By a staff reporter
Nobody could have predicted that a discussion, which took place in December 2008, at a meeting of the House of Representatives’ European Affairs Committee, would have sparked a chain of events that would ultimately lead to the closure of the European Institute of Cyprus (EIC) in 2011.
The institute, at its peak in 2007, was widely recognised as a leading institution at EU level and secured funding for Cypriot public organisations and the wider community to the tune of tens of millions of euros. Since its closure, Cyprus has been losing at least €10 million a year in EU funds.
The man at the centre of the storm surrounding the EIC, its then acting director Dr Neophytos Chrysochos, had been accused by the general secretary of AKEL, Andros Kyprianou of numerous alleged illegalities during his tenure. Chrysochos rejected the allegations as “unfounded and “nonsense” and was eventually vindicated as neither the state nor the EIC were able to identify any wrongdoing, to support the allegations.
The EIC was first established in 1996 as an independent academic institute with the aim of promoting EU ideas and principles in the years running up to Cyprus joining the EU in 2004. The cost of the EIC’s funding was then shared between the Republic of Cyprus and the European Commission. Following EU accession in 2004 and a decision by the Council of Ministers, the Cyprus government opted to use the institute as a support service for government departments as well as other intermediary institutions seeking to apply for European funding. The EIC offered support by preparing presentations, making project proposals and drafting the applications for EU funding.
“With hard work, planning and strategic vision combined with our formidable weapons of a broad knowledge on EU affairs, we managed to secure €42m from horizontal EU programmes for various organisations within a period of 17 months, with no commission and no financial benefit to the institute,” Chrysochos said in a recent interview. “It was one of the most successful institutes in Europe with a 95 per cent success rate in its applications, when the average was only around 17 per cent.”
Chrysochos explained that during 2008, the success rate was all the more remarkable as there was always competition from other member-states for EU funding. In turn, the EIC’s success led to its growth, which increased from five members of staff to 20, working with a budget of €800,000 and real prospects of becoming self-financed by 2010.
None of this information was conveyed to the House European Affairs Committee, during their December 3, 2008 meeting which had been called to discuss the future direction and any current or potential problems of the EIC.
Journalists covered the discussion which predominantly focused on allegations that Chrysochos was not complying with the correct procedures of the EIC by holding the post of acting director, for which, according to the auditor general’s report, there was no provision in the institute’s charter. The report argued that all decisions taken since 2003 by the EIC were illegal as they had not been sanctioned by the Board of Regents as stipulated by the EIC charter.
But the Board of Regents, on which the European Commission had a representative, had not convened since 2003. And in many ways this was understandable given that from May 2004 Cyprus had been an EU member and had undertaken the funding of the Institute. In addition, Chrysochos, who was blamed for not convening the Board of Regents, only became head of the institute towards the end of 2004.
The accusation was wrong because it was not the obligation of the Director of EIC to convene the Board of Regents. The foreign minister from 2003 to 2006, George Iacovou, explained in a very clear way at the House Committee meeting that the institute had been run de facto by the foreign ministry. He told the committee the following:
“In 2001 there was a meeting (Board of Regents) but with great difficulty we managed to get a quorum and there was no attempt to convene (the Board of Regents) even in the year 2002 or the part of 2003 that Mr [Ioannis] Kasoulides was minister of foreign affairs. I was told that basically, because of these difficulties, the institute was supervised by the foreign minister.”
In fact the phrase used by Iacovou was “direct rule” by the foreign minister.
Chrysochos agreed with Iacovou that the Board of Regents had not met since 2003 and that under the circumstances the government decided to put the EIC under the authority of the foreign minister. However, following the European Affairs Committee meeting, various newspaper reports claimed that Chrysochos had been taking all EIC decisions.
In the meantime, constitutional amendments to the EIC’s charter were approved by the Council of Ministers. Based on the new constitutional provisions, the Council of Ministers appointed a board of directors which consisted of public officials, with the permanent secretary of the foreign ministry as the ex-officio president.
Towards the end of 2009 the EIC’s board of directors appointed the new director of the EIC. Following this new appointment the EIC reverted back to being 100 per cent financed by the state. But without the support of EU funds, the government decided to shut down the institute, which had been 60 per cent self-financed during Chrysochos’ tenure.
“This is always the case when you have to deal with inadequate politicians and inept people appointed to run public organisations,” commented Chrysochos.
The demise of the EIC began in the wake of these allegations and the negative press. Chrysochos, aware of the damage that was already done, “did not want to be part of an organisation which would be unable to fulfil its mission” and eventually resigned from the EIC in 2010.
Chrysochos has since set up his own company (R.D.I ZeusEuropa Ltd) focusing on research, development and innovation which has a wide impact at the European level.
He is, understandably, disappointed at the way in which the EIC was treated, especially given all the good work it had done for Cyprus.
“It was an institute which benefited public organisations and society in general, and I feel the political attitudes towards myself may well discourage others from taking responsibility, showing initiative, working hard and trying to achieve goals,” he said.
“Ultimately,” he concluded, “it is the country and its people that lose out. I regret and feel sorry for our country that has always suffered from the acts of inadequate politicians.”