The letter published from Dr Jim Leontiades Sunday Mail January 19), which accused the European Central Bank of acting irresponsibly in funding the insolvent Laiki Bank is at odds with your reporting last August of the Cyprus Central Bank governor’s part in Laiki’s refunding.
Professor Demetriades claimed before the Pikis Tribunal that the bank was solvent while he was pumping money into it, a claim which was disputed by his (since retired) deputy. Demetriades had made an earlier claim that he had to keep Laiki alive to prevent the complete collapse of the Cyprus banking system, despite his action being in violation of European Central Bank rules.
It seems from your report that the ECB was somewhat lax in its governance so far as its protocol was concerned. The `gun to the President’s head’ you reported in March as the bail-in of all Laiki accounts, irrespective of the €100,000 guarantee. When he rejected the threat and warned that he would resign, you reported that he was told that the same imposition would be threatened to his successor.
Maurice Sokel,
Paphos
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