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Five years to the day, when the illustrious members of parliament rejected the first offer for a universal haircut of deposits that would have saved all systemic banks in Cyprus, opting instead for “a second chance” that turned out to be disastrous, politicians are now trying to appear as the saviours of the public by preventing any effort to privatise parts or all of the Co-operative Bank.
Deputies have now embarked on the populist campaign in the name of “bringing the banking thieves to justice”, where, it is true, no-one seems to have been punished.
The Co-op was rescued, twice, with a total bail-out of EUR 1.7 bln, an amount that the government (and the taxpayer) will never see recovered.
So, after all efforts to revive the Co-op, amid all sorts of objections and obstacles laid by those who have a vested interest in keeping the bank on life support, the government decided to rescind its initial plan to return shares to the public, as it was deemed as unconstitutional. Actually, it would also be unethical to give shares back to the same people who had non-performing loans and who did not service their loans, often intentionally. That would be criminal, not selling to a potential investor.
Then again, who would be interesting in buying a bank (or parts of it) when its prime assets have already been cannibalised in an effort to keep the bank afloat. But with political meddling continuing, no wonder the Co-op could not get up on its feet. Politicians need to keep such potential disasters alive in order to secure jobs for friends and relatives and then plunder the state coffers to pay for this adventure.
Only this time, the government has realised that it can no longer be too generous, as the state funds are being depleted, and fast, especially after the haphazard decision to hire another 740 people in the civil service, regardless if the taxpayer can afford it. Ironically, the political parties are not against the move, as this would mean more jobs and more favours to be honoured.
As much as the opposition politicians are making unnecessary noises, driven by their own self-interest, so too should the administration pull back from its over-ambitious plans, as 740 jobs will not plug any hole in the vast pit of long-term unemployed. This is clearly the same old tactic of trying to please some of the people who are owed favours in exchange for their silence, just as with all the “hundreds” of new green and energy-related jobs that were supposed to be created, but with faulty incentives.
