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PEOPLE Interview with the Cypriot Ambassador to Israel September 2013 PEOPLE INTERVIEW WITH THE CYPRIOT AMBASSADOR TO ISRAEL EVENT TRIP TO JUDEA & SAMARIA SPECIAL: PHOTOGRAPHY ISSUE- WINNERS AND MORE Editor's Letter 10 Karlibah St., Tel-Aviv Dear Friends, P.O. Box 20344, Tel Aviv 61200, Israel Like every year in the diplomatic community, summer is a time of changes. So, we are 708 Third Avenue, 4th Floor happy to welcome all the new diplomatic staff to Israel. As well, we’d like to wish our New York, NY 10017, U.S.A. veteran diplomats a fruitful year starting straight after the summer break. This issue was composed close to the Jewish High Holidays: Rosh HaShana (the Club Diplomatique de Geneva Jewish New Years), Yom Kippur (The Day of Atonement) and Sukkot (the Feast of P.O. Box 228, Geneva, Switzerland the Tabernacles). So, I am taking this opportunity to wish all of you good health and prosperity during Publisher The Diplomatic Club Ltd. the year 5774 on the Hebrew calendar. More than three thousand years ago, the descendants of the Twelve Tribes of Israel, General Manager Julia Verdel united under the leadership of Saul, David and Solomon, the first three Kings of Israel. These people with their own unique religion joined to become one nation with Contributing Editor David Rhodes a Temple and a capitol in Jerusalem which formed the foundation of what is called the “Old City” today. Writers Barry Rubin We can learn from this that people of different tribes and cultures can unite under a Anthony J. Dennis common purpose and when doing so can accomplish great feats together. Patricia e Hemricourt, Israel Let hope, that lesson will be carry throughout the region. Ira Moskowitz, Israel Bernard Marks, Israel In August, The Diplomatic Club celebrated its 15 year birthday. Christopher Barder, UK As I look back, it is like a 15 year old adolescent, not fully mature, but not an infant Ilan Berman, USA either. We have been over the same stages: the challenges of birth, the pain of teething, the broken voice of puberty and developing our own personality. Now, we can say with some confidence that we have learned a lot (but are still learning) Reporter Neil Sander and have done a lot (but still have much more we want to accomplish) and we are Ksenia Svetlov definitely mature enough to say: Eveline Erfolg David Rhodes The Diplomatic Club in Israel is proud about its activity over the last 15 years and looking forward to what we can accomplish together with our readers in the future. Advertising Tel: 972-3-56.220.61/2 Here, in Israel, at the crossing of three major monotheistic religions and three [email protected] continents was born the idea of people reaching out to another as diplomats to provide links between different countries, their people and their leaders. An open mind and Layout Chana Leah Dror “togetherness” - this has been the philosophy of the Diplomatic Club since 1998. On the occasion of Israel’s 65 Years of Independence and the International Friendship Accounting Roded Rinegold Day the Diplomatic club initiated a photo competition “Israel through Foreign Lenses”. Diplomats from over the world, foreign journalists, representatives of foreign religions Legal Support Mati Simchowitz Law Office and UN staff have been exhibiting their photographs of how they view Israel according to several categories: 1) Family 2) Nature & Environment 3) Daily Life 4) Fine Art 5) Religion. Cover: All of the pictures submitted were appreciated and opened a lot of eyes to how Israel and Israelis are seen by visitors. Photo credit: Natalie Ben Dara The Diplomatic Club is particularly proud of the participation of the young Chinese movie production of "Old Cinderella" photographers Charlotte Veldkamp and Luka Tomic and hope that their participation Article on p. 27 and other young photographers becomes a tradition. We hope, this exciting experience will be The Diplomatic Club Magazine something that you will never forget – a present Printed Monthly for a lifetime! Shana Tova/ a Sweet New Years. Tel: 972-3-562.20.61/2 Sincerely, Fax: 972-3-562.02.12 [email protected] Julia Verdel www.diplomacy-club.com Publisher And the Editorial Team People A GOOD NEIGHBOR SEES BRIGHTER DAYS AHEAD: AN INTERVIEW OF AMBASSADOR DIMITRIS HATZIARGYROU OF CYPRUS By David Rhodes Cyprus has been in the international Greek debt was unsustainable the decision that affect Cyprus as center for offshore news recently for its economic challenges to proceed with a PSI (haircut) of the banking center in the future? and its dramatic bailout by international Greek debt caused massive losses in the organizations. Looking back, how could neighborhood of 4.5 billion euros, a quarter Actually this is the first case in the have it been avoided on Cyprus’s part and of Cyprus’ GNP, to the Cypriot banks Eurozone of a case of “bail in”. This means what steps is Cyprus taking to make sure which had earlier purchased Greek bonds that to recapitalize the banks which is it doesn’t happen again? at very attractive rates. As the banks had a necessary condition for any economy to jump start, these huge amounts were The problem faced by Cyprus is something to be bailed out by the state, the national decided by the Eurogroup decision of 15 that other countries have faced over the debt of Cyprus, which up until then was March and subsequently of the following years. It concerns primarily irresponsible manageable, reached unsustainable levels. decision of 25 March, that they would policies of expansion pursued by the two Then the downgrades of the country’s have to be raised by Cyprus, something major banks of our country which landed credit worthiness begun which meant that would make the debt of the state them in financial trouble. As a result of that we could no longer turn to the unsustainable pushing the country into their behavior Cyprus faced successive international markets to refinance our default. That is how the decision was taken downgrades by the major credit rating debt (as all countries do). to proceed with the haircut of deposits. houses and as a result of that for the last As part of an 18 billion Euro bailout Cyprus thus became a guinea pig on how two years we could not secure refinancing Cyprus is expected to come up with banks that run into trouble in the future of the national debt. This was the reason about 7 billion Euro of its own. Is that will be dealt with. That is, other than why we had to apply to the European realistic? Much of it is targeting large the 100,000 euros of depositors, which Stability Mechanism for a bailout. depositors in your banks. How much is are insured, the banks themselves, their How much was what happened to Cyprus that from foreign depositors and how will stock holders, the holders of their bonds self-afflicted and how much part of being part of the European Union? Did the collapse of Greek economy play a crucial role in dragging down the Cypriot economy? The over-expansion of the banks cannot be said to be necessarily a bad development. Unfortunately in the case of Cyprus, this over-expansion was followed by irresponsible policies by the banks which created a lot of problems. The fact that Cyprus was a member of the Eurozone did not of itself cause the problems. The lack of proper oversight on the other hand did its part in bringing the banks down and led the country, which had to bail them out,into dire financial straits. The problems of the Cyprus banks begun Ambassador Dimitris Hatziargyrou when the Greek economy collapsed and had to apply for a bailout. And as the 4 The Diplomatic Club Magazine People and the rest of the depositors will have to would expect, for the provision of the 10 included raising taxes, substantial cutbacks contribute for the recapitalization of the billion euro bailout, aim at achieving fiscal in salaries and reduction of spending. The banks. A considerable amount of these consolidation so that the country can face result of this was a reduction in economic deposits come from foreign depositors the immediate challenges and move ahead activity with all that that entails. One although Cypriots (and by that I mean, out of this crisis. As in previous bailouts particular negative development was an individuals as well as institutions) were in Eurozone countries (and not only) the increase in unemployment, particularly the bigger losers. This development will exit from the crisis requires policies that among the young. Our GNP is expected certainly affect Cyprus as an international reduce expenses and increase government to shrink for the next couple of years which banking center but it does not mean that revenues. This, in almost all cases, requires will impact negatively on many, mostly it will cease to exist. The international sacrifices by everyone. small and medium size companies. And banking sector will shrink and we hope this will increase unemployment. A lot of The initial reaction by the average Cypriot with proper oversight it will be able to people and real estate companies are facing at the decision of 15 March was one of bounce back in due time. There are already problems paying their mortgages but we shock and apprehension. Cypriots did not many companies with operations in Cyprus have not yet seen massive foreclosures. The go out into the street to protest against which have announced that they will be government is taking measures to avoid the government. There was, naturally, staying in Cyprus and continue to benefit this scenario which we have witnessed in from its low corporate tax rate and high disappointment at the way that Cyprus other countries by, for example, reaching levels of professional services.
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