THE EUROPEAN Court of Justice’s rejection of the applications for the annulment of the Eurogroup decision of March 2013 that paved the way for the bail-in of bank deposits was not very well-received in Cyprus. Lawyers that had filed applications accused the court yesterday of taking a political decision, the aim of which was not to challenge the decision-making procedures of the EU or to put the Commission and the ECB under pressure.
Appeals would be filed, they said, even though it is very difficult to see any chance of these being successful in the light of Wednesday’s decision, which noted that the Eurogroup was an informal forum of ministers of member states that had no decision-making powers. Statements made by this forum could not be attributed to the ECB or the European Commission the Court ruled, explaining that Eurogroup statements did not produce legally binding results for third parties. As regards the bail-in of deposits, the court viewed this as one of several measures agreed at political level which, ultimately, was implemented by the national government.
It seems only the lawyers were unable to see this truth. The Eurogroup had set certain conditions for saving Cyprus from state bankruptcy, but the final decision of whether these would be accepted belonged to the government. It could have said no to the bail-in of deposits which would have led to the collapse of the banks, the bankruptcy of the state, which would not even have been able to cover insured deposits, and an exit from the euro. Who would the depositors, who would have lost all of their deposits and not just 50 per cent, have been suing in such a case?
Perhaps, it will dawn on the lawyers and their clients, after an unsuccessful appeal, that they would have to sue the Cyprus government in the Cyprus courts over the supposed illegality of the bail-in. Given the unpredictability of the Cypriot courts they might even win, dealing another blow to the ailing economy.
Unfortunately, everything in Cyprus is reduced to a legal issue, which is quite strange considering our country does not have the most law-abiding citizens in the world. It does however have an over-abundance of lawyers who constantly have to think of new ways to generate business.
We saw what happened after the referendum of 2004 when some two thousand recourses were filed at the European Court of Human Rights on behalf of refugees claiming the return of their properties. This resulted in the ECHR referring all cases to the Immovable Properties Commission in the north. It is doubtful the appeals against the European Court decision would be successful, even though we are sure the lawyers that will file them will be very optimistic about the prospects of a positive outcome.