Cyprus Mail

Panel of inquiry into economy hands over report

By Stefanos Evripidou

THE COMMITTEE of Inquiry set up to look into the reasons behind the near economic collapse of the country delivered its lengthy report to the government yesterday.

Committee chairman Giorgos Pikis handed the report to Cabinet Secretary Theodosis Tsiolas who is expected to deliver it to President Nicos Anastasiades on his return to Cyprus from the US tonight.

The report is believed to be nearly 300 pages long and contains the testimonies of key witnesses as well as the findings of the committee.

Speaking after delivery of the report, Pikis said: “The position of the committee is that the report should be made public, however this is for the cabinet to decide.”

The report also came with a letter by the committee addressed to cabinet.

Justice Minister Ionas Nicolaou told state broadcaster CyBC that the report will be made public after the Attorney-general examines whether any parts need to be redacted for the purposes of national security or economic interests.

Excluded from international markets since May 2011, Cyprus requested and received approval of a €10 billion financial assistance package from international lenders.

In exchange for the bailout, however, the new Cyprus government elected in February was given an ultimatum during the first of two Eurogroup meetings in March: accept a staggered haircut on all insured and uninsured bank deposits or sit back and watch the European Central Bank (ECB) cut off emergency liquidity assistance (ELA) to the island’s two biggest banks.

Parliament rejected the offer, leading to an extended bank holiday of almost two weeks. By the time banks finally opened their doors again near the end of March, the decision had been taken to wind down Laiki bank, grab deposits of over €100,000 and lump Laiki’s loans, some of its assets and all of its ELA on to the Bank of Cyprus (BoC). Uninsured deposits in the BoC were slapped with a 47.5 per cent haircut, while capital controls were introduced for the first time in the eurozone.

The island’s financial services sector took a blow, its banking sector was almost decimated while thousands of citizens and businesses saw their accounts wiped out. Cyprus’ unemployment is currently hovering above 17 per cent, counting for around 68,000 jobless, while the country has recorded the highest increase in unemployment in the eurozone.

Following his two late night Eurogroup experiences, Anastasiades vowed to seek out those responsible for the near bankruptcy of the state, and raid on deposits, swiping billions of euros.

A three-man committee was tasked with the job and sworn in on April 2, but its composition changed a week later after one member bowed out, citing health reasons. Two weeks later, a second member resigned citing a possible conflict of interest with his son’s law practice.

The final team comprised Pikis, a former Supreme Court President and member of the International Court of Justice in The Hague, Andreas Kramvi, a former Supreme Court Judge, and Eliana Nicolaou, a former Ombudswoman and judge.

The committee was initially tasked with probing possible civil, criminal or political liabilities concerning developments in Cyprus’ economy and banking sector, but in a majority decision, the committee decided to rule itself out of looking into any criminal responsibility that may exist, focusing instead on political responsibility.

When former president Demetris Christofias refused to take oral questions from the panel, a legal issue was raised as to what kind of punishment if any could the committee dish out against Christofias.

Former Attorney-general Alecos Markides waded into the debate, arguing the committee was on shaky legal ground due to errors in the way it was set up.

It remains to be seen how new Attorney-general Costas Clerides will deal with the Christofias issue which remains pending.

The report will also be used by the Legal Service, responsible for deciding whether to apportion any criminal responsibility for the economic fiasco that has befallen the country.

The AG is considering hiring experts to help the criminal investigation into the banking sector.


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