FINANCE Minister Charilaos Stavrakis yesterday said if the government hadn’t given Eurocypria a controversial €35 million cash injection, the airline would have collapsed within days.
He also said this would have made it impossible for the state-owned airline to merge with majority-state owned national carrier Cyprus Airways (CY).
Responding to accusations that he had purposely misled parliament into believing Eurocypria’s future was viable, by refusing to present a report by the Accountant-general, Stavrakis said the report had no relation to the €35 million injection whatsoever.
“I think this is completely misleading and a lie,” said Stavrakis. “Both studies regarding Eurocypria had been asked to be carried out by me personally so I could form a better idea with my associates of the future and various strategic choices for the two state airlines. The studies had no relation with injecting Eurocypria’s capital with €35 million.”
Anyway, he added, the decision to increase Eurocypria’s capital was the right one, as it secured a large tourist flow to the island, while protecting Cyprus’ credibility with the banks.
Asked to comment on why the money was given to Eurocypria when the government was toying with the idea of merging the two state airlines, Stavrakis said: “If the government didn’t support Eurocypria, it would have collapsed in the ensuing days because of its loans owed to the banks and it would therefore been practically impossible to merge the two companies.”
DISY vice president Averoff Neophytou yesterday accused the government of misleading parliament into approving a €35 million injection to Eurocypria, while being fully aware that the airline’s future viability was at the least questionable.
The money, which was approved under the condition that the state-owned airline would have a viable future, was taken from the pockets of the “suffering public” just to help Eurocypria pay off its bank debts, said the MP.
Neophytou added that this was all clear in the report the Finance Minister refused to present to parliament and which had been prepared before the government sought the Eurocypria injection.
“Finance Minister Charilaos Stavrakis was fully aware of every detail in the Accountant-general’s report before coming to parliament and with misleading information, securing €35 million from the non-privileged,” said Neophytou.
The minister had used the excuse of securing the future of 300 working families, who would’ve been left without jobs if Eurocypria went bust, he added.
But Neophytou said now that talk of a merger with CY was emerging could the government ensure these 300 employees would still have their jobs?
He went on to question whether the government would invest even a euro in Eurocypria, if it was from their own pockets.
The MP came into direct conflict with AKEL general-secretary Andros Kyprianou on Tuesday, after he claimed at the House Watchdog Committee that he had a copy of the report and had obtained it from Kyprianou. The latter admitted he had the report but categorically denied giving it to Neophytou.
“In any other European state, the entire political system would be shaken by such government policies against the institution of parliament,” said Neophytou.
Later in the day, Government Spokesman Stefanos Stefanou issued an announcement “to clarify certain things”.
He said: “It is being said that the government supposedly hid the report or study by the Accountant-general, because it supposedly wanted to mislead parliament to approve €35 million for Eurocypria. I state categorically that the report had no relation whatsoever to the €35 million that was approved by parliament for Eurocypria.”
This contradicted claims that parliament had been misled, said Stefanou.
He added that the report’s existence was no secret; there were many studies into the viability of Eurocypria, some carried out by technocrats.
“Regarding the future of Eurocypria, a discussion that is underway for a while now, the government has committed to deciding on its future soon, following a new survey that is currently in development,” said Stefanou.
He said Eurocypria would continue to operate until the end of summer 2010, on the request of hoteliers and others in the tourist industry. “The government) also took into consideration the fact that Eurocypria had financial obligations and that we needed to protect the credibility of our state, which effectively owns Eurocypria,” said Stefanou.
In the meanwhile, Stefanou added, the Finance Minister yesterday ordered the controversial report to be sent to all parliamentary parties.
