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Cyprus

MPs riled when central bank boss and finance ministry a no-show at co-op discussion

Opposition MPs, who have misgivings about the government’s plans for the co-op bank, were further riled on Thursday after Central Bank chief Chrystalla Georghadji did not show up at a parliamentary discussion.

“We got no answers today, because the two most important players concerning the present and the future of the co-op banking sector, the ministry of finance and the Central Bank, were absent,” Akel MP Stefanos Stefanou told reporters later.

“The matter at hand is primarily political in nature, yet these two persons were not here,” he added.

Due to the sensitivity of the issue – concerning the future of the Cyprus Cooperative Bank – the session of the House watchdog committee was held behind closed doors.

Since Monday, when the co-op announced it was opening a virtual data room so that potential investors could access information, the government has been under heavy fire from political parties for “selling-off” the bank.

The process launched by the bank has two parts, one offering the choice of acquiring the co-op as a licensed entity, or part of, or all its assets and liabilities.

Opposition politicians fret that the ‘good part’ of the co-op will be sold off to private investors, while the state will retain the ‘bad part’ – the balance sheet with the delinquent loans, and this after taxpayers bailed out the lender to the tune of some €1.7bn.

The co-op bank was recapitalised with €1.67bn in taxpayer money in 2014 and 2015, but it is struggling with some €6.4bn in non-performing loans, accounting for more than half of its loan portfolio.

In response, the co-op has recalled that the state gradually reducing its share in the co-op had been a precondition of bailing out the bank.

Under the commitments undertaken, the state’s share in the bank must not exceed 25 per cent by the year 2020.

Discussion in parliament will continue next week, with the participation of finance minister Harris Georgiades.


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