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Cyprus

Clerides puts foot down amid Co-op blame game (Update 2)

By George Psyllides

ATTORNEY-GENERAL Costas Clerides said on Thursday that it is his office which will appoint an independent panel to look into what went wrong at the co-op bank.

In a statement, Clerides said that due to “apparent confusion” in the public space over who will authorise and empanel the investigative committee, he was making it clear that only the attorney-general has the power to do so.

“Provided that in the matters under investigation either the cabinet and/or government ministers may be implicated, the only body with the authority to appoint an investigative committee is the attorney-general, via a decree.

“This requires no action on the part of the cabinet.”

The decree appointing the committee would name the members and define its terms of reference.

On Wednesday, Clerides had said he would be launching a probe into the possibility of wrongdoing at the co-op.

The investigation will look into how the lender’s non-performing loans amounted to €7.5bn as well as why Co-op required €1.5bn in recapitalisation from the state in 2014.

It also aims to provide insights into the way the lender was managed as well as all the decisions that led to its eventual sale to Hellenic Bank.

On Thursday, as the blame game between parties over the fate of the lender raged on, president Nicos Anastasiades said a probe into the events that led to the fire sale of the co-op bank will cover the periods before and after 2013,

“The investigation the government is asking for concerns what preceded and what followed” 2013, he said.

The president said the probe will look into what happened that led to the co-op needing €1.5bn to survive in 2013 but also how we ended up with €7.5bn in non-performing loans between 2013 and 2018 “that led supervisors in Europe force us to make a painful decision, which, however, rescues savers, stabilizes the banking system, and creates prospects for the future.”

The deal has cost taxpayers some €3.5bn, which officials said they would recoup through some €6bn in non-performing loans, also left in the hands of the state.

That, however, would entail changes in the foreclosures law, which made it hard for lenders to collect their dues.

“As long as everyone, realising the difficulties, adopts some effective measures, as requested by the European Commission,” he said.

“This way, a problem known to all will be tackled in an effective and positive manner.”

Main opposition Akel insisted on Thursday that the government was responsible for the plight of the co-op bank.

Parliamentary spokesman Giorgos Loukaides said it was during their tenure that the co-op’s problems were diagnosed and during their tenure that a remedy had been imposed.

“They are the ones who were the owners and had the responsibility of managing the co-op in the past six years,” he said.

“They are the ones who sacrificed it to save Hellenic bank through a rigged process and a very bad deal, instead of returning the co-op to the public, as they had pledged.”

The sale will be discussed by the plenum on June 29, a day after discussion in the House finance committee attended by the finance minister.

Parties rejected a suggestion by Citizens Alliance MP Giorgos Lillikas to appoint an independent expert to review the deal.

Lillikas said later he had asked for the agreement to be probed by technocrats to determine whether it was bad for the state or favourable for the bank.

“Instead, we will settle with political and party criticism,” he said.

 


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