Cyprus Mail

Anastasiades ‘must answer questions raised’ by former CBC chief

Pancios Demetriades

President Nicos Anastasiades must answer the questions raised by former Central Bank governor Panicos Demetriades, instead of hiding behind slogans, main opposition leader Andros Kyprianou said on Wednesday.

He was referring to a public row kick-started by the publication of Demetriades’ new book, ‘A Diary of the Euro Crisis in Cyprus’, in which he recounts his time at the helm of the bank regulator from 2012 to 2014.

Demetriades oversaw the banking meltdown of March 2013 and has been widely criticised for taking little action and allowing the banking crisis to spiral out of control.

In his book, published earlier this week but with selected excerpts leaked to the local press, Demetriades accused Anastasiades of attempting to meddle in Central Bank affairs and tipping off his relatives of the impending haircut of bank deposits.

Speaking to reporters on Wednesday, Kyprianou said Anastasiades knew as early as March 4 that bank deposits would be seized.

“At a meeting at the Presidential Palace on March 9, I asked [Anastasiades] whether a haircut might be tabled and that’s why he was proposing the measures he was briefing us on, and he said ‘no’, even as his Finance Minister Mr Sarris was nodding from across the room,” Kyprianou said.

The president also needs to answer whether he knew about the haircut, but also whether some within his extended family moved vast sums abroad, he added.

“These are the things he needs to answer, instead of trying to ignore them by deflecting,” the Akel leader said.

On Tuesday, Anastasiades hit back at the former governor, expressing regret at his “ethics and attitude”.

“Panicos Demetriades, on whom it suddenly dawned to write his memoirs, in his under-oath testimony to the investigative committee I appointed in 2013, testified none of what he claims today,” the president told Alpha TV and TVONE in televised interviews.

“He claims he is a man who did everything possible – but at the time he had said that they kept Laiki Bank ‘on the respirator’ until the 2013 presidential election, and the bank had absorbed 9.1 billion in emergency liquidity.”

Anastasiades denied having proposed the seizure of uninsured bank deposits to recapitalize Cyprus’ distressed banks, “unless Demetriades is talking about decisions made before the presidential elections and draft bills prepared by the Central Bank”.

“What he said is false and unreliable,” Anastasiades charged.

“I am sorry to use [such] words but I wonder what expediency prompted him to remember, three months before the election, to say things he didn’t say when his own involvement in the selection of two consultancies over the banks’ capital needs was being investigated.”

On Demetriades’ claim that Anastasiades’ relatives had prior knowledge of the impending haircut decisions and tried to move their money out of Laiki, the president pointed to documents proving that even he had no prior inkling that a bail-in was being considered.

“Up until 3:45am on March 15, I insisted that I would accept no haircut,” he said.

“The first decision was made, which was a one-time tax equal to the interest on deposits for two years.”

On the decision to pay Demetriades’ remaining salary in full in exchange for his resignation, Anastasiades said that “we had to get rid of Panicos Demetriades in any way possible”.

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