By Angelos Anastasiou
PARLIAMENT on Thursday deferred voting on the proposed piece of legislation transferring administration of Legacy Laiki to the failed lender’s depositors, effectively axing their demand for good as, starting January 1, 2016, resolution of all Eurozone’s systemic banks will rest with the European Central Bank’s Single Resolution Mechanism.
Despite prior assurances that the Central Bank of Cyprus looks positively upon the prospect of administration being passed to depositors – who, in 2013, banded together and formed SYKALA, the association of Laiki depositors – parliament shut the door on Thursday, when it chose to defer coming to a decision until after the Christmas holidays.
The news came as a shock to SYKALA, which censured the decision in a harsh statement.
“With its ‘no decision’ decision, the Cypriot parliament cast the tombstone on a three-year effort by Laiki’s creditors to gain control of the assets left at Laiki, the value of which has deteriorated and continues to deteriorate under the administration of those in power (Special Administrator and Resolution Authority),” the association said.
The Resolution Authority, comprising the central bank’s board of directors, appointed Chris Pavlou as special administrator, mandated with liquidating the now-defunct bank’s remaining assets at maximum value.
“Having walked through fire in fighting establishments and vested interests, we were under the impression that we were heading for a positive outcome,” SYKALA said.
“But it seems we counted our chickens before they hatched. It seems that the interests of some would not have been served if the creditors took over the management of their own assets.”
Central Bank Governor Chrystalla Georghadji, the association said, had assured them for the last six months that she truly wanted administration to be passed on to creditors, and so had Pavlou.
“But when the time came to present the issue in parliament, both the governor and the administrator warned, implored, blackmailed, and scared parties and deputies to vote against the proposed legislation, because, they claimed, the remaining assets would lose yet more value,” SYKALA protested.
“Succumbing to these false dilemmas, the House postponed its voting on the proposal, knowing full well that, as of January 1, 2016, administration changes hands, and goes to the Single Resolution Mechanism.”
Everyone who participated in this charade should know, it warned, that, when the Republic of Cyprus is forced to compensate depositors for the illegalities imposed upon them, they will have to answer to the Cypriot taxpayer, who will be left with the bill.