FARMERS in their tractors blocked streets in central Nicosia on Tuesday in order to push their demand that the shares of Co-operative Central Bank (CCB), 99 per cent of which are held by the state, be returned to the members of the co-ops. It is the type of absurd demand that we have become accustomed to in Cyprus, not very different from the bank bondholders’ insisting that the taxpayer should compensate them for their losses.
The truth is that the former members of the co-ops have no legitimate claim on the shares of the CCB. The co-ops, which were dens of corruption and mismanagement for decades, were saved from bankruptcy by the state through the injection of €1.7 billion over the last three years. The money was provided by the international lenders and will be paid back by the Cypriot taxpayer and not by the members of the co-ops, who lost any claim after the bail-out. Under the circumstances every taxpayer has as much claim to shares of the CCB as the farmers and other former members of co-ops.
The farmers were also protesting about the sale of some of the CCB’s subsidiaries, insisting that ownership should be returned to farmers’ organisations. They have no legitimate claim on these which are assets of the CCB that can dispose of them as its board sees fit. Why would a hard-up bank with the highest percentage of NPLs give away assets which it could sell? Farming organisations know very well that they have no case, but they also know that presidential elections are only 10 months away and the government could be pressured into handing over CCB shares to them for nothing.
Finance minister Harris Georgiades is partly to blame because a few months ago he said the government was considering handing out shares in the CCB, which would be listed on Cyprus Stock Exchange, to people who lost money in the banking crisis as well as to CCB customers and workers. It is a scandalous idea that has no moral or legal justification, particularly in the case of customers and employees of the co-ops, unless the government is planning on setting up a socialist republic. As for the people who lost money in the banking crisis, how many of them would be eligible for shares?
Given the government’s populist thinking, the farmers’ demands, however unreasonable, are perfectly understandable. If the government is planning to give out CCB shares why should farmers not qualify as the beneficiaries of this generosity? Under the circumstances their demand might not be so absurd.