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Our View: Bailout probe should focus on political responsibility

WHEN PRESIDENT Anastasiades announced the establishment of an investigative committee with the brief to establish the causes of the economy’s collapse and identify the individuals that were responsible, his decision was praised by most people.

The general feeling was that, for too long, political and administrative decisions that caused great harm to the country had gone unpunished and it was high time those responsible were made to pay. The economy had collapsed, the banking sector was on life-support and a bailout agreement with devastating consequences had been imposed on the country. Some people must have been to blame for this disaster and the investigative committee, it was hoped, would identify them, irrespective of the complexity of its mission.

Three respected retired judges were appointed on the committee, but within a few weeks two of them had resigned, one citing health reasons and another conflict of interest. Once the investigation started work there were also resignations of committee support staff that were providing the judges with information and advice. Despite these setbacks, the committee proceeded to invite former ministers of the previous government as well as senior officials before it. However it had been made clear from the start that the committee was an investigative body and its findings would not be legally binding. Its findings would go to the attorney-general who would decide whether to prosecute.

On Tuesday the committee curtailed the scope of its investigation, its chairman announcing that it would not look into matters that were the subject of court proceedings. This meant that the goings-on at the two banks, Laiki and Cyprus, would not be investigated as they are both involved in a host of legal proceedings. This was viewed as another indication of the committee’s ineffectiveness about which there was much talk, long before the latest decision by the panel. It was felt that the toothless committee was now using legalistic arguments in order to further limit the scope of its investigation.

But did anyone really expect the committee to be able to ever get to the bottom of what had happened at the banks? This is a job for experts, with a deep understanding and knowledge of how banks operate. International consultancy firm, Alvarez and Marsal, which had the necessary expertise, had been commissioned to conduct an investigation by the Central Bank, but its findings were incomplete because it had been asked not to investigate Laiki, on the grounds that legal action was being taken against the bank’s top executive. Perhaps, the firm should be brought back in to finish this complex job.

As for the investigative committee, it should focus on establishing the political responsibilities for the economic disaster. Had there been negligence on the part of politicians and officials? Had they taken decisions they knew would cause harm to the country? Had they ignored warnings and refused to take action because they feared the political cost? If the committee provides convincing answers to these questions it would have done its job and silenced all those claiming it was toothless and ineffective.

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