solve a problem. Actually, it is trying to solve a
problem that has already been solved. That is why it cannot get any
Eroglu claimed the Cyprus problem has been solved, adding: ``What is being
sought in Cyprus is peace and an agreement that will enable the two
neighbouring peoples to live peacefully''.
He emphasized that nothing will be gained by ``coveting'' so-called TRNC
territory or by trying to eliminate the ``TRNC''. He said: ``What we are
dwelling on today is the need to further deepen the relations between the
TRNC and its motherland, to explain the reality of the TRNC to the world in
cooperation with the motherland, and to continue to work in order to have
our just cause confirmed at the negotiating table.''
From the Republic of Cyprus Press and Information Office (PIO) Server at http://www.pio.gov.cy/