Cyprus Mail

‘CBC boss should take initiative and resign’

Governor Panicos Demetriades

By George Psyllides

COALITION partners DIKO on Thursday urged Central Bank Governor Panicos Demetriades to do the country a service by resigning, a day after the president said he was contemplating recourse to the Supreme Court to get rid of him.

DIKO leader Marios Garoyian said Demetriades’ resignation would put an end to tension and disagreement and create the conditions for smooth cooperation, which was necessary in restoring the banking sector’s credibility.

“It is time for the governor to make the situation easier by taking the initiative and submitting his resignation as a service to the country,” Garoyian said. “Our plea is for the governor himself to give the solution after weighing the procedure.”

In a television interview broadcast late on Wednesday, Nicos Anastasiades accused Demetriades of not being up to the job and of dragging his feet on restructuring the island’s battered banking system.

The governor has come under criticism also from the political parties and business organisations for his prevarication over the evaluation of the new directors.

The Central Bank had still not completed the ‘fitness and probity’ evaluation of six directors, even though as a member of the resolution authority it had given its approval to all of them.

“I am documenting all those things which represent weakness or inadequacy in the performance of his duties and, in accordance with the constitution, I will decide the prospect of referral to the highest legal council,” Anastasiades told private Mega television.

Main opposition party AKEL urged the government to find a way to cooperate with the governor for the good of the economy.

“Do you think a war, possibly a legal one, in which we have no doubt the European Central Bank would get involved … would help the effort of the economy overcoming the problems?” AKEL leader Andros Kyprianou said.

Demetriades was appointed by former president Demetris Christofias who had fallen out with the previous governor during his administration.

“We do wonder why this clash with the CBC governor is taking place now,” Kyprianou said, “Unless other interests are being pursued.”

Kyprianou suggested that Anastasiades should do what he was advising the previous government to do: find a way to cooperate with the governor and stop creating a climate of conflict and instability.

Ruling DISY suggested that not must only Anastasiades seek the governor’s dismissal but police should also investigate why Cyprus’ second biggest bank was kept going and amassing around €9 billion in debt in the process.

Spokesman Prodromos Prodromou said the governor himself had admitted that the now defunct Laiki was kept going until after February’s presidential election.

Laiki ended up with some €9 billion in emergency liquidity assistance owed to the ECB.

That debt was later saddled on the Bank of Cyprus.

“It is one of the leading issues that need to be investigated,” Prodromou said. “We expect that the criminal investigators (probing the circumstances that led to the collapse of the economy) will investigate it.”

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