Cyprus Mail

Truth behind CB governor pay out emerges

By Angelos Anastasiou

FOLLOWING a week of denials, the widely suspected backroom deal between former Central Bank governor Panicos Demetriades and the government was confirmed by Finance Minister Harris Georgiades, amidst declarations of outrage by opposition.

Speaking on public radio on Monday, Georgiades tried to appear nonchalant while acknowledging the rumoured behind-the-scenes bargaining that led to Demetriades’ sudden resignation last Monday.

“It was an agreement between the outgoing governor and the government for his voluntary departure,” he said.

Demetriades’ resignation drew criticism when it emerged that it came with a reported €265,000, or roughly two years’ salaries, paid to him by the government in compensation, while his employment contract included a similar clause only in the event of his dismissal – but not his voluntary exit.

“His resignation was voluntary but what the governor had asked for – and the government accepted – was the payment of this amount in compensation,” Georgiades said.

The finance minister’s admission of haggling included a strange assertion that the government “never tried to claim otherwise”, even though the government’s spokesman Christos Stylianides and his deputy Victoras Papadopoulos, as well as Anastasiades, were explicit in denying charges of backroom dealing throughout last week.

But despite Monday’s revelation, the bigger picture remained blurry as Georgiades made no mention of the attorney general’s decision to suspend prosecution against Demetriades, also rumoured to be part of the deal.

Later on Monday, socialist opposition party EDEK issued a harsh statement lambasting the government’s bartering, signing it off with a vague suggestion that Demetriades’ access to information allowed him to secure a favourable deal.

“For one week, the president and the government spokesman told the public that the governor’s resignation was the result of an ‘understanding’ and that ‘there had been no transaction’,” EDEK’s statement said.

“The withdrawal of the prosecutions against him, almost simultaneously to his resignation, coupled with the outrageous severance package he received, as well as the finance minister’s admission, leave the government irreparably exposed in the eyes of the public.”

Ruling party DISY’s spokesman Prodromos Prodromou tried to downplay the issue, alluding to near-unanimous earlier calls by political parties for the need to replace the governor, and claiming that the final “arrangement” was in the country’s best interest.

“Did some parties prefer to have kept the situation of disarray, conflict, and destructive decision-making?” he mused.

“Let’s not bury our heads in the sand – ideally, this arrangement would have been come to months ago,” he said.

With regard to the issue of severance pay, Prodromou argued that Demetriades “was entitled to some compensation” due to the fact that his contract wouldn’t be up for three more years, and accused parties citing the figure of “playing to the suffering of the unemployed and the low-income earners”, a practice which he dubbed “not serious”.

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