The investigation committee looking into the causes of Cyprus’ economic debacle officially released on Monday its report, saying that former President Demetris Christofias was predominantly responsible for Cyprus’ economic troubles.
The investigation committee was appointed in March by the Cabinet to probe into possible civil, criminal or political liabilities concerning developments in Cyprus’ economy and banking sector.
It was chaired by Giorgos Pikis, a former Supreme Court President and former member of the International Court of Justice in The Hague. Two more members include Supreme Court Judge Andreas Kramvis and former Cyprus Ombudsman and former judge Eliana Nicolaou.
Parts of the committees report, totaling 178 pages were read out by Pikis during a press conference which lasted more than one hour but did not answer any questions from reporters.
The committee said that the “main” responsibility for the economic debacle lies with former president of the Republic Demetris Christofias, who “determined the economic policy of the country, ignoring the impact of its policy on every aspect of the economy” and “insisted on imposing his positions, ignoring the experts’ advice and promptings on issues related to the economy”.
The investigation committee also attributed responsibility to President Nicos Anastasiades and his government because they were not well prepared for the negotiations of the Eurogroup session held on 15 March at which Cyprus was asked to impose a haircut on deposits to recapitilise its two largest banks which were heavily exposed to the Greek debt.
The committee said that political responsibility also rests with the members of Christofias’ cabinet “who had the power to reject proposals and bills on the economy but did not do so”.
Political responsibility is also attributed to the Democratic Party (DEKO) and the socialist movement EDEK which participated in Christofias’ administration for three and a half years and two years respectively.
The member of the committee Eliana Nicolaou drew up a supplementary report in which she noted that “the economic crisis was caused by the activation of a vicious circle of interdependence between the banking system and the country’s finances”. Nicolaou said that she would not read out her report as “it did not reflect the positions of the other two members of the committee”.
Excluded from international markets since May 2011, Cyprus requested and received a €10 billion financial assistance package from the Troika (EC, ECB, IMF).
The package featured a sizeable reduction of the island’s banking sector, as well as bail-in of uninsured deposits, which hampered the services sector, one of the island’s main source of income.
