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Cyprus

‘Slacking off on bailout is not an option’

By Stefanos Evripidou

THE GOVERNMENT will not tolerate any slacking when it comes to implementing the bailout deal, said President Nicos Anastasiades last night, warning there was no guarantee the worst was over for Cyprus.

Speaking at a televised press conference on the first four months of the new government, Anastasiades said he went back on his own pledge not to accept a haircut during the Eurogroup meeting last March because the alternative was a disorderly default of the banking system, followed by the state.

“I preferred to seem untrustworthy rather than trustworthy and heroic, and return to my country with all of us crying over the ruins,” he said.

Despite arguing that the first Eurogroup decision of March 16 was a better option than the final decision taken on March 25, he said: “It is not my intention to get into debate on how wise the rejection of the first agreement was, because I fully understand the emotional reasons which led to its rejection.”

Asked why he had failed to convince the parliamentary parties, including his own, on the need to adopt the first Eurogroup decision, if the alternative was much worse, he said: “Because I am not a dictator. I would never impose on anyone to adopt my positions.”

Cyprus will pursue those responsible for the banking sector collapse and fiscal difficulties that led to the island’s international bailout, he added.

“I don’t want to focus on the responsibilities of those who led us to the decisions of March … But what I will stress is our resolve that none of those who led our country to this tragic state (will) be left unpunished.”

Anastasiades batted off criticism that he went unprepared to the Eurogroup meeting in March, saying he went with a package of 12 measures, which crossed previous ‘red’ lines of the government, including provisions for an increase in corporate tax and privatisations.

However, when he got there, he found a “well planned” decision to impose a model that would become the future model for tackling banking crises in the eurozone.

“It was not a lack of preparation, but the collective and comprehensive decision of the EU, IMF and ECB to impose a model which from that day became the reference point for solving banking crises,” he said.

Despite the treatment of Cyprus at the Eurogroup, Anastasiades said he still wished German Chancellor Angela Merkel luck in the upcoming German election in September, “Because I believe after the elections, we’ll see another Mrs Merkel”.

He described her as a competent leader of Germany and Europe.

Cutting a much more confident figure than the beaten man who wearily dragged himself up the steps of the Presidential Palace after the first Eurogroup meeting in March, Anastasiades said the government, through hard decisions, avoided the complete collapse of the state and the suspension of payments.

Instead, it worked to improve and complete the memorandum of understanding (MOU) with the lenders for the €10 billion international bailout, which also entailed the eurozone’s first ever bail-in by bank depositors.

“I cannot claim that we are out of the woods or that we have overcome the harsh consequences. On the contrary, if we want to avoid the worst, we must implement with consistency, everything that has been agreed with our partners to achieve more,” he said.

With a troika delegation arriving on Wednesday for a two-week review of the MOU’s implementation, Anastasiades said he would be “unyielding” against those who ignore or delay the implementation of cabinet decisions.

He assured that the government will continue its efforts to stabilise the country’s financial sector to secure the necessary liquidity and encourage private initiative and investments.

The main aim remains to lift capital controls by the end of the year, once the Bank of Cyprus is brought out of its ‘resolution’ status, he said.

Asked about his recent meeting with European Central Bank (ECB) President Mario Draghi, Anastasiades confirmed that the ECB chief did not commit to any specific measures to help Cyprus out of the quagmire.

What was said with certainty was that they would continue their dialogue and jointly decide on measures if and when the Bank of Cyprus exits its resolution status, he said.

In response to a question on whether the island would sell off its gold reserves, as stipulated in the MOU, he said: “I want to believe there will never be such a need.”

Anastasiades listed a series of measures taken by the government in the first four months to improve the dire state of the Cypriot economy, including cost-cutting measures and increasing EU co-financing in Cypriot projects.

Regarding the unprecedented number of jobless in Cyprus, the president said: “There is no doubt that one of the greatest plagues of the economic crisis is the ever increasing unemployment.”

However, the effective management of unemployment can only be achieved through the restart of the economy and growth, he added.

Anastasiades warned that if big businesses try to exploit workers through the government’s latest decision to extend working hours and allow shops to open on Sunday, he would rescind the decision immediately.

“If there is this kind of behaviour from some businesses, the extension of hours measure will be terminated.”

One of the most important steps to help restart the economy is managing the island’s natural wealth, meaning the exploitation of natural gas in its exclusive economic zone, he said.

He referred to the decision to build a liquefaction plant and agreement signed with Noble Energy and Delek, noting that many other companies were interested in participating in the massive project.

“The recent Israeli decision to export 40 per cent of its hydrocarbon reserves, I have no doubt, will raise even more interest. The policy we are following of strengthening relations with the neighbouring country, we hope, will turn Cyprus into what Europe is also hoping for, the energy hub of the region.”

Surprisingly for a presidential press conference, Anastasiades made no mention of the Cyprus problem in his introductory speech, as pointed out by a journalist during the Q&A session.

He responded that his main focus right now was the economy and the government’s handling of the crisis.

“I have never claimed that the economic crisis will be overcome in a few months. There are no magic solutions and for this reason, time is absolutely pivotal,” the president said.

He expressed optimism that Cyprus will achieve its goals, which he based on the government’s “tireless efforts”, the responsibility shown by the social partners, political forces and parliament as well as on “the perseverance and good sense shown by society at large, especially those who have suffered the hardest consequences of the economic crisis”.



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Source: Cyprus News Agency

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