Cyprus Mail

Draghi at centre of new state-AKEL spat

By George Psyllides

PRESIDENT Nicos Anastasiades’ meeting with ECB chief Mario Draghi yesterday became the object of yet another spat between the government and the opposition, as views concerning its outcome differed.

The government said main opposition AKEL was guided by petty-politics and charged that it put the interests of the party above those of Cyprus.

Government spokesman Christos Stylanides accused the communist party, which lost power around four months ago, of trying to shake off their responsibilities.

“Unfortunately some people insist on putting their party above all else,” Stylianides said in a written statement.

Anastasiades met Draghi in Frankfurt on Wednesday to discuss the problems of the banking sector following the EU’s decision to bailout Cyprus.

The two sides agreed that bringing Bank of Cyprus (BoC) out of administration was the priority in the period ahead, and they pledged to continue discussions.

Discussions will continue after an asset valuation was completed in the second half of this month.

Finance Minister Harris Georgiades said all matters will be examined after the process was finished.

AKEL, which is widely held responsible for the island’s economic debacle, suggested that none of the government’s objectives had been achieved during the meeting with the ECB.

“The conclusion that can be drawn from the official announcements is that further cooperation will be sought between the government and the ECB with the aim of implementing the terms of the (bailout) memorandum,” AKEL spokesman Giorgos Loukaides said.

Loukaides said the government had engaged in public relations stunts for domestic consumption.

The AKEL spokesman accused the administration of backtracking in relation with their announcement of bringing a lawsuit against Draghi over the €9.0 billion in emergency liquidity granted to Laiki Bank.

The government spokesman said it was a shame that while the country was going through its most difficult phase since the 1974 Turkish invasion certain people forgot that Cyprus was above all else and not the party.

In a letter to European leaders in early June, Anastasiades urged them to provide a long-term and sustainable solution to liquidity issues faced by BoC.

Around €9.0 billion legacy liability was transferred to BoC – under the terms of the bailout deal – from the now defunct Laiki Bank, which had been withdrawing emergency liquidity assistance from the ECB.

The administration holds Draghi and Central Bank Governor Panicos Demetriades responsible for allowing the amount to rise to around 50 per cent of the island’s GDP.

In March, Demetriades said Laiki had been kept afloat for nine months, despite its enormous liquidity problems, because the bank had to stay alive until the presidential elections.

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