Cyprus Mail

Withdrawals spiral in wake of economist’s comments

Christoforos Pissarides the Nobel Laureate economist

By a Staff Reporter
CHAIRMAN of the National Economic Council (NEC) Christoforos Pissarides’ warning earlier this week that a rejection of the foreclosures bill by Parliament could lead the Cyprus economy “back to March 2013”, has apparently caused some panic among depositors, according to local press on Saturday.
Phileleftheros reported that approximately €60 million of deposits were withdrawn from local banks in a single day immediately following Pissarides’ comments on Tuesday made after an NEC session chaired by President Nicos Anastasiades. Pissarides alluded both to a disastrous ‘no’ vote by the House on the foreclosure legislation and a new haircut on deposits.
The paper said reported that while normal outflows from banks typically do not exceed €100 million per month, last Wednesday saw €45 million withdrawn from commercial banks and €15 million from the co-ops.
Meanwhile, daily Simerini reported on Saturday that banks consider themselves victims of an overzealous effort by Anastasiades’ advisors to push for the approval of the foreclosures bill, citing remarks by Fiscal Council chairman Demetris Georgiades along the same lines as those of Pissarides.
But reports have had Anastasiades distancing himself from such doomsday scenarios. Phileleftheros reported that none of the concerns made public by Pissarides had been mentioned during Tuesday’s NEC meeting, while Simerini said that during a meeting between Anastasiades and the Banks’ Association on Thursday, the president assured the bankers that he did not share these views.
Nonetheless, the postponement of the vote from Monday to Friday has raised a few eyebrows among the public, as it brought to mind memories from last year’s Eurogroup decisions – all made on a Friday.

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