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Cyprus Internet Directory [ Six thousand on list of those who transferred money out in March ]

Six thousand on list of those who transferred money out in March

George Psyllides

THE Central Bank of Cyprus (CBC) yesterday handed lawmakers a list of 6,000 companies and individuals who withdrew money from Cyprus up to 15 days before a controversial Eurogroup decision to force losses on depositors as a condition for a €10 billion bailout. 

However, the chairman of the House Ethics Committee, who was due to look into a list detailing transfers of more than €100,000 from the two major banks - Bank of Cyprus (BoC) and Laiki - said the list fell short of what he had requested.

"It was with great disappointment and anger that, when we opened the envelope, we realised it contained data for only 15 days even though we had asked for a year," MP Demetris Syllouris told reporters. "This kind of behaviour is unacceptable."

The amounts transferred were in the region of tens of millions, Syllouris said.

In a letter to Syllouris, then Central Bank (former) deputy governor Spyros Stavrinakis said he was only attaching a list of individuals and companies who transferred money out of Cyprus between March 1 and 15 this year.

"We believe your request would lead to a huge volume of information, which would possibly not help the aim of your committee," Stavrinakis said. 

This included foreign companies that transfer large sums of money each day, as well as Cypriots who bought property, he said.

Syllouris said the CBC governor’s behaviour was unacceptable and that he would summon Panicos Demetriades to appear before the committee and explain why he refused to hand over all the data.

Syllouris said the list would not be given to MPs or parties because it was incomplete. And it would not be made public before the reasons for the withdrawals were determined.

Cypriot banks were shut down for nearly two weeks to prevent a run on deposits by panicked savers, after a March 15 bailout deal Cyprus struck with the European Union to save it from bankruptcy forced small and big depositors in all banks to bear part of the cost.

Parliament rejected the deal and a new one was struck a week later, which saw the resolution of Laiki and forced losses on uninsured deposits – over €100,000 -- in BoC, which could reach 60 per cent.

Banks reopened on March 28 under tight restrictions and a cash withdrawal limit of €300 per day, but disclosures that capital was shifted out of the island in the run-up to the lockdown on March 15 fuelled public anger and prompted parliament to 


It did appear however that the government had been expecting, or maybe preparing for some sort of haircut on deposits before the Friday March 15 Eurogroup meeting.

In an interview on private TV station Sigma, Attorney-general Petros Clerides said he had been asked on Friday morning to prepare legislation regarding a haircut on deposits.

“Two senior finance ministry officials came to my office with instructions to prepare legislation,” Clerides said. The island’s top lawyer said they left some gaps in the bill to be filled later, without clarifying.

“It did look like the situation was very bad but everyone expected or hoped that it would be avoided at the last moment,” Clerides suggested.

Former ruling party AKEL jumped on the opportunity and accused the government of knowing in advance despite their declarations to the contrary and despite pledges they would never accept a haircut. Essentially they accepted it however before the Eurogroup even met, AKEL MP Stavros Evagorou said.

He also censured President Nicos Anastasiades for not consulting with other parties before departing for Brussels that weekend. 

Government spokesman Christos Stylianides said Anastasiades found out about the lenders intentions during meetings with the heads of the IMF and the ECB when he got there.

“Anyone attempting to muddy the waters by saying unreal things was effectively trying to hide their own responsibilities,” Stylianides said, suggesting that the previous administration knew full well what was going on.

The haircut on deposits as a means to recapitalise the island’s stricken banks had been mooted repeatedly during the previous administration’s tenure, and especially towards the end of the year and through January.

Chairman of the House Ethics Committee, Demetris Syllouris, received the list yesterday (Christos Theodorides)

(Source: Cyprus Mail)
Copyright © Cyprus Mail 2008 Please contact Cyprus Mail for the copyright terms of this article.

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