All political parties as well as the government are backing the initiative, which started in 2021, to set up a new cooperative bank. Although there is still some way to go, it appears that a lot of work has already been done and that the unions and farming organisations behind this undertaking are confident they would be able to raise €6m to get the new Coop going.

The Pancyprian Cooperative Company for the Promotion of the Coop Ltd should be submitting its application to the Central Bank in a year, at the latest, said its President Panicos Hambas speaking at the House watchdog committee on Thursday. As soon as a banking licence is issued five branches would be opened. He said market research and all the necessary financial studies regarding its operation were carried out by a big audit firm while technocrats were handling the application for a licence.

There is unanimous support for the establishment of a new coop bank from the deputies on the committee, the chairman Zacharias Koulias, describing it as “a historic day for the country” and referring to “the rebirth of the Coop from its ashes.” Support was also expressed by Commerce Minister George Papanastasiou, who also said he would back the company’s demand for the return of the buildings of the defunct Coop to the new bank. Whether this is legally doable is another matter, but it was an indication of the government’s desire to help the initiative.

Deputies from all parties were taken over by nostalgia for the old Coop banks, creating the illusion that the new entity would be just like the old. If it is, it will end up like old Coop, but there is no way this would be allowed. The new Coop would be just another bank, requiring a licence from the ECB, under the supervision of which it will be. Loans will not be given to friends and neighbours, repayment ability would be examined and instalments would have to be paid promptly; the Coop would have to meet capitalisation requirements, and all other criteria set for banks.

Everyone agreed that a Coop bank would increase competition in the banking sector, something that would be welcome. Papanastasiou said that it “would reduce profit margins that commercial banks have as their target, so there could be a competition that would work on smaller profit margins.” This was also the view of deputies, who claimed the new bank offered an opportunity for the creation “of a new development model” ending “today’s oligopoly of the commercial banks and their super-profits at the expense of the Cypriot people.”

There is no doubt that another bank would increase competition and offer more choice to people, but the idea that a new Coop could operate with smaller margins, in order to help people is questionable. If the Coop bank is to be successful and help people in the long term it must be profitable and operate like a bank. The practices of the past must be forgotten.