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Cyprus

No need for depositor concern says Spokesman

Prodromos Prodromou

Depositors in the Co-op bank should not be concerned, Government Spokesman Prodromos Prodromou said on Sunday.

“Deposits, as clarified by the Central Bank, are secure,” he said.

Deposits up to €100,000 per individual or legal entity are guaranteed in accordance with a European directive.

Under the circumstances, Prodromou said, the government took a difficult but necessary decision, which secures the financial system and preserves the smooth path of the economy and its continuing development.”

“The final decision lies with the House of Representatives.

“These are certainly not easy decisions but we believe that our country can again show that, as a whole, it can respond correctly”.

A government bill to allow it to extend guarantees to Hellenic Bank following its take over of the Co-op to shield it from probable underperformance of assets it agreed to acquire has been met with opposition by opposition parties.

The deal, which provides for the transfer of the Co-op’s operations to Hellenic including €9.7bn in deposits is set to spare the Co-op from being liquidated.

The implementation of the deal also requires the approval of a byndle of amendments in legislation to help banks reduce their non-performing loans.

On Friday parliament rejected a government request to discuss the bills as a matter or urgency, scheduling them instead for next week. The government had submitted the bills on Friday morning and had hoped they would be discussed and passed by the plenum the same day. However, the plenum decided they must first be discussed by the House Finance Committee.

On Sunday Akel leader Andros Kyprianou issued a statement outlining his lack of support for the bills. “They have made an illogical deal with Hellenic Bank. They have brought the country to within one footstep of chaos,” he said. Instead of apologising and taking their responsibilities seriously, Kyprianou said the government had “threatened all those who do not support their one-sided decision and tell them they carry the responsibilities for the results of their policies.

“We will fight to protect the deposits of people that the government has put in danger.”

Prodromou said President Anastasiades and Finance Minister Harris Georgiades will have a meeting on Monday with Diko leader Nicolas Papadopoulos to discuss the entire Co-op package, bills to improve the control of loans and the protection of primary residences.

A discussion will be held on some suggestions put forward by Diko, Prodromou said.

“The President does not rule out other contacts during the coming days,” Prodromou added.

On Friday customers were queuing up to take their money out of the Co-op, with €2 billion having been withdrawn in the first three months of this year and the Cyprus News Agency reporting that €70 million had been taken out by noon on Friday.

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