BoC chairwoman’s refusal to resign causes headache to the Presidency and Legal Service

BoC chairwoman’s refusal to resign causes headache to the Presidency and Legal Service

Nicosia,  March 23, 2015/ Independent Balkan News Agency

By Pandelis Diomidous of MAXHnews

The possibility of having to remove the chairwoman of the Central Bank of Cyprus Chrystalla Georghadji is causing great concern to the Presidential Mansion, even if this is not made publicly known.

The insistence to not facilitate developments with a voluntary resignation led to decisions that involve risk and which mainly hinder the effortless functioning of the Central Bank with negative consequences for the economy. And all this at a time when everything seemed that the “reef” of divestments would be overcome and the Republic would return on an implementation track regarding its commitments, paving the way for a return to bond markets and thus the release from memoranda and international lenders.

Anxious of the finding

Very reliable information of MAXHnews indicate that both the Legal Service and mostly the Presidency are anxious about the outcome of the independent criminal investigation by Panayiotis Kallis in relation to the alleged corruption of the Deputy Attorney General Rikkos Erotokritos.

Sources knowledgeable to the preparation made for a possible appeal to the Supreme Judicial Council argued, according to MAXHnews, that this is an uncertain step that involves too much risk and that under no circumstances could it be considered as a successful decision for a change to the Supervisory authority. “On the contrary, a possible finding of Panayiotis Kallis that Christalla Georghadji committed the offense of slander against the Assistant Attorney General would assist and surely enrich the background of the facts, which together with the legal background, would increase expectations for a positive decision by the Judicial Council on the termination of the Chairman”, sources from the Legal Service told MAXHnews.


At the same time, the Presidency, in full cooperation with the Legal Service, monitor with interest the fortifications movements of Chrystalla Georghadji, such as the one to challenge the finding of the Auditor General. “This shows how she feels and that things are going against her, that is why she is trying to create a legal basis to deal with possible developments”, noted a government source which recommended patience in view of new developments.

At the same time, however, in the Presidency they are trying to use the European climate in their favour, as it seems that in the last few hours there is confirmation of the information that despite the initial reaction of the President of the ECB Mario Draghi, in Frankfurt is prevailing a climate of discomfort for the turn things have taken in Cyprus.

At the Presidential hill, they even take very seriously the fact that any decision of the Supreme Judicial Council in Cyprus is subject to the examination and judgment of the ECJ. “If we do not prepare the ground properly, we may find ourselves before unexpected developments that will substantially harm the image of the Cypriot economy. We cannot send the message that we stand against the European institutions because it would be a big setback in the recovery effort of our credibility”, sources from the Finance Ministry were saying.

The time factor

Of huge importance for the Presidency and the government is the time factor. While the Attorney General Costas Clerides is making it clear that there is no specific timetable, as the case should be properly prepared, in the Presidency they know that there needs to be a development as soon as possible. “This uncertainty, more than anything else, stalls developments within the Central Bank and not just there”, noted a government source who did not hide her concern since “this period is the most critical for the course of the economy”.

“It would be desirable, in the very near future to have a conclusion on the issue of divestments that will bring the Cypriot program back on track and at the same time to have a new face at the helm of Central Bank, who will have an open line of communication and understanding, so as to proceed quickly to all the required actions that will allow us to move away from dependences and programs by the end of this year”, the same source concluded meaningfully.

Stavros Zenios showed the way

Under the weight of dramatic developments at the central bank, the member of the board of directors of the supervisory authority, Stavros Zenios, voluntary resigned last Friday. Announcing his resignation from the governing body, the former Dean of the University of Cyprus has left a clear innuendo about the situation as it stands.

“I cannot remain as a passive member of an institution that is satisfied with an administrative logic of just following procedures, rather than creating policy and influencing decisions at local and European level, leading to the exit from the crisis”, he noted in his post on a social network.

This position appears to reflect the view and the government, which commenting behind the scenes the decision of Zenios, indicated that it is a step down the right path. “Other members of the Board of the Central Bank could facilitate developments with similar actions”, noted the same source, essentially wanting to send the message that a collective resignation of the Board would increase the political pressure against Georghadji, which ultimately, might be a way out of an endless judicial process.