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House expected to give go ahead for Hellenic Bank guarantees

July 5, 2018 at 8:12am
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The government appears to have secured a majority in parliament for state guarantees to Hellenic Bank for its acquisition of the good part of the Cyprus Co-operative Bank, Phileleftheros reported on Thursday.

It said that the relevant bill is expected to be approved in the plenary on Friday with the combined votes of DISY and DIKO and the abstention of Solidarity.  The Citizens Alliance has still not indicated how it will vote, with its president Yiorgos Lillikas due to meet President Nicos Anastasiades today.

Approval of the guarantees will open the way for the transfer of the operations of the CCB to Hellenic Bank and is expected to stem the outflow of deposits  from the co-op, which yesterday was already much lower than previous days.

Since last August, the CCB has lost €3b in deposits amid rumours and party wrangling over the state of the co-op. But it still has liquidity of €1.2b with Finance Minister Harris Georgiades  telling the House Finance Committee that the recent loss of deposits does not change the agreement with Hellenic in anyway.

He also assured that the impact of the guarantees on public finances were fully manageable.

But it still remains to be seen what will happen with the bills tightening up rules on NPLs which were rushed through cabinet earlier this week and sent to parliament.

The government has urged speedy approval of the package, which reflects undertakings made to the European Commission, but it is unclear whether they will go to the plenary tomorrow, with the opposition parties saying they need more time.

Political party leaders will meet House president Demetris Syllouris today to decide whether the bills will go to the plenary or not.

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Fin Min: Impact of Hellenic Bank guarantees ‘totally manageable’