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Haircut pledge ‘my biggest mistake’: Anastasiades (Updated)

Bailed in depositors and bondholders demonstrating outside the presidential palace on Monday night (Christos Theodorides)

Pledging that there would not be a haircut on deposits was probably his biggest mistake so far as president, Nicos Anastasiades said on Monday, but he emphasised that his administration was the only one who went after corrupt officials and put them in jail.
“The pledge about the haircut was probably my biggest mistake simply because, not knowing the situation, I believed we could avoid it through negotiations,” Anastasiades told reporters during a news conference.
After his election in February 2013, the president said the state only had cash for one month, while the emergency liquidity assistance – mainly drawn by the now defunct Laiki bank – was around €11 billion. On top of that, banks needed around €7 billion to recapitalise.
Anastasiades wondered if anyone else in his position would have wanted to be bound by a pledge they could not deliver.
While the president was giving the news conference, outside the Presidential Palace, dozens of people who lost money in the haircut, or bail-in, and bank bondholders who also saw their investment reduced to zero, demanded the “injustice be rectified”.
But if the haircut was not his administration’s finest hour, the president boasted that under his administration, for the first time in the history of the Republic, politicians and other prominent individuals had been put behind bars.
“For the first time in the 56 years of the existence of the Republic of Cyprus, and in just three years, the determination displayed resulted in politicians, personalities of public and financial life, considered untouchable for decades, were either convicted, facing trials, or are under investigation,” the president said.
Authorities have so far charged Bank of Cyprus officials for potential offences committed before the economic collapse, while investigations continue. Former Laiki bank officials have also been charged and additional inquiries were also ongoing, the president said.
“It is a fact that a delay is observed in filing prosecutions (but) this is due to the complexity of the cases and the assistance needed from third countries (including UK, Romania, Switzerland, Russia, Greece, Belize).”
Authorities were also investigating various corruption cases in the public and wider public sector, and local authorities.
Cases relating to corruption, bribery, and abuse of authority rose from 10 in 2014 to 27 in 2015. Authorities cleared all 10 in 2014 and 24 out of 27 last year.
In general, according to the president, his government managed in three years to rationalise the workings of the state, boost protection for vulnerable groups and workers, and set the foundation for recovery, growth and a gradual return to normality.
He reiterated however, that his intention was not to paint a rosy picture as problems still remained.
“I am not claiming that we have fully resolved the problems faced by vulnerable groups or small and medium businesses, or that we tackled, in the manner we all wanted, the unemployment problem,” he said.
He stressed that claiming this would be to turn a blind eye.
“A significant number of problems created by the economic crisis still remain,” the president said, despite the country’s exit from the bailout adjustment programme last month.
“We are trying to return the country to normalcy,” he said.
But he stressed that any success was due to the positive contribution of all political parties, unions, and the sacrifices of the people.
“Implementing a programme would not have been possible since it is well known that the government does not have a majority in parliament.”
The president said his administration managed to cut the number of people resorting to food banks and unemployment, which recently recorded the biggest year-on-year drop in the EU.
People served by food banks in June 2014 had reached 14,850, the president said, but was down to 4,688 at present.
Some 35,000 families or 59,000 individuals, also receive a guaranteed minimum income – a scheme this administration introduced – at an annual cost of €18.5 million.
The president also outlined the numerous measures rolled out in a bid to tackle unemployment, which had reached 14.7 per cent at the time he assumed office.
In February 2016, the jobless rate was 12.6 per cent, down from 16.6 per cent in the same month last year.
The president conceded that most of those without jobs were youths (one out of three) but he rejected opposition claims that around 30,000 mostly young people emigrated in search for better lives.
According to figures he provided, in three years – 2012, 2013, 2014 – from around 67,000 people who emigrated from Cyprus, some 6,700 were Cypriots.
Regarding the NHS, which many now see as a pipe-dream, Anastasiades said the dialogue with all parties involved would intensify after the May 22 parliamentary elections.
He said the aim was to draft a roadmap that would eventually lead to the full implementation of the NHS.
In the meantime, he added, measures will be put in place to further alleviate the problems in the health sector.
He also deflected criticism from the leader of AKEL, Andros Kyprianou, that announcing a third hydrocarbon exploration licensing round had been an election ploy and that it could jeopardise reunifications talks.
“I would never accept the sovereign rights of the Republic of Cyprus to be disputed,” he said, reiterating that solving the Cyprus problem was his biggest priority.
“But this cannot go against the sovereign rights of the RoC. I don’t think there has been any reaction that affects the bicommunal dialogue.”
Turkey is disputing the RoC’s hydrocarbon programme, claiming that Turkish Cypriots also had a say.
In response to the official announcement of the third licensing round, last month the Turkish foreign ministry said the “Greek Cypriot administration” was challenging the right of Turks on the island at a time when the two sides were negotiating reunification.
The ministry said Turkey would not allow foreign companies to explore for hydrocarbons and would take all necessary measures to protect the rights and interests of its continental shelf.
In October, 2014, Anastasiades suspended his participation in the talks after Turkey dispatched a research vessel to carry out seismic surveys inside the Republic’s EEZ.
Repeated calls for the withdrawal of the Barbaros went unheeded by Ankara, which later announced extension of the surveys until April 6, 2015.
Talks resumed in May last year following Akinci’s victory over hardliner Dervis Eroglu.

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