* Troika leaves empty-handed with no bailout deal in sight *
Cyprus President Demetris Christofias was ridiculed in the local media on Thursday for saying that he did not know that the island nation’s bailout would cost 17.5 bln euros and that the first he heard of it was on Wednesday evening.
The bailout, negotiated with the Troika of international lenders from the European Commission, the European Central Bank and the International Monetary Fund, is the size of the national output, and is part and parcel of a deal that warrants drastic cuts in public spending, reduction in civil servants’ salaries and benefits, reform of the bankrupt pension fund and privatization of profitable utilities.
Failing to reach any agreement with the Cyprus government, the Troika negotiators leave Cyprus empty-handed on Thursday, unsure of when and if they would return to conclude and finance rescue to prevent an economic melt-down similar to Greece.
The president said he would meet with IMF chief Christine Lagarde and ECB boss Mario Draghi to persuade them on the sidelines of a EU leaders’ summit in Brussles Thursday to back down from demands to privatise state-owned telco Cyta, not to abolish the automatic cost-of-living-allowance and not to tap into future revenues from offshore gas exploration in order to ensure repayment of a bailout.
Front page headlines suggested that the president was “in the dark” and “shocked” that he clashed with Finance Minister Vassos Shiarly for not giving him the true picture of the crisis.
“You should not scare (the public) with numbers,” an irate president reportedly told Shiarly.
A meeting with party leaders to brief them about the negotiations with the representatives of the Troika of international lenders “became particularly hostile when the political leadership heard the bailout amount, which is around 17 bln euros – 10 bln for the banks (recapitalisation), 6 bln for maturing state debt and 1.5 bln for public finance,” the Cyprus Mail reported.
Newspaper reports suggested that the president slammed his hand on the table and demanded to know how the amount became so high, adding that he would sign any bailout deal with the Troika, and that such a deal was not sustainable.
Asked by party leaders when a bailout deal ought to be signed with the Troika in order to secure funds to recapitalize the banks and pay down a runaway public deficit, Shiarly simply said, “now!”
Greens party General Secretary Ioanna Panayiotou was blunt in her statements when she left the presidential palace, saying that “last year the president said he did not know where Mari was and now he tells us he did not know the size of our public debt.”
Thirteen firemen and soldiers were killed at Mari naval base in July last year, when 180 containers full of unstable arms and ammunition confiscated on their way from Iran to Syria on board a Russian ship exploded and decimated the island’s main power station, plunging the nation and the economy into darkness.
In a meeting that left party leaders mesmerized in the incompetence of the present administration, President Christofias also turned his fire against central banker Paniccos Demetriades, his chosen successor to former Central Bank Governor Athanassios Orphanides, who has recently been calling for a better control of public debt and the safeguarding of the island’s banking system.
Christofias has been accused of consistently causing harm to the reputation of the banking sector saying that the capitalist institutions were solely to blame for the economic crisis due to their “greedy” exposure to Greek sovereign debt. Ironically, he ignored warnings over the past four years from Orphanides to bring the public sector debt under control and reforms, which caused the rift with the former central banker whom the president was adamant to replace in May this year.
