FOREIGN media gathered en masse at Eleftheria Square early yesterday anticipating trouble outside the island’s two major banks when they reopened at noon, while inside heavily-guarded employees thought they would be facing the most daunting day of their careers.

But as it turned out, in some instances, the number of reporters was far greater than those queuing up at the banks.

Bank managers appeared just before the doors were to be opened at noon to plead with people to remain calm, not to push, and that up to five people would be permitted inside the bank at a time. 

“I’m calm, like the others around me, we know that it’s neither the person in front of me’s fault neither is it the bank employees’ fault,” Giorgos Theodorou, a 48-year-old said. “We realise that they could be without jobs soon and we feel for them,” he added. 

Theodorou said despite the calm, he felt a strong sense of desperation at recent events and hoped those responsible for putting Cyprus in its current position would be found and punished.

“Queuing up to be served at the bank isn’t particularly a problem, the problem will be what does the future hold for our economy and for our jobs,” 30-year-old Andreas told the Cyprus Mail. “Now the banks have re-opened we will see what real problems we will be faced with,” he said. 

“The banks have been closed for a long time so it’s perfectly understandable that there are queues and upset people, but everyone is calm and there won’t be any problems because we are civilised people,” he added.

Giorgos Antoniou, 52, believed there would only be one or two days of large queues and then everything would go back to normal. “If there are no more cuts on our deposits then I don’t think anyone will react angrily while queuing but if make more cuts then that’s when violence could potentially break out,” he said. “I came to pay my bills and withdraw some cash to pay my dentist who I owe some money to as I had run out of cash,” he added.

For 58-year-old unemployed Savvas, queuing up outside Bank of Cyprus was unfamiliar and although he was angry at the whole situation he felt it would not achieve anything if he caused trouble. “I have been unemployed for around four months now and I came to deposit two cheques into my account and withdraw €300 to survive,” he said. 

“The politicians and the banks have a lot to answer for as they did not put the correct measures in place to protect people’s money,” he added. “Everyone here in the queue knows that the employees aren’t to blame and so there’s no point in showing any animosity towards them so we might as well just get on with our business,” he concluded.

Although largely unaffected by the levy on deposits or the closure of Laiki, 57-year-old cashier at Carrefour supermarket, Iordanka Ivanova was unsure what tomorrow might bring. “This situation has caused a lot of uncertainty and although I’m aware of the capital controls in place it doesn’t help me feel more secure about my money being at the bank,” she said.

For customers at Hellenic, USB and Co-op banks there were hardly any queues but the Mail did manage to ask two customers outside the French giant Societe Generale who were waiting to be served. “I’ve not had to live through war-time like some of my older compatriots but this certainly does feel like we are at war of some kind,” 24-year-old architect, Constantina Hadjicosta said. “We will just have to get used to queuing up outside the banks until the capital controls are removed,” she added. 

For the staff of Laiki however, the future is uncertain. “There is plenty of uncertainty and restlessness within the company as we keep hearing about different scenarios, if we’ll end up on the unemployment line or at Bank of Cyprus if the two banks end up merging,” 40-year-old employee Patroclos Pantelas said. “There is a general panic in Cyprus right now and my thoughts are with my colleagues who will have to deal with the public in the coming days and all we can hope for is that everyone will stay calm and understand the situation,” he added.

Due to the banks being closed since March 15, state pensions, payments from social insurance and seasonal governmental employee wages will be transferred into accounts on April 2. Civil servant wages and pensions will be transferred on April 3.

Foreign media swarming all over Eleftheria Square

Dear folk of Cyprus, no matter which country in Europe the euro crisis threatens the livelihood of the people, I always see the same sequence...angry people, going on the streets to demonstrate against Europe and Germany.
I want to tell you some facts about Germany, you maybe don't know. On average we have less private money than people in south Europe. We have to work more than 40 hours a week and have to work till the age of 67 - soon to the age of 69 - and then get 40 per cent of our final salary. Please don't misunderstand, I'm very sorry about you in this situation but you have to understand us too.
We work hard to earn money for us and our families, and now as well to pay for the people all over Europe, and then we are thanked by calling us Nazis. Why don't you hate the bankers or your previous governments?
The Germans have no problem with people from Cyprus, Greece, Spain or the other states in Europe with the same problems. But we have problem with being offended.

Sebastian Fehr, Germany


l

The negative fallout from the polarisation in the European Union has its first real victim - Cyprus.
Cyprus needs the strength which comes only from strong political leadership and unity among its people. Cyprus: Do not be afraid! Take a stance and show the world how to rise and demand justice; the weary, trodden-upon citizens of Europe will follow. You already hear their voice; they say, "Today, we are all Cypriots".
Cyprus has raised its voice and seeks justice. The European regime must rethink its approach. They accuse Cyprus of supporting and allowing money laundering activities originating in Russia. If this is true, then EU should turn against those involved in such activities, and do not criminalise the entire nation.
It is correct that Russia and many other respectable European nations (chiefly Britain) have considerable investments in Cyprus. This is good (Thank you Russia! Thank you British tourists!). This is yet another good reason for the EU to consider the views and goals of these investors before trying to impose its ‘fiscal regime’ on Cyprus.
 Here is some brief advice for Cyprus. Be grateful, fellow Cypriots, to all of our foreign investors, whether they are corporate clients or simple holidaymakers. We are blessed with a beautiful island which is the envy of many. Let’s protect our assets, our land, our environment, our culture and our families and the world will come to us.  Europe will thank us for initiating change.
The current crisis is much less serious than what followed the Turkish invasion in 1974. We simply have to live within our limits until we recover. This can be achieved as long as we do not mortgage our sovereignty.
 
George S. Chrysomilides (Ph.D),
Trade Economist and Former Professor,
University of British Columbia,
Canada

I have read the whole comment of Timothy Spyrou "In defence of the German view", and just want to leave a few words to him and maybe some readers of Cyprus Mail.
I am working for the European Section of the German foreign ministry and have to admit, that I am very touched.
First I have been really sad about all the negative reaction from Cyprus after I checked lots of different news from Germany and Cyprus.
Seeing the European Union falling apart due to people losing the view for the big idea and trying to blame this great idea for all their national mistakes, have become very popular in Europe.
But then I saw this article and once I started, I had to read it to the end with raising impressions.
The very detailed view needed to be taken for a complex issue like this crisis and the relation between Cyprus and Germany within it.
Germany is indeed a very sensitive country when it comes to its past, and even though people have to suffer right now, we are far beyond the cruelty of those very dark times... and hopefully always will!
The article of Mr Spyrou tried to look at the other perspective, and that is always a great attitude. Furthermore I have to admit, that even as a reasonably well educated German, it would have been very hard for me to put it in such suitable words, as the author did.
I am grateful in the name of our nation, that some people stay reasonable and focused and see the dilemma we are in. Every taxpayer would rather like his money to be spent on his own country. It is always difficult to make people understand, that it is even worth to invest (the main part) in an EU budget and beyond that to pay billions of extra euros to numerous member states. One may ask what they were doing with the money they got from us in the first place. That is just the "easy general understanding" of way the German people feel.
I wish you all the best in the times to come. Stay brave friends and thanks for the nice article Timothy!
Tom Linder, Berlin

Cyprus has just lost its inherited right to decide its own destiny...
Under the present situation brought about by the inability to govern the nation wisely by all previous governments, banking greed, corruption, kommatokratia (politicocracy) union intransigence and the absence of the Rule of Law, they have all played a part to bring about the present situation.
The troika is now here to devour the soul of all Cypriots, bit-by-bit like a cheese in a trap and nibbled. The hidden agenda of the EU has finally been revealed: Cyprus was specifically used as a test case and the bailout was simply a pretext for what's to come next! EU-troika now has the green light to apply identical conditions on other member-states who face similar financial difficulties. Who is this troika that now uses loans facilities as "weaponry" to take over entire nations? That question needs to be kept in mind at all times.
Their long-term plan is to enforce a debtocracy upon the nation through austerity measures and additional loans, loans Cyprus will never be able to repay - just like Greece. This trap is called Colonial Capitalism. It is a geopolitical game of control and will not stop until our EU-troika "friends" ensure we will never escape their economic and social subjugation.
It is imperative for Cyprus to get out of the euro and the sooner the better. If it wants to survive as a nation and not remain an EU province, it needs to make drastic political and economic changes.
Prominent names have been expressing similar views. They all advocate a well-organised exit from this failed institution. People are searching for that elusive justice and if a referendum was put to them today...Cyprus would choose not to be part of the EU.
Andreas C Chrysafis,

I would like to propose the following: That the government of Cyprus take the European Central Bank / troika  to the European Court of Human Rights on grounds of purposefully (or negligently) destroying the economy  of an EU member by threatening to withdraw ELA within an unreasonably short time frame, resulting into an unprecedented act of human rights violation against the people of Cyprus and risk plunging the nation into a humanitarian crisis of immeasurable proportion. 
Lilian Tsappa, PhD, California, USA

After visiting Cyprus a couple of years ago it is not without great empathy that my wife and I are observing what is happening on your beautiful island.
We were particularly impressed by efforts in the south of the island that illustrate the unfair division of an island that was deemed a strategic tool of powerful leaders over hundreds of years. Your museum of unity reminded us a lot of the division of Germany that is happily over, and the stolen property from churches in Cyprus that were robbed of beautiful icons shows that there are too many ruthless individuals in this world.
However, when I see people on the streets in Cyprus finding solace in German bashing I am irritated. How many Germans managers in the banks of Cyprus were instrumental in making the decisions that have landed them in big trouble?
I would like to ask these people a simple question. If, let's say, Malta was in the same kind of financial trouble that Cyprus is, how many of these people were prepared to increase the national debt for the people of Malta?
I heard one observer making the statement that Cyprus's business model was not unlike that of Luxemburg. Why then does Cyprus need money and not Luxemburg?
Martin Meyer, Germany

In my 66 years of life the most important thing I have learnt is that Whatever we do and no matter how hard we try, we will not be able to have any control or effect on the past. Any energy and aspirations we have has to be channelled towards the future. If mistakes have been made, we must learn from them.
I am a Brit who has lived in Cyprus for seven years, an island that I love and if there's anything I have learnt, it is that the Cypriot people are good honest people who will rally round together and fight back in any adversity.
Cyprus is a jewel in the crown of Europe, not a sore on its backside as some might have us believe. The hearts and minds of the Cypriot people are king amongst the European people.
They picked themselves up after the 1974 invasion and fought back against extraordinary odds to put their future back together again and they will do it again... believe me. I for one am proud to live amongst them and I will stand with them in their efforts to rebuild their country’s economy and show the rest of the world that although Cyprus is small, they must never underestimate the size of their hearts and determination. 
God bless you Cyprus.

LFB, Larnaca

I lived in Cyprus for 10 years before recognising that Cyprus was following Greece into a financial abyss, at which point, in 2010, I decided to sell up and get out before the muck hit the fan.
Now as I read the Cyprus Mail online I see that once again Cypriots are blaming the EU or Germany or anyone else but themselves for creating the current financial meltdown.
It was obvious to anyone who took the time to look, even to a clown like former President Christofias, that the Cyprus economy was in freefall, due the an excessively overmanned and extremely overpaid civil service, failure to control the trade unions resulting in high inflation, joining the EU for the wrong reasons – expecting it to instruct Turkey to leave northern Cyprus as a condition of their entry into the EU - and also the failure to devalue the Cyprus Pound by at least 30 per cent before entering the single currency.
When I asked a Government Minister why they had not devalued his reply was that this was because of the loans from foreign governments who would not allow them to repay the loan in devalued Cyprus pounds, which is of course nonsense as any foreign loan would have to be repaid in the currency of the lender, and by buying foreign currency on a forward basis.
Cyprus could also have protected itself from the impact of devaluation on loan repayment. This would also have had a major impact in holding down costs in the tourist industry resulting in Cyprus being much more competitive than it is now.
I would suggest now that Cypriots need to wake up , recognise that Cyprus is not the centre of the universe, and take the tough and uncomfortable measure to put their house in order, otherwise in a few years time the economic problems will still exist and the next bailout will either be central control from Brussels or being expelled from the EU leaving Cyprus to implode.
Cyprus has a wonderful opportunity to turn things around by correct and effective utilisation of the anticipated income from the Gas fields around the Island but please don’t employ the president’s second cousin ex-farmer or goat herder to run the operation as they have done for years with Cyprus Airways.
The future is in your hands, stop blaming everyone else, cut out corruption, reduce the influence of the trade unions and work harder for less money and maybe just maybe there can be a rosy future for the lovely island you all live in.
Geoff Pudsey, UK

Amongst other things, the long-time love affair and worship of all things Hellenic has certainly brought Cyprus to her knees as the economy of the island crashes.  This tragicomedy being played out here reminds me of the cautions of the Ancient Greeks about hubris and the inevitable Nemesis. 
Let’s hope that retribution for the crimes of fraud and corruption result in the reconstruction a more just, sustainable island society, one that responds to the needs of the people, not to the Kleptocracy that Cyprus has become.  This self-inflicted wound, from which we all suffer, is the result of unrestrained greed.
We can only hope also that our unique endemic sub-species homo cypriensis rusfetica will bite the dust and become as extinct as the dinosaurs that they resemble.  It’s up to residents of Cyprus to ensure that this Mass Extinction Event occurs now. 
Linda Leblanc, Peyia

As an ex enthusiastic Europhile I would like to address this letter to the troika and fellow members of the ‘European family’.
Thank you for the life saving bailout but I should like to remind you that it is not a handout but a loan that will be repaid with interest, even though you have decimated our banking sector and economy.  I heard one of you say, and I quote; "The euro is saved, you [Cyprus] have not died in vain".  You could have added: "And we sure screwed the Russians".
Well, your shortsightedness, domestic political considerations and vindictiveness have not only plunged the people of this small island into years of recession and hardship, but taken another step to destroying that great "ideal" of a prosperous, united Europe, at peace, without borders and with a single currency.
Yes we have made mistakes and our politicians have let us down, time and time again, but what country hasn't?  The stronger, more fortunate members of the EU have chosen to make an example of this unfortunate little island, in order to terrorise other small, less fortunate ones into obeying their demands.  That is not the way to bring together all the diverse nations of the EU.  You did not succeed in subjugating the smaller nations of Europe with military might and you will not succeed with financial might.
In our long history, many have come and exploited us and some have thought of us destroyed before, but we have always risen from the ashes.  We shall do so again, much stronger and better.  I don't have the same optimism for that "great European Ideal".
Excuse the mixed metaphor and allow me to say; you have not won a battle but placed another nail in the coffin of the European dream - shame on you!

PD, Prastio

FROM WARZONES and areas struck by natural disasters, Cyprus’ Volunteer Doctors have returned home to provide mostly free care for the needy during the island’s current crisis.
The non-governmental organisation (NGO) has over 20 years experience in war-torn countries like Sri Lanka and Syria as well as helping in the aftermath of the earthquake in Haiti three years ago. And now their small clinic, situated behind the famous Mitsides factory in old Nicosia, provides a high level of healthcare to the unemployed and the needy.
One of the doctors, George Macriyiannis, explained that the clinic is currently a small operation which is only running in Nicosia for the time being but plans are in place to open in other districts.
“We are hoping to expand but first we need to gain experience as we have only been open since March 9,” he said. “Presuming that the Nicosia clinic is successful we will contact our other members and colleagues in the other districts to make arrangements to open there too.”
Macriyiannis said that there has been plenty of interest from both doctors and nurses wishing to contribute to the work done by the organisation.
The Volunteer Doctors have kept a relatively low profile until now and although they have appeared on both state television and radio, Macriyiannis shied away from having his photograph taken for the paper.
“Those doctors involved with the organisation don’t do it for the publicity. They do it because they want to help people out, especially those than can’t afford proper medical care,” he said.
The clinic has been fitted with modern technology and stocked with sufficient medicine.
“We offer a high level of care here at the clinic, as you can see we have an ultrasound machine which can detect heart and stomach problems and medicine supplied by the pharmaceutical services,” Macriyiannis said. The clinic also has the capability to check patient’s blood sugar levels and nebulisers to administer medicine to asthma sufferers.
“Last week we had an incident where a man came with stomach problems and we detected two tumours on his liver and sent him for a consultation at Nicosia General Hospital, all free of charge,” he said.
Macriyiannis explained that if a problem is detected then patients can be sent to Nicosia General Hospital or private doctors that specialise in the patients’ particular problem.
“Small operations are often free-of-charge and in the case that a patient needs a bigger operation a special knockdown price will be discussed,” he said.
Through the organisation’s connections patients can usually receive free specialised blood analysis, X-rays, CT scans and MRI scans as long as there is not a large demand for those services every month. “Again, with analyses, X-rays and scans we can either offer them for a lower price or even for free depending on the amount of cases we have per month,” he added.
Volunteer Doctors operates through peoples’ generosity, good will and annual donations from its own members which number about one hundred. Macriyiannis said there is a €30 subscription fee for doctors who are members of the organisation but that it also receives donations from private companies and the public.
“We also organise fund-raising events like concerts, theatre productions and even a bazaar,” he said.
“The government also provides some help by giving plane tickets and other products that go on offer during fund-raisers,” he added. The organisation also receives a large amount of free medicine from pharmaceutical services.
Macriyiannis met with Archbishop Chrysostomos II recently to ask for assistance from the church and despite the current turmoil, the Archbishop promised he will give funds to the organisation.
The clinic is open to the public between 9am and 3pm on Saturdays and Sundays with one pathologist and one paediatrician posted on a given day to treat people who need immediate attention.
The organisation expects to eventually be seeing about 50 people a day.  
A total of 11 pathologists, cardiologists and four paediatricians are on board to work on a rota, Macriyiannis said. A doctor will typically work one day a month.
He added the service would be available “for as long as necessary”.
People are asked to display proof of being unemployed or evidence of earning less than €850 a month. They are also asked to come with documentation of their medical history, including what medications they take.
“We don’t want our contribution to be just symbolic, but rather help our island substantially, that is after all the reason we offer the service and have returned from abroad,” said Macriyiannis.

Find out more at www.volunteerdoctors.org.cy (Greek only).

Equipment for the new clinic includes ultra sounds

THE TV CAMERAS and journalists have now mostly left and Cyprus has slipped from the front pages to the finance pages of most international newspapers. Yet, for nearly two weeks the island had to deal not only with its worst crisis since 1974 but also with the world’s media, hungry for tears and riots.
 They were mostly disappointed.
 On Thursday, the day the banks re-opened after a 12-day hiatus, the scene on Nicosia’s Ledra Street was a fascinating spectacle. Conveniently home to big branches of both Laiki and Bank of Cyprus and a busy shopping street, the street had been a magnet to foreign media since the start of the crisis.
 Hours before the banks were due to open at noon, TV cameras had virtually overtaken the top of the street eagerly awaiting a bank run and a rush of irate customers when the banks opened.
 When the time came, all the cameras got were shots of modest lines of people. There were no tears and no riots, and it was arguable who outnumbered whom: the journalists or the banks’ customers.
 Instead, the foreign media became a spectacle in their own right with locals regularly checking in on what one person called “the media circus”.
 Their presence was even the source of a one-man protest by a German resident holding a banner outside the Laiki bank.
 “Why must international media be so greedy for horror scenarios?! Is decent and investigative journalism dead? Solidarity with the people of Cyprus, NOT their banks!” read his banner.
 The man, who did not want to be named, said he was “fed up with the international media”.
 “The cameras have been stationed here for two-three days fighting for the best spot. They are like vultures,” the man said.
 None of the journalists paid him any attention, instead making the most they could of the disappointingly  modest and orderly queues of people there to withdraw money.
 Foreign media started to arrive on the weekend of March 15 and 16, following an agreement with the eurozone’s finance ministers to impose a bank levy for all depositors, spooking the markets at the unprecedented sanctioning of what would have been a haircut on all deposits including those under €100,000.
 And when parliament rejected that bailout proposal last week on Tuesday, the foreign media’s interest intensified as bankruptcy loomed if a deal was not found by March 25.They then stayed on to cover the aftermath of the final deal and - for them - the damp squib of the opening of the banks.
 After covering the usual angles - Russians in Limassol, the grandstanding in the parliament and the tragic tales of individuals who stood to lose family businesses and fortunes - they started to get desperate for angles.
 The BBC was a case in point. At some point this week, they were so desperate they had even resorted to filing reports on the Cyprus problem!
 At times, the determination to make the story fit a reality the media wanted to find became outright misleading.
 One news agency filed a photograph last weekend of locals doing their shopping just before the closing time at the open air market in Nicosia by Ochi roundabout. The caption said, “Cypriots buy left over cheap groceries on Saturday as banks have been closed for five days, cutting off funds for many.”
 Although both statements were true on their own, put together they suggested that people were buying cheap produce because they were now poverty stricken. But, as any local will tell you, there are always people looking for cheap vegetables and fruits at the end of any market day.
 Some of the exaggeration was just plain funny. In one Daily Mail report this week, under-funded, run down Pallouriotissa on the outskirts of Nicosia was transformed into a “smart suburb”.
 Then there was a journalist for a New York based publication looking for a solidarity or “people pulling together in a crisis type” of story. She was told about tomorrow’s all-day solidarity concert with performers singing without pay in return for food and items to be given to community markets in all cities. But that did not fit with her “reporting needs”. Nothing less than homeless people queuing up for food would do. That is, as yet, not a story in Cyprus, despite the increased use of community markets.
 There was no bank run on Thursday, and while the president thanked Cypriots for their maturity and responsibility, it made for rather staid coverage internationally.
 But Cypriots were overjoyed.
 In the words of Giorgos Theodorou, 48, who was queuing up outside a Laiki branch: “We want to keep our dignity and show all of the foreign media filming us that we are a civilised nation.”

Camera crews on Ledra Street waiting for the bank run that never came

CENTRAL Bank governor Panicos Demetriades has become everybody’s favourite whipping boy during a week of recrimination over the harsh bailout terms imposed on the island.
 Cries for the banker’s removal picked up pace, culminating in the tabling of a parliamentary resolution on Thursday, which was however postponed after MPs had second thoughts.
 With tempers running high - a great time for political grandstanding - Demetriades may have become a soft target, a scapegoat for all those anxious to vent their anger somewhere, anywhere.
 Meanwhile the administration, far from backing the governor, has encouraged the anti-Demetriades sentiment. In a thinly veiled criticism of Demetriades, the government spokesman spoke of a greater need for cooperation between the Central Bank and the executive. DISY soldiers were less forgiving when speaking to the media.
 This state of affairs may suit the government just fine, as focusing on one man draws attention away from itself. The fact Demetriades was appointed by the previous AKEL administration certainly plays a part.
 But in all fairness, the central banker is partly to blame for drawing the ire - it would seem - of an entire nation.
 His overall handling of the banking sector over the past fortnight has left a lot to be desired. On March 18, after the first haircut decision - on all bank deposits - at the Eurogroup, Demetriades wanted the banks to re-open the following day, but President Nicos Anastasiades put a stop to it because allowing the banks to open would almost certainly have sparked a bank run.
 Demetriades gave a repeat performance on March 25, when it was quickly leaked that he intended for the banks - apart from Laiki and Bank of Cyprus - to open without capital controls. A reportedly livid Anastasiades summoned him to the presidential palace and convinced him otherwise.
 The Central Bank chief’s popularity ratings plunged further after he caused panic by announcing that an administrator would be appointed to run the Bank of Cyprus, omitting to mention that this had nothing to do with winding up the bank.
 By the time the mess was cleared up, hundreds of angry bank employees had converged on the Central Bank fortress. They held up placards reading: “Demetriades: traitor” and “Demetriades go home.”
 On the same day, Demetriades held a joint news conference with the finance minister in an attempt to set the record straight and calm nerves.
 He claimed that as soon as he took office he had pressured the previous government “in a polite way, and with data”to apply to the support mechanism.
 In May 2012, the government of Demetris Christofias - with parliament’s consent - issued €1.8 billion in shares to prop up the bank. At the time, Laiki had already racked up billions in emergency liquidity funds from the European Central Bank, and to those in the know it was obvious which way the wind was blowing.
 By taking recourse to the support mechanism in June, the near-bankrupt Laiki could carry on drawing cash from the Emergency Liquidity Assistance (ELA) until an overall bailout was signed.
 In late 2012 the ECB decided to pull the plug on emergency liquidity assistance to Cyprus banks unless a memorandum for a bailout was agreed by January 20. Demetriades informed former President Christofias of the ECB decision in writing. A memorandum was signed between the government and the troika in November, but the final bailout deal was pending.
 Under a barrage of questions regarding Laiki’s fate, Demetriades on Tuesday revealed that the bank was deliberately kept afloat for nine months, despite its enormous liquidity problems, because the bank had to stay alive until the presidential elections in February.
 Yet in an attempt to deflect the blame, Demetriades was accused of, at best, being too weak or inept and, at worst, of colluding with the Christofias administration. After all, as head of the Central Bank, supervision of the banks is his responsibility.
 The irony was that while he was doing everything in his power to keep the insolvent Laiki Bank afloat allowing it to build up a €9.2 billion debt to ELA, he kept turning the screw on the Bank of Cyprus, several executives of which felt that Demetriades had some hidden agenda.
 “He kept sending letters demanding explanations for everything we did, repeatedly called directors to his office to tell them off and issued instructions to the bank, arrogantly refusing to even discuss them,” said an executive at the bank. “He just issued orders and did not care if these were practical or not.”
 The bank’s top brass were furious with his heavy-handedness and the way he banned all contact between the two banks and PIMCO, the consultants that he had chosen to carry out the investigation of the re-capitalisation needs of the banks and thus the size of Cyprus’ bailout.
 “We gave the data PIMCO had asked for and were not contacted again until its people had decided the level of financial assistance which was presented to us by the governor as the final figure,” said a member of the board. “When we protested he told us that we could meet the PIMCO people to argue our case, but it was too late by then.”
 The governor was stopped from making the figure public, as this would mean it was final, by President Anastasiades, who had been tipped off about Demetriades’ intention to release it to the press by representative of the banks.  
 Demetriades took over the regulator in May 2012, having worked as a professor of finance in the University of Leicester. Critics say he has little to no practical knowledge of how banks operate, no knowledge of how the euro system and ECB operated and even less understanding of the Cyprus economy.
 “The man knows very little about banking and how the banking system operates,” said the Bank of Cyprus executive.
 From the outset, Demetriades sought to drive home the point that all the economy’s woes had been caused by the banks, promising to re-structure them and make them smaller - in this respect he may have been adhering to the European Central Bank’s diktats.
 In early July, it was leaked to a local daily that the recapitalisation needs of the banks would be €10bn: a worst-case scenario signalling that a loan from international lenders would automatically render the country’s debt unsustainable. The Central Bank was suspected to be the source of the leak. The €10bn figure became part of folklore even though at the time no one knew how much the banks would need - PIMCO had not been hired by then.
 This too has been chalked up to Demetriades having a secret agenda, spawning various conspiracy theories.
 On the plus side for him, the governor did warn the former president in November last year that Laiki would collapse if he did not agree to a bailout. The ECB had again warned that it would cut off emergency liquidity.
 The media, both here and abroad, has been rife with reports of a growing rift between President Anastasiades and the central banker. It’s said the government is looking to oust Demetriades, but it has to tread carefully under the watchful eye of the ECB. And complex constitutional procedures make his dismissal difficult.
 No matter where you stand, the very public dispute between the government and the central banker can only do more harm, says political analyst Christoforos Christoforou.
 “This is no time for a blame game, when we should all be united to find solutions to our problems,” he told the Sunday Mail.
 “I feel the acrimony only serves to further undermine any trust the people have left in institutions. It’s like a rehash of the Christofias v Orphanides row, only now it’s even worse because of the crisis,” he said, referring to the strained relations between Christofias and his former central bank governor Athanasios Orphanides.
 Instead, the two sides should try to work things out quietly, away from the cameras.
 “It’s true, Demetriades has shown a certain lack of administrative experience, and was also found wanting on the PR level. It seems that he’s prone to taking decisions by himself, for instance when he did not consult with the government on the reopening of the banks.”
 But these were not his only errors in the last couple of weeks. Bank of Cyprus directors, whom he asked to resign earlier in the week, were incredulous over the way he had conducted negotiations for the sale of its operations in Greece.
 “He did not even bother to ask us for any figures about the bank’s operations in Greece, which would have helped secure a better price than the ridiculously low price he agreed to sell, without even consulting us,” said a board member.  
 Commentator Louis Igoumenides felt that the governor is in a no-win situation: “Demetriades is not a very capable political operator. He’s even managed to alienate AKEL. It’s safe to say that he hasn’t got many friends left.
 “To some extent, he’s caught between a rock and a hard place...on the one hand he’s got to toe the ECB line, and on the other he’s accountable to Cypriots. I don’t envy him.”

Pressure is growing on Central Bank governor Panicos Demetriades to resign

THE COUNTRY’S coordinating council for volunteer groups said yesterday that it may be unable to continue helping out vulnerable groups unless their deposits holding fundraising contributions are exempted from any deposits haircuts.
The Pancyprian volunteerism coordinative council (PVCC) coordinates 287 local and 55 Cyprus-wide volunteer groups and non-governmental organisations offering a wide range of services from psychological support to nursing and giving out basic supplies and food to people.
“A number of PVCC members hold accounts from fundraising and other activities with the goal to support programmes and services offered to vulnerable groups,” the council’s head Stavros Olympios said in a statement prepared yesterday during a general meeting to discuss their finances.
Olympios, who also runs the Limassol Bishopric’s soup kitchen, said that if deposits larger than €100,000 were not exempted from an expected haircut on deposits the bodies holding accounts with affected banking institutions would no longer be able to provide services and allowances to people. They would cease operations and be forced to lay people off, he said.
Olympios did not specify how many bodies were likely to be affected from expected losses to depositors in the Bank of Cyprus and Laiki bank.
“People have already been turning to volunteer groups and that number is expected to grow as they tackle many problems that are already apparent. Organisations are called on to provide food, clothing and basic supplies to an increasing number of people and families because of state (benefits) cuts,” Olympios said.
Olympios called on the state to offer what grants they could via the ministries of health and education as well as social welfare, arguing that because they use volunteers they are able to provide services at lower costs. If the organisations were to stop operating it would cost the state much more to pick up the slack, he said.

AN investigative commission appointed by the government to looking into how the country was led to the brink of financial ruin met yesterday at the Attorney-general’s offices to discuss practical matters relating to its operations, justice minister Ionas Nicolaou said.
The commission consists of former Supreme court and International criminal court judge Giorgos Pikis and former Supreme Court judges Panayiotis Kallis and Yiannakis Constantinides.
It has a mandate to complete investigations within three months with the possibility of extending its inquiry for an additional three months if necessary, Nicolaou said.
Its members swear in on Tuesday in the presence of President Nicos Anastasiades, Nicolaou said.
The committee may investigate any actions and omissions on political, civil and criminal levels, and may consult legal and financial experts as necessary.
Nicolaou said the government would help the commission in any way requested of it.
Insofar as the commission establishes responsibility by individuals, the government’s aim is to see them before court that will decide on the responsibility they bear, Nicolaou said.
Attorney-general Petros Clerides said the investigation would be done by three “more than worthy people”.
The commission’s appointment came amid a bailout deal resented by most in the country for its likely effect to the economy, businesses and for its impact to depositors.

GERMAN Finance Minister Wolfgang Schaeuble has said savings accounts in the euro zone are safe, adding that Cyprus is a "special case" and not a template for future rescues.
In an interview with Bild newspaper published yesterday, Schaeuble distanced himself from comments on Monday by Eurogroup chairman Jeroen Dijsselbloem, who said the rescue programme agreed for Cyprus - the first to impose a levy on bank deposits - would serve as a model for future crises.
"Cyprus is and will remain a special one-off case," Schaeuble said.
"The savings accounts in Europe are safe."
Schaeuble said the problem in Cyprus was that two large banks were in effect no longer solvent and the government did not have enough money to guarantee savings.
"That's why the other euro zone countries had to help," he said. "Together in the Eurogroup we decided to have the owners and creditors take part in the costs of the rescue - in other words those who helped cause the crisis."
Schaeuble said he was confident Cyprus would be able to completely pay back the help. "Cyprus' economy will now go through a long and painful period of adjustment. But then it will pay back the loan when it is on a solid economic foundation."
Schaeuble said the euro was stronger today than at any time since 2010.
"Yes, you could see that during the Cyprus crisis," he said. "The entire turbulence did not have any impact on the other countries in southern Europe."
He said it was different in early 2012, when elections in Greece caused interest rates across southern Europe to rise.
"The financial markets have seen: we are better prepared now. We've accomplished quite a bit," Schaeuble said.
He said he was against thinking about individual countries leaving the euro zone. "What is more important is that we are strong enough to keep everyone in the boat," he said.
"I believe that we will one day read in the history books about this period that the crisis brought Europe even closer together," he said, adding the continent was currently enjoying "a very fortunate era".

'Cyprus will remain a one off case'

THE BANK of Cyprus (BoC) will be in no state to support businesses that are now facing extinction following an effective loss of the majority of their deposits and an inability of the bank to support profit-making businesses, the head of the Chamber of Commerce and Industry (KEVE) said yesterday.
Some 60 per cent of BoC deposits over €100,000 have been effectively wiped out. The Central Bank of Cyprus officially confirmed yesterday that 37.5 per cent of deposits will be converted to shares with a further 22.5 per cent set aside to be used – if necessary – to recapitalise the bank. The remaining 40 per cent is temporarily locked to ensure the capital remains in the Cyprus economy.
A large chunk of Laiki Bank deposits over €100,000 will also be lost following its resolution, and the transfer of its assets to the BoC.
Capital controls are also expected to remain in place for as long as it is thought necessary to prevent capital outflow.
“It is clear that in essence the money that is subject to a haircut through this procedure is not returning to the economy,” KEVE head Marios Tsiakkis said yesterday.
“This means that businesses have nil liquidity to continue their operations,” Tsiakkis said. “Businesspeople will not be able to pay wages, supply products and the like,” Tsiakkis said.
“Given how the situation is being formed, the Bank of Cyprus will not be able to serve businesses. The problems will not be solved but on the contrary, they will be multiplied with unforeseen consequences to the economy,” he said.
Tsiakkis said that the Bank of Cyprus would not be able to support cash flow in the market to enable businesses to continue being profit-making.
The head of the association of Cyprus tourist enterprises, Akis Vavlitis said that a number of their larger members that employ over 500 people would struggle to pay March wages. Suppliers “want payments only in cash,” he said.
“Since there is lack of liquidity, how are hoteliers going to finance their current needs?”
Vavlitis said that some hotel units might not be able to open in the summer, with many hotels paying in upfront deposits from travel agents in the Bank of Cyprus and Laiki. “And now have not a single cent but are of course obliged to respect the contract they signed with travel agents. This will be a vicious cycle. Everything has dried up,” he said.
“I wonder, how is the economy meant to reboot without cash flow?” Vavlitis said.

GOVERNOR of the Central Bank Professor Panicos has suddenly become the most-hated man in Kyproulla, trusted by nobody apart from the foreign technocrats who are here diligently working on reducing the size of our economy by 50 per cent.
He is now everyone’s favourite punching bag (a shame because our establishment had enjoyed the monopoly for months) with senior government officials bad-mouthing him to hacks and even the mild-mannered finance minister Michalis Sarris, who never speaks ill of anyone, diplomatically distancing himself from the beleaguered governor.
The hatred is understandable given the lunatic decisions Panicos has tried to impose over the last couple of weeks, not to mention the eight-month war he has been waging on the banks and appears to have won – Laiki has been closed down and the once mighty B of C has not only been downsized it has been burdened with so much debt it is unlikely it would ever recover.
On Monday night Panicos and his sidekick Spyros Stavrinakis were summoned to the presidential palace at 8pm by the furious Fuhrer who had hit the roof when he heard the Governor was planning to open the banks the next day (apart from Laiki and BoC) without any controls on withdrawals and transfers.
We do not know what form of persuasion he used but by midnight the professor issued an announcement saying the banks would not open and the run on the smaller banks was averted – not thanks to Panicos.

ON TUESDAY senior government officials called in hacks to tell them what a complete waste of space the Governor was and that he had his own agenda.
As if to prove them right in the evening the Central Bank issued a brief announcement stating that accountant and retired banker Dinos Christofides had been appointed administrator of the B of C. When the bank’s employees read this the next day they assumed the bank would be suffer Laiki’s fate and organised themselves into a mob.
The angry mob of bank clerks gathered outside Panicos’ Central Bank fortress shouting abuse at him and demanding his immediate resignation. Another announcement was issued subsequently explaining that the administrator would not wind up the bank but oversee the transfer of the Laiki business to the B of C.
To calm nerves, a joint news conference was held in the afternoon by Sarris and Panicos during which the Governor was asked the million dollar question. Why had he not restructured Laiki last year when he knew it was insolvent instead of allowing it to draw €9.2 billion of emergency liquidity that it would never be able to pay back?
It was not right to wind up a bank one month after becoming Governor, he said. Subsequently, he had raised the subject with the Tof government a couple of times but he was told it would be better to wait until after the elections. He had also asked the government to sign a bailout “politely” in order to save the banks.
In the end Panicos’ politeness was very costly to the country.

DURING the news conference the polite Panicos also explained why he would not resign. “I have no intention at such a difficult time to make matters worse for the country. I enjoy the confidence of the European Central Bank and I am proud of this.”
Enjoying the confidence of the ECB, the organisation imposing the measures that would destroy the country, is not something you make public. It is tantamount to sleeping with the enemy, a bit like the National Guard chief boasting that he enjoys the confidence of the Turkish occupation troops.
He would have won more sympathy if he said “I will not resign because this is my dream job; it pays extremely well, I have a chauffeur and bodyguards, a big fat expense account, it has made me a celebrity and given me social status I could not even dream of two years ago. Why would I resign and go back to being a nobody in a provincial university in a dull English town, driving my own crap car and earning a quarter of what I earn now, at such a difficult time for my country?”

APART from the media and the government, the political parties also turned on the ECB’s local enforcer. Tree-hugging populist Perdikis tabled a motion in the legislature asking for the president to sack the Governor.
Deputies voted in favour of a postponement of the vote after being told by the Attorney-general that a legal can of worms would be opened by such a move and that the ECB, which loves the polite Panicos, might have refused to sanction it.

SO IS HE executing a dastardly commie plan to destroy the evil banks and force everyone to become a customer of the co-ops? A director of the B of C, who together with his fellow directors, was politely forced to resign by Panicos this week said that the Governor “is very confused and under a lot of pressure.” 
This was very charitable, considering that the Governor has now taken effective control of the B of C. On Wednesday he also called the CEO of the B of C Yiannis Kypri to his office and asked him to resign, ordering him not to return to his office. Kypri ignored the order and returned to his office. Kypri’s line was that he did not want to resign and would leave his office only if he was sacked, in writing, by the Governor.
The power-tripping Panicos, annoyed that he had been disobeyed by Kypri, called him back to the Central Bank on Friday to insist that he tendered his resignation. We do not know if Panicos got one of his steroid enhanced bodyguards to rough up Kypri but he did get the resignation letter.

THE BANK of Kyproulla is now under the effective control of the Professor. The administrator he appointed, Dinos Christofides, is a pensioner who last worked at the Arab Bank and would be at the Governor’s beck and call.
Christofides has already moved into the bank chairman’s palatial office and has sent morale-boosting memos to staff. It will need a lot more than memos from a retired banker to boost the morale of staff that were informed on Friday that not even their jobs are safe.
Some great brain, probably the Governor, decided that all 2,300 local Laiki employees would be added to the B of C’s 3,000-strong work-force and then someone would decide who would be kept on. It is a lunatic scheme that only a complete lunatic could have come up with but it obviously has the approval of the polite Panicos.
He cannot claim that this was the troika’s idea as he did when he asked for the resignations of the bank’s directors. The troika has come up with some resoundingly stupid ideas but this is so stupid it could only have been thought up by the bank workers’ union boss Loizos Hadjicostis. Being a loyal left-winger Panicos could not go against the wishes of a union boss.

THE B of C has been turned by Panicos and his ECB commanders into a sort of banking rubbish tip into which all problems are dumped. First they lumbered it with Laiki’s €9.2 billion debt to ELA in exchange for giving it Laiki’s healthy business which was worth significantly less.
Then they gave it all Laiki’s bad debts as an added sweetener. Now it has also been lumbered with Laiki’s staff and would have to sack some of its own employees to make room for the Laiki workers.
It gets worse. The B of C has now been told that the collateral provided by Laiki in exchange for the €9bn was inadequate given that the PIMCO report envisaged a 70 per cent reduction in the value of properties and would have to provide additional collateral. This would restrict the B of C’s ability to secure liquidity assistance as it would be using its own assets as collateral for Laiki’s debt. Need we also mention the bargain basement price that the bank’s operations in Greece were sold for because the Krauts wanted to reduce the size of our banking sector? 

“I THOUGHT the Governor was responsible for all these crazy ideas until I had meeting with members of the troika,” one banking executive told our establishment. “These people treat us with utter contempt, always imposing their views on us.”
Apart from the arrogant and self-important representatives of the troika, B of C executives also have to deal with the geeky consultants of Alvarez and Marsal whom Panicos hired to restructure the bank. They are nerdy types in their late 20s or early 30s, who know nothing about the real world boss, but feel they have the right to boss around everyone.
They are not as bad as the nerds working for the ECB and the IMF who have been shouting and dressing down Sarris, Panicos and anyone else who dares to disagree with their plans. This is why Panicos has now chosen the easy way out, always agreeing with them and doing as they command him regardless of how catastrophic their idea are.

THE NASTIEST of the lot, according to our customer, is the deleterious Delia Draculescu who has been labeled the Cruella De Vil of the IMF. Unsmiling, dour and condescending at all times, she is one of those people who cannot lose an argument.
“The harder we tried to negotiate the less we got from her,” said one banker. “If we managed to persuade her to improve something she would demand another four things that would make matters worse for us so that she could remain in charge. And she spoke to us as if we were clueless peasants who had not seen a computer in our life.”
If at any time members of our side stuck to their position, Cruella would just get up and threaten to leave. She did this to Sarris on several occasions, we were informed.
“She is not just on a mission to destroy us but she wants our complete humiliation as well because this would satisfy her congenital and nasty sadistic sense of superiority,” said the banker.

THE KRAUTS may have managed to make our banking sector smaller but did they punish the Russian oligarchs as they had planned? They may have punished those who had money in Laiki but those with allegedly dirty money in the other banks were not touched.
As for those who had money in the B of C they will now be shareholders as the uninsured depositors would receive shares in exchange for the money they would lose (37.5 per cent of their deposits at present, but do not be surprised if Cruella decides this should rise to 80 per cent). Rather than penalising the Russian oligarchs, the clever Krauts made them shareholders in our biggest bank so they could launder their dirty money with fewer restrictions.   
T

Delia has been branded as the Cruella Deville of the IMF

OUR POLITICIANS just cannot resist the temptation to tell their audience what they want to hear. Populism is so deeply rooted in public discourse that very few politicians can break away from it. Those who do are usually pilloried by the media, also inclined to tell people what they want to hear, and punished by voters that detest a messenger of bad tidings regardless of how truthful these may be. As a society we seem to prefer to live with our illusions rather than deal with harsh reality.
We would have hoped that the economic catastrophe visited upon us - the devastating, long-term effects of which many people have not yet realised – would have been the shock that forced us to stop deluding ourselves and faced reality. And if people had difficulty accepting reality, our leaders should have helped them do so by speaking honestly to them, shunning the populist platitudes that were a big contributory factor to our current woes. This responsibility is essentially on the shoulders of President Anastasiades, who as head of state, is ideally placed to introduce an honest, reality-based, political discourse.
Anastasiades had shown during the 2004 referendum that he had the mettle to go against the flow and take an unpopular stand he thought was right for the country, disregarding the political cost he would suffer by telling people what they did not want to hear. His televised addresses to the people after the two Eurogroup meetings were pragmatic and honest, indicating that the new president was set on introducing a more honest discourse.
This hope was dashed on Friday when Anastasiades made a speech to the annual conference of the public servants union PASYDY and told his audience what it wanted to hear. He would avoid additional measures that would “certainly burden those whom we always choose to punish, the public servants,” he said, as if this was some downtrodden group of workers forced to live below the poverty line. His despicable pandering to the public servants did not end there. “I want to make it clear, there would not be further cuts in pay and benefits,” he said, explaining that the public sector should focus on increasing productivity and drastically reducing operational costs.
Anastasiades sounded like his predecessor, pandering to Cyprus’ most privileged workers, who have suffered the least from the recession. It was a provocation to even mention that we always punish public employees, when private sector workers who on average are paid 40 per cent less than public servants had to accept much bigger pay cuts. And he omitted to mention that “we always choose to punish public servants” because the public sector payroll and pensions are the main reason the state is bankrupt. Who should we punish instead – the 50,000 unemployed or the tens of thousands of people being paid less than the minimum wage?
There was no honesty in the president’s speech to PASYDY. Rather than make privileged public servants feel as victims and make them promises he knows he cannot keep, he should have told them to consider themselves fortunate that they had secure, well-paid jobs in contrast to the rest of the population and that they may have to make more sacrifices for the good of society. He could have suggested the possibility of a small cut in their pay that would go towards supporting the growing number of their unemployed fellow citizens who could not afford to feed their families.
And he should never have ruled out more cuts in pay and benefits because these are a certainty in the next few months when tax revenues fall to the bare minimum. Additional pay cuts of up to 30 per cent in the public sector might not be enough to cover the shortfall the government would face. Does Anastasiades really want to be known as the president who offers false hopes and goes back on all his promises?
The president must banish the populist platitudes from his speeches and prepare people for the years of hardship that lie ahead. What people need to know now is that they have a leader who is aware of the crushing difficulties we face but has a plan to help the country get back on its feet eventually. It should be made clear that there are no quick fixes and the plan would need big sacrifices and very hard work by all to achieve the desired result. This is what the president must be telling people if we are to have a chance of surviving as a country.