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President gives full backing to finance minister

March 7, 2019 at 9:05pm
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President Nicos Anastasiades on Thursday expressed full confidence in beleaguered Finance Minister Harris Georgiades, brushing aside calls the minister be sacked over the collapse of the Co-operative Central Bank.

The president’s written statement follows yesterday’s publication of the report by a committee of inquiry which said the finance minister bore major responsibility for the CCB’s demise.

“The finance minister’s responsibility for the collapse of the co-op bank is huge,” the report said.

In the wake of the publication of the report, opposition parties called for the minister to resign or be sacked.

But in a statement  early on Thursday evening, the president said Georgiades enjoyed his full confidence.

He said he would not comment in detail on the report which is being reviewed by the attorney general and who will decide on any future action.

As regards the political responsibility for the collapse, the president noted that the Co-op was bankrupt and on the verge of total collapse in 2013 with non performing loans of 7 billion euro. These were created before 2013 as a result of scandalous behaviour recorded in the report.

One of the conditions of Cyprus’ economic adjustment programme so that it could receive bailout funds was converting the co-op to a bank that would be supervised by the European Central Bank, the president noted.

Despite efforts to reduce NPLs, stricter SSM rules in combination with the 2013 problems led to more measures being taken. It became essential, with the prodding of the SSM, for the government last June to split the CCB and sell the good part to Hellenic, he said.

This decision was adopted and praised by the SSM, the ECB and other EU institutions and was welcomed by credit agencies and the international financial community, Anastasiades said.

This move was cited by the credit agencies in upgrading the economy to investment grade, he also said.

It is clear that the finance minister was called upon to take the responsible decision to avoid the disorderly bankruptcy of the co-op. Loans that were given before 2013 and could not be serviced played an important role in the intervention of the SSM, he added.

By adopting the suggestions of the minister, the government had managed to protect deposits. safeguard jobs and the rights of employees, safeguard the assets of the co-op which will contribute to recovering much of the capital paid by the state, and reinforce the credibility of the economy internationally.

“I would consider the call for the Finance Minister to shoulder the political responsibility perfectly justified if  if I disregarded his role: in averting the disorderly bankruptcy of the state, the speedy and successful exit from the bail out, the creation of a budgetary surplus, the dramatic reduction in unemployment, and the continuous economic growth at one of the fastest rates in Europe,” he said.

And he added; “Despite this, I would still consider the minister held political responsibility if the collapse of the co-op was the result of non-performing loans given after 2013 and not as a result of the non-performing loans accumulated over decades before 2013.”

“In the light of the above I want to confirm the government’s direction as regards the economy and reiterate that the Finance Minister enjoys by full confidence,” the president concluded.

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FinMin bears responsibility for co-op collapse, investigating committee finds