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The delay to appoint a new leadership at the state-rescued Cooperative Central Bank is causing the greatest harm and fuelling rumours, once again, as depositors and ordinary folk are worried and considering removing their savings from the institution.
Although Chairman Nicholas Hadjiyiannis took off one hat and put on another, that of CEO in July, replacing veteran banker Marios Clerides, this continuity was not enough to ensure stability at the bank, seen as a lender of last resort to the downsized network of 18 Co-op savings institutions.
The government and board members have been at odds for some time, with some replaced, while others, including former senior managers, are venting their anger by undermining the bank itself, that currently has the highest rate of non-performing loans on the island.
Such sabotage by the same people who spread rumours last year, has to stop. And the only way to do that is for the government to make up its mind on the bank’s future and let the CCB run itself, lending at affordable rates to farmers, craftsmen and SMEs, in order to get the economy starting again.
The plans announced last week, as part of the European Commission’s approval of a further EUR 175 mln recap, whereby the CCB will gradually return to public hands with share packages of 25% offered to investors and former ‘members’ over the next decade, is the first, albeit small step in the right direction.
However, the CCB has also fallen victim to the pre-election sickness that has spread across the political scene, with every ignorant MP expressing an opinion on how best to solve the economic crisis. This, in turn, has forced the single-party government into a corner, fearing to take any drastic action on any matter that may seem unpopular, just five months from the polls, jeopardising the chances of the ruling DISY party winning a fare share of the seats in the next parliament.
This means that any changes in the workings of the CCB, as with all issues related to privatisations and reforms, will have to be postponed till after the May elections.
Too bad, as these problems will continue to linger on for a further six months, simply to allow a bunch of MPs to get re-elected.
