THE RESPONSE of the government and AKEL to the interview given on Sigma TV by the former Central Bank governor Athanasios Orphanides was the predictable one. Spokesman Stefanos Stefanou described the interview as “a nauseating crescendo”, accusing Orphanides of “re-emerging with the well-known lies and well-known wretchedness against the president, the government and AKEL.”
The AKEL spokesman Stavros Evagorou, appearing on the same television channel on Thursday night, took great offence at the ex-governor’s claim that AKEL and the government were “immersed in corruption” adding that the party was considering filing a libel suit against him. AKEL’s indignant spokesmen did not bother informing the public which the lies were, apart from the obligatory denial to the charge of corruption. It was enough to declare Orphanides a liar and repeat the official propaganda that the banking crisis was exclusively the result of his inadequate supervision of the banks.
But was it? In the interview Orphanides, repeated the series of events that led to the need for a bailout, which could have been avoided had President Christofias agreed to the fiscal consolidation measures that his finance minister had told the European Central Bank the government would take by the end of May 2012. The finance ministry prepared a raft of measures that would ensure the fiscal deficit for the year would be brought down to 2.5 per cent of GDP (Christofias had also signed an EU agreement to this effect earlier) as he had promised the ECB.
Had the measures been passed, the ECB would have carried on accepting Cyprus government bonds as security for providing liquidity assistance to the banks, as it had done in the case of Greece and Ireland. But Christofias, in his wisdom, vetoed the measures despite Shiarly having secured the support of the opposition parties, declaring that he would not take any more measures against the workers and that it did not matter if the deficit was higher than the 2.5 per cent he had officially agreed to. Before the end of June the government was obliged to seek a bailout so that the banks could draw liquidity from the ECB.
Are these lies? No, these are the facts which not even the government and AKEL propagandists could deny. It is true that the banks, in particular Laiki, faced serious problems but these could have been manageable if the government kept its promise to undertake fiscal consolidation. This would have allowed it to carry on using its bonds as security at the ECB and the eventual bailout needs would have been much smaller. But instead the government played up the problems of the banks, so as to shift attention away from the president’s criminally irresponsible choices.
A president and government that are considered totally untrustworthy by all our EU partners, because they have repeatedly failed to honour agreements they made, have a nerve calling anyone a liar.
