Cyprus Mail
CM Regular Columnist Opinion

The history of Laiki exemplifies political culpability

By Loucas Charalambous

MANY views are heard every day regarding the country’s bankruptcy, views that are bound to rile any sensible citizen. There is nothing more provocative than hearing all those who played a very big part in the bringing about the economic disaster, taking the moral high ground and supposedly searching elsewhere for those to blame for our current woes.

It is infuriating, for instance, watching politicians, daily, on television screens demanding the exemplary punishment of the guilty parties. The situation is both tragic and comical at the same time.

From dawn till late at night, on radio and television, we hear and see our politicians – the organisers of our decades-long party with borrowed money – explaining the reasons for the economy’s collapse and heaping all blame on the bankers. They believe that by so doing they will absolve themselves of responsibility for the state’s bankruptcy.

Even the members of AKEL, the party which was in government and led us to the economic meltdown, appear on TV and radio to blame others. And there are no journalists to ask them about the crime of doubling the public debt in the space of five years, from €8.3bn to €16bn. But if we had real media companies and real journalists we would not be in the mess we are in today.

As there is a lot of talk about the responsibility of the bankers, it should be noted that, without the co-operation and backing of the politicians, they would not have been capable of destroying the banks.

The example of Laiki Bank perfectly illustrates my point. Laiki would never have gone bankrupt if the late Tassos Papadopoulos, former Central Bank Governor Afxentis Afxentiou and the bank’s former executive chairman Kikis Lazarides had not got it involved in the sordid laundering of Yugoslav funds. They were helping then president, Slobodan Milosevic, violate the sanctions imposed by the UN Security Council on the former Yugoslavia.

In 2006, HSBC, which was the biggest shareholder in Laiki, raised the issue of the bank’s involvement in the sanctions-busting scandal with the top management and demanded explanations. When it was not given satisfactory explanations it wanted to increase its shareholding and have two representatives sitting on the bank’s board so it could exercise more effective control.

The then executive chairman would not hear of this, as he was deeply involved in the Milosevic affair. HSBC tried to get to people elected to the Laiki board, but Lazarides and his friends managed to prevent this from happening. As a result, HSBC decided to sell its shareholding in Laiki.

Lazarides was happy to look for buyers and be rid of the meddling HSBC. He brought in the Greek banker Andreas Vgenopoulos and handed him control of Laiki. The irony was that a few months after taking control Vgenopoulos got rid of Lazarides, citing as one of the reasons for that decision, the fact that he had got Laiki mixed up in the Milosevic scandal.

It may seem simplistic, but only one conclusion could be drawn from all this – if Papadopoulos, Lazarides and Afxentiou had not involved the bank in the laundering of the Milosevic millions, HSBC would not have sold its shareholding and Vgenopoulos would not have taken control. Consequently, Laiki would not have been bankrupted. It is that simple.

It is worth noting that Lazarides has not appeared once on television or radio and has not made any statement over the last few months to tell us who was to blame for the bankruptcy of the banks. He proved smarter than Afxentiou who was a regular of the TV studio panels in helping the search for the guilty parties. Papadopoulos has gone but his son Nicholas is regular guest of the media, apportioning blame left, right and centre.

Is it possible for this country to move forward when, in effect, it is still being run by those who destroyed it? Is there any chance of salvation when those chiefly responsible for our bankruptcy – the politicians – are on TV and radio from morning till night, supposedly looking for the culprits?

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