Inquiry panel: current goverment was unprepared

By George Psyllides

THE COMMITTEE looking into the island’s economic collapse blamed the current administration for going to the bailout negotiations unprepared and underestimating the situation, a leaked report showed.

“President (Nicos) Anastasiades and his government are responsible for one and only one reason: the preparation for the Eurogroup negotiations was lacking,” the three-member committee said in its findings.

However, the panel did not reject the president’s position that he had found himself before the harsh dilemma of agreeing or rejecting the deal that was forced onto Cyprus.

The Eurogroup decided to seize a percentage of all deposits in all banks to recapitalise two stricken lenders.

Parliament rejected the decision and 10 days later the island was forced to agree to worse terms set by the Eurogroup.

Shutting down Laiki, the island’s second biggest bank, and seize uninsured deposits to recapitalise Bank of Cyprus.

Anastasiades had said he had negotiated with a gun to his head.

“He took it upon himself to accept, judging that refusal would have worse consequences for the country,” the committee said.

It also said that it was wrong to exclude banks from the negotiations.

The committee added that the talks had been complicated by an audit in the bank portfolios, which allegedly inflated the banks’ capital needs.

Again the banks were absent from the talks, the committee said, which was wrong.

Of the forced sale of the Cypriot banks’ Greek operations, the committee said it was obvious that the aim was to limit their activities to Cyprus.

“It can also be said that there were possibly ulterior motives involved; other eurozone countries wanting to get foreign nationals’ deposits,” the committee said.

It ended its report with the hope that Cyprus, which has survived so many tribulations, will “tackle the current economic crisis and will get back on its feet, paving a promising course for its unfortunate people.”