Cyprus & World News

MEPs in Cyprus for probe over Troika’s democratic legitimacy

09 January, 2014

A delegation of a European Parliament (EP) Committee on Finance arrives in Cyprus on Thursday as part of a probe into the democratic legitimacy of the Troika (EC, ECB, IMF).

The MEPs are visiting all the bailed out countries of the Eurozone in a bid to compile a report proposing changes for the future.

In statements he made to EPP TV on Wednesday, EP Vice President and co-rapporteur on the matter Othmar Karas said the problem with the Troika is that it is “not based on community law”.

It’s the role of the EP to say very clearly that no European decisions should be taken “without the European Parliament which is the chamber of the citizens”, he stressed.

Replying to a question he noted that the Parliament should reach its conclusions by March and that he feels it will be a good basis for Treaty changes in the future.

“We need a balance more than we have; a balance between fiscal consolidation, structural reforms and incentives for growth and employment”, he pointed out, recalling that this “is our social model in the European Union”.

For that, he continued, "we need time, for that we need European instruments, for that we need a better and more efficient Europe, for that we need more responsibility and solidarity and for that we need a Treaty change”.

The EP delegation is comprised by Karas from the EPP, Socialist MEP Liêm Hoang Ngoc, Liberal MEP Nils Torvalds and United Left MEP Jurgen Klute.

The MEPs will have meetings with House of Representatives President Yiannakis Omirou and the Parliamentary Committees on Foreign and European Affairs and on Finance and Budgetary matters.

They are also due to meet, inter alia, with Cyprus Central Bank Governor Panicos Demetriades, Under Secretary to the President Constantinos Petrides, former Finance Ministers Michalis Sarris and Vasos Shiarly, the members of an Investigation Committee on the Economy as well Cypriot economists, representatives of the banking and business sectors and former depositors and shareholders of the Bank of Cyprus and Cyprus Popular Bank.

The MEPs will also be giving a press conference on Friday, at 14.30 hrs local time (12.30 GMT) at the European Union House, in Nicosia.

The EP delegation has already visited Lisbon, while after its visit to Nicosia it will forge ahead with visits to Athens and Dublin.

The Cyprus financial system came at the brink of collapse last March when the authorities agreed with its international lenders on a €10 billion bailout, which featured a haircut of deposits over €100,000 in a bid to cover the capital shortfall of the island’s two largest banks. The Bank of Cyprus, the island’s largest lender, absorbed the “good part” of the Cyprus Popular Bank, which will be liquidated.

The bailout was coupled with restrictions in capital movement, which hampered domestic activity. Capital controls, although gradually relaxed, affect foreign banks that provided services to domestic customers.