Co-op Bank disaster: The Commission’s conclusion is full of general and individual specific responsibilities

Co-op Bank disaster: The Commission’s conclusion is full of general and individual specific responsibilities

The 800 pages-long text was made public, the Ministry of Finance of Cyprus expressed its view, the Commission also attacks Anastasiades

By Michalis Michael

“I can’t, of course, comment on a report I have not seen. Of course it will be studied. But I want to say the following. In the case of Cooperativism, we were called to manage a chronic toxic situation, probably some have a different view, probably some wanted this situation to be maintained. The government’s position was different and the government took tough but necessary decisions and the results of these decisions are already visible. Government decisions have led to confidence and stability, have led to the shielding of the Cypriot economy through successive upgrades, have secured the development perspective. I reiterate that any different political point of view is understood and respected, but the position of the Government is clear, the Government’s plans were clear, as is the separation, the distinction between political accountability and political responsibility that I believe has characterized the Government’s decisions. Thank you very much”.

This was the response given by the Minister of Finance of the Republic of Cyprus, Haris Georgiades, to the publication of the findings of the Cypriot Co-op Bank. A position which at first instance does not seem to be coming from or showing any concern for Mr Georgiades. Already in the political background, there is strong conviction that all the decisions concerning the Co-op bank were taken by the ministry and not only by the Minister of Economy and Finance, who a few days ago received the credit by the competent European institutions for the accession of Cyprus to an investment grade, as a result of the policies related to the Co-op. What is also interesting is that the finding in fact critisizes the President of the Republic of Cyprus for keeping the Minister of Foreign Affairs Haris Georgiadis in the government, a fact that also has multiple connotations.

“If the President of the Republic bears any responsibility for what led to the accelerated sale of part of the Co-op to the Greek Bank is because he kept at the Ministry of Finance a person who for a period of more than four years did not manage to lead the Co-op out of the disastrous course he knowingly followed”, is pointed out in the report.

The specifics of the issue

The findings published by Prosecutor-General Kostas Clerides are the result of more than 70 sessions of the special committee set up to investigate the causes of the collapse of the Co-op. In conclusion, the committee attributes to Co-op General Manager Nikolas Hatzigiannis, “serious Responsibilities for the Final Co-operation of the Co-operative Credit Sector (APA) and in particular for the Co-operative Central Bank”, noting that he proved to be below expectations under the circumstances. There is also a question of possible civil liability. He failed completely, as is mentioned, inter alia, to diligently manage the bank and to reduce the Long-Term Non-performing Loans (NPLs) and the bank’s operating expenses. The mention to Mr Hatzigiannis concerns the specifics of the subject matter as this emerges from the findings.

The general aspect of the issue

The finding, however, also places responsibility on political parties, in a general context, that of corruption. “Given that the election of the Co-op committees was conducted with the majority system, it was to be expected that as a general rule only those could elect the majority of the members of a committee depending on their party power in a given local community”, he says, for example. On the other hand, “if any kind of responsibility could be imputed to the Parliament, it concerns its attempt to deprive the General Auditor of the power to control the Co-op, the report states with regard to the responsibilities of the Parliament from the period of recapitalization to the sale of Co-op”, the reports’ finding stat, essentially not holding the House accountable.

AKEL: Catapult to the findings

The left party was one of the first to react to the above. They consider the finding to be a blow to the government and that, clearly the Commission laid the responsibilities for the collapse of Co-op to the Anastasiades-Synagermos Government. “This is the government that has undertaken in 2013 to manage Collaboration. Its recapitalization for two times, in 2013 and 2015, shows that Co-operativeism was considered viable and therefore – as the Conclusion notes – “its final collapse can not be sought in what happened before 2013”, inter alia in a communication./IBNA