WHEN NICOS Anastasiades was standing for the presidency, this paper held the view that he would provide the strong and decisive leadership that the country had so desperately lacked in the previous five years. After a year-and-a-half in office, Anastasiades has proved that this view was nothing more than fantasy. He has provided nothing resembling strong leadership, often displaying many of the weaknesses that made his predecessor such a poor president.
Like his predecessor, he seems more interested in his popularity ratings, keeping as many political parties as possible happy and minimising any potential cost to himself by avoiding taking personal responsibility when difficult decisions need to be taken. This very Cypriot style of leadership that is at the root of most of the country’s problems has been evident in Anastasiades’ term in office, especially in his approach towards the Cyprus problem. And in recent weeks he has displayed it, in all its glory, in his mishandling of the foreclosures bill. In the process, he has turned a manageable problem into a potential disaster for the country.
The president showed no resolve in defending the bill his finance minister had negotiated with the Troika, opting to pander instead to the reckless populism of the party leaders, inviting them repeatedly for consultations, chopping and changing the bill and ordering the drafting of accompanying bills that would supposedly offer more protection to people with NPLs. And when the party leaders claimed that they could not trust presidential assurances that foreclosures on primary homes would not be pursued before the insolvency bill was ready by the end of the year, Anastasiades appeared to agree with them and came up with additional measures to ease their reservations.
It may sound absurd, but the president appears to have joined the recklessly populist and irresponsible opposition. At the last meeting he had with the party leaders on Thursday he adopted every suggestion they made, giving instructions to have them included in the bills that were being prepared. Reservations expressed by the finance minister, on the grounds that the additional proposals would not be accepted by the Troika, were brushed aside by the president who was determined to satisfy even the most absurd demands of the opposition leaders.
The result of the meeting was that the voting on the bills that was meant to have taken place on Monday was put back to Friday so that the additional measures, decided by the presidential palace committee, could be discussed at House committee level and incorporated into the bills. Whether the Troika will agree to all the changes, which seem designed to make implementation of the foreclosures bill very difficult, remains to be seen.
Meanwhile a press report on Saturday, quoting sources at the Bankers’ Association, said that cash withdrawals from the banks had increased significantly in the last few days, attributing this to low public confidence. The report claimed the withdrawals were triggered by statements by the president of the National Economic Council, Nobel prize-winner
Christoforos Pissarides, who warned that failure to pass the foreclosures bill could lead to another haircut of deposits as the banks would need to recapitalise again and be unable to draw capital from anywhere, once the adjustment programme had been derailed. Pissarides was not being alarmist, as the press report suggested, but stating a fact – without a foreclosures law the banks will not get through October’s EU banking stress tests and need new capital.
Blaming the messenger is standard practice in Cyprus. However the blame for the uncertainty and falling confidence lies squarely with a dithering president who has chosen to behave as irresponsibly as his new-found allies – the populist, party leaders. If he was capable of providing strong and decisive leadership, Anastasiades would have announced that no more changes would be made to foreclosures bill two weeks ago, and it would have been submitted for approval as scheduled last week. He would also have informed the public of the devastating consequences to the economy of not approving it and left the demagogues -Papadopoulos, Omirou, Kyprianou, Lillikas – to take the responsibility for plunging the country into another crisis.
They would have backed down and approved the bill, which even the militant associations defending the interests of borrowers were satisfied with. But with the president betraying an embarrassing degree of weakness, the party leaders kept pushing for more changes which have resulted in bills that are highly unlikely to secure the approval of the Troika. What happens next is anyone’s guess.
