The ATTORNEY-GENERAL Costas Clerides was quite right to issue a statement avoiding confirming or denying a report in Monday’s Alithia claiming that the Governor of the Central Bank Panicos Demetriades would be prosecuted in connection with a case of forgery. Nothing should be announced before the Attorney-General is ready to take the case to court.
It was also rather strange that one of Demetriades’ lawyers had complained that he had not been informed by the Attorney-General on the prospect of his client being prosecuted. The Attorney-General has no obligation to inform a lawyer if he plans to bring charges against the lawyer’s client. The government has also avoided commenting on the matter, a spokesman correctly pointing out that the decision was the exclusive responsibility of the Attorney-General.
Of course, the news report has put Clerides in a rather difficult spot because if Demetriades decided to step down tomorrow, in exchange for not being prosecuted, the integrity and independence of the Attorney-General would be questioned. The Governor had discussed the possibility of resigning with the Under-Secretary to the President a few months ago but his compensation claims were so high no agreement was reached. This meeting, however, took place before the Attorney-General ordered an investigation into the deals made by Demetriades with Alvarez and Marsal.
One thing is certain. If a decision to prosecute is taken it would it could set in motion a series of secondary cases. For instance, the constitutionality of prosecution could be questioned and there may be several appeals before the actual trial begins. Would the Governor be suspended until the completion of the trial which could take several years or would he carry on performing his duties while facing criminal charges?
If there is a court case, the defenders of Demetriades at the ECB and the European Commission would not be able to take a stand in his support as they have been doing until now. They would have to wait for its outcome because an independent state official is not above the law and when he is suspected of a committing a serious offence he should be charged. It would be very interesting to see how the ECB would react to one of its own facing criminal charges.
Of course there should not have been the need of a trial. Demetriades has performed his duties inadequately ever since his appointment in May 2012, causing irreparable damage to the economy and the banking sector and should have been relieved of his duties a long time ago. But according to EU law, a national government does not have the authority to get rid of a Central Bank Governor, no matter how badly he does his job, because safeguarding the independence of the institution is considered more important than a country’s interests.