NO DEAL was cut between outgoing Finance Minister Makis Keravnos and the Church over the latter’s millions of pounds in taxes owed to the government, Bishop Chrysostomos of Paphos said yesterday.
He was commenting on allegations that Keravnos landed a high-paying job with Hellenic Bank as a trade-off for letting the Church off the hook for some £37 in unpaid taxes.
The Church of Cyprus is in effect the controlling shareholder in the Hellenic Bank, where it owns an 18 per cent stake. As such, it has a big say in who runs the organisation.
The government and the Archbishopric have long been in negotiations about this sum, and reportedly some kind of a preliminary agreement was struck during Keravnos’ tenure as Finance Minister.
Citing sources, daily Alithia ran a story yesterday saying such a deal was in fact in place, hinting that the government was keeping it under wraps so that no connection would be made with Keravnos’ departure. The paper’s gist was that Keravnos “wrote off” the £37 million in exchange for the job at Hellenic.
Keravnos had held two portfolios in the current administration; he served as Labour Minister before transferring to the Finance Ministry. His departure from office was the object of speculations for months, but this week his appointment as Chief Executive Officer at Hellenic was finally confirmed. He will now receive a salary of around £160,000 per annum.
His successor Michalis Sarris was sworn in yesterday.
Keravnos’s career move also raised questions as to how a Finance Minister in office could have negotiated a place in the banking sector. Main opposition party DISY suggested this behaviour was improper and unethical.
On Tuesday, Keravnos dismissed DISY’s insinuations as “unworthy of any comment”.
Meanwhile yesterday Bishop Chrysostomos flatly denied the Church had anything to do with Keravnos’ appointment at Hellenic.
Negotiations between the State and the Church over taxes owed began under the previous government and continued into the present, he said, adding that nothing Machiavellian was in the works.
“We have been in the courts with the government for many years now…the Church owes the government, and the government owes the Church,” Chrysostomos said.
As part of an overall arrangement, he added, the Church has proposed that the £37 million be written off and that it should start paying taxes normally as of August this year.
The acting Church leader also seemed angry at recent press reports, saying “the Church does pay its taxes, and all this populist talk about us not paying our dues should stop.”
And although Government Spokesman Kypros Chrysostomides was cagey about the issue, he implied that, under the agreement being negotiated with the government, the Church would for the first time formally acknowledge its obligation to pay taxes.
Hellenic Bank has not been without its share of controversy this year. In March, the banks announced the appointment of a new vice-chairman of the board to replace Constantinos Loizides, who resigned after shareholders began expressing their concerns over increased bad debts provisions in Greece that were affecting the bank’s profitability.
