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Our View: Eurogroup president’s comments clear about where blame lay for Cyprus’ predicament

Jeroen Dijsselbloem (r) with Cyprus Finance Minister Harris Georgiades (Photo Christos Theodorides)

HOW PREDICTABLE that of all the things mentioned by the President of the Eurogroup, Jeroen Dijsselbloem during his one-day visit to Cyprus most of our deputies focused on his alleged revelation that the Anastasiades government had been informed about the possibility of the bail-in of bank deposits before the March 15 Eurogroup meeting.

The revelation, made, supposedly, in the meeting Dijsselbloem had with members of the House finance committee, was used by deputies to accuse President Anastasiades, who had claimed he was not aware of the bail-in plans before the Eurogroup meeting, of lying. Akel deputies cited this in order to argue that Anastasiades misled people in saying that he had accepted the bail-in, because had a gun pointed to his head.

The truth is people that followed what was being written in the European press not only knew the bail-in was a possibility, but were also aware of the refusal of top Commission officials, including Dijsselbloem, to rule it out when asked about it. Even if the government was aware of it, what should it have done? Should it have discussed the possibility with the party leaders as the Akel spokesman suggested and triggered a bank run when the news was leaked to the media? The government came up with an alternative – the one-off levy on all deposits – which the Eurogroup agreed to at the March 15 meeting, but was rejected by our political parties in the legislature, thus paving the ways for the hair-cut of deposits.

It suited Akel to focus on this non-issue as it deflected attention from a much more important point made by Dijsselbloem: the assistance programme would have been different if it had been agreed a year earlier, but “the decision was postponed and postponed.” He added: “We ran out of time. The banks ran out of money and we ran out of manoeuvring room.” Akel president Demetris Christofias was exclusively responsible for the criminally negligent delays that led to the bail-in of deposits.

This is the crux of the matter – the hair-cut of deposits was on the cards thanks to Christofias’ irresponsible dithering and not because Anastasiades may have known about it in advance. And it was made more damaging to the economy after the legislature rejected the one-off levy on all deposits. Both these decisions were criminal blunders, the cost of which we will be paying for many years to come. As Dijsselbloem pointed out, the bailout would have been different if it had been agreed a year earlier, but it does not suit Akel to dwell on such a painful truth.

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