Cyprus Mail

Draghi letter questions validity of CBC investigation

European Central Bank president Mario Draghi

By Angelos Anastasiou

In a letter to President Nicos Anastasiades, European Central Bank (ECB) president Mario Draghi has warned that recent police investigations at the Central Bank of Cyprus and the seizure of computer hard drives and documents is in violation of the Treaty on the Functioning of the European Union.

The letter was reportedly sent on June 1, one week after police raided the Central Bank of Cyprus following a complaint made against governor Chrystalla Georghadji by parliamentarian Zacharias Koulias over the leaking of a list of deputies with non-performing loans to the press.

Draghi argued that hard drives and documents seized must be returned immediately otherwise the ECB plans to refer the matter to the European Court of Justice, since Eurosystem Central Banks are independent of member-state government scrutiny and are the direct remit of the ECB.

The letter was confirmed by government spokesman Nicos Christodoulides, who told state radio on Saturday that Anastasiades responded on June 3.

In his response, the President informed Draghi of the separation of powers in Cyprus, and explained the role of the authorities when a complaint is made.

He also argued that, since the executive branch of government, meaning the President of the Republic, has no involvement in the matter, he has forwarded Draghi’s letter to the appropriate authority – the Attorney General’s office.

Unnamed sources cited by daily Politis said that the AG’s office confirmed that investigators were instructed to take every precaution to avoid breaching confidentiality in correspondence between the Central Bank of Cyprus and the ECB.

The incident added to a long list of interventions and stern warnings by the ECB to Cyprus over the CBC’s independence.

Last March, political parties in Cyprus demanded the resignation of the entire Central Bank board over Georghadji’s alleged conflict of interest and a disputed claim that she told her board that deputy Attorney General Rikkos Erotokritou had been bribed by a prominent Limassol-based law firm.

At the time, Draghi had called Anastasiades to impress upon him the importance of CBC’s independence.
Two years prior, in the midst of rumoured efforts by Anastasiades to oust then-governor Panicos Demetriades, Draghi had sent another letter warning that any such effort will be taken to the European Court of Justice.

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