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Our View: Solidarity fund was merely an election gimmick

THE GOVERNMENT’S last-ditch attempt to secure the legislature’s approval for the transfer of €25 million into the Solidarity Fund, to supposedly help the victims of the 2013 haircut of bank deposits, failed spectacularly on Monday as no opposition party was prepared to back it. This was not because they were opposed to the idea of the fund, but they believed with ample justification it was thought up to boost President Anastasiades’ re-election drive.

The evidence seems to support the theory, even though a finance ministry official told the House finance committee during Monday’s urgently called meeting, that if the spending item was not approved now it would be lost because it could not be transferred to the 2018 budget as it would affect the year’s fiscal planning. This seems a peculiar argument, considering the €25 million the government proposed to spend now was not included in the 2017 budget, but the money was still found.

It was no coincidence that the government came up with the proposal for the Solidarity Fund in November, two months before the presidential elections. This was an attempt by the Anastasiades camp to counter the proposal of his main rival, Nicolas Papadopoulos, who promised to compensate everyone who lost money in the bail-in. Apart from some vague ideas, he did not explain how he would do this, but it was a winner as it offered a ray of hope.

In response, Disy and the Citizens Alliance, whose leader Giorgos Lillikas is also a candidate, tabled the proposal for the Solidarity Fund, which would provide financial assistance over a period of several years to the victims of the haircut. Finance Minister Harris Georgiades made it clear that the assistance was not ‘compensation’ because this would suggest the state was legally liable, while Disy acknowledged that only a small part of the total losses of some €8 billion would be covered.

The fund was nothing more than an election gimmick by the Anastasiades camp. Regulations of how it would operate and who it would assist had not even been worked out, as it was set up for another purpose – helping the needy during the crisis – hence the government warning that the fund would start paying out only when there was enough money in it, setting €100 million as its first target. It could be another year before this happened, so why is there such a rush to get the €25 million approved now? It is not as if it would be paid out any time soon.

There is little doubt that the whole initiative was a cheap electoral ploy that would have served no purpose other than to allow Anastasiades to pose as the candidate who set up a fund for the haircut victims who also represent a sizeable number of votes.

 

 


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