THIRTEEN days before the presidential elections, which he is not contesting, President Demetris Christofias yesterday appointed a deputy Central Bank governor – a position reserved by the constitution for Turkish Cypriots which has been vacant for the past 50 years – sparking a storm of controversy.
Christofias said the appointment of senior director Spyros Stavrinakis was necessary due to the Central Bank’s increasing obligations, rejecting suggestions it that it was politically motivated.
It was a rather unexpected appointment, with information of the government’s intentions only reaching the public domain late on Saturday evening.
Presidential frontrunner, DISY leader Nicos Anastasiades, said the appointment was unconstitutional, unacceptable and that he would revoke it if elected this month.
But Christofias said the move had been necessary.
He said Stavrinakis was not a leftist but a “conscientious Central Bank official” whom Central Bank Governor Panicos Demetriades found necessary to have by his side.
Stavrinakis, who has been with the Central Bank for the past 35 years, thanked the president for entrusting him with the position and warned that the island’s troubles were still ahead. “The challenges faced by Cyprus’ financial system are unprecedented and historical and probably the biggest since 1974,” he said.
Stavrinakis, who had been sidelined by the previous governor, Athanasios Orphanides, was upgraded as soon as Demetriades took over last year. He will now hold a position that no other governor or administration deemed necessary to fill in the past 50 years.
The deputy attorney general and deputy auditor general positions have also been filled in the past using the same law.
This was made possible by invoking the law of necessity, passed after the Turkish Cypriots abandoned parliament and their positions in the government in 1960s, basically to enable the state to function properly even if certain acts conflicted with the constitution.
Article 118 of the Constitution, drafted in 1960, states: “The President and Vice-President of the Republic shall jointly appoint two capable and suitable persons as Governor and deputy Governor of the Bank of Issue, in compliance with the rule that the Governor and deputy Governor shall not hail from the same community.”
The article goes on to say that the same applies in the event the Bank of Issue is converted to a Central Bank.
Asked about this yesterday, Attorney-general Petros Clerides provided an ambiguous answer: he said the law of necessity could be invoked to legitimise the appointment of a deputy Governor, or it could not.
This was because appointments are by nature “political,” Clerides added, and as such it is more a question of “the workings of democracy.”
In his opinion, such matters “should not be viewed in the narrow light of constitutional provisions.”
Anastasiades meanwhile described the appointment as unacceptable and said he would revoke it if elected president.
“What is happening 13 days before the departure of the current administration is inconceivable especially when we are talking about a position that remained vacant for a full 50 years,” Anastasiades said.
He said the issue was “clearly political,” adding that the law of necessity was only applied when a service could not function.
Reports suggested the appointment was made to pre-empt a similar move by Anastasiades, who, it has been rumoured, was planning to put his man there if elected.
“This is absurd,” Anastasiades said. “If I had such plans I would have said it in public.”
Government spokesman Stefanos Stefanou said the appointment was legal and he also denied Stavrinakis was an Akelite.
“Mr Stavrinakis is not AKEL. For many years he has been a director in the Central Bank, he is very knowledgeable of procedures and a very good associate of the Central Bank Governor,” Stefanou said.
He added that the appointment was made in consultation with the Central Bank.
The Central Bank said Stavrinakis was an excellent technocrat with many years experience and “under the current conditions there could not have been a better choice for this office.”
The Central Bank of Cyprus was the only eurozone regulator that did not have a deputy governor.
New deputy CB Governor Spyros Stavrinakis leaving the palace yesterday (By Christos Theodorides)