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Friday, 23 August 2013

Former Cyprus president Demetris Christofias walked out of a public enquiry into the causes of the island’s financial crisis Thursday, declining to answer questions before he had his say.

The walkout was criticised by the enquiry committee and its chairman who said the attitude of the former president was “insulting”.

Christofias insisted he be allowed to read a 25-page written statement before having to answer questions from the three-member panel about his part in Cyprus’s financial meltdown.

He also wanted any questions to be put in writing as he wanted more time to respond.

“I’m not ready. I’m not just any witness. I feel like a defendant in the dock. I feel as if I have already been found guilty,” Christofias said.

Committee chairman George Pikis said the enquiry had no mandate to apportion criminal responsibility and voiced mounting frustration with the ex-president’s spoiling tactics.

“Your attitude is insulting. Are you refusing to answer? This will be recorded in the minutes,” Pikis said.

He told Christofias that, according to procedure, he must answer questions first.

The committee of inquiry later issued a statement harshly criticising Christofias.

“The behaviour of Mr Christofias can only be characterised as inexcusable and degrading the institutions and functioning rule of law,” the statement said.

It said the matter had been referred to the attorney general Petros Klerides to decide what action to take.

The communist former president was also upset that his appearance was sandwiched between that of former central bank governor Athanasios Orphanides — with whom he had frosty relations — and his conservative successor President Nicos Anastasiades.

Prior to the hearing, Christofias had asked the committee of inquiry for more time to prepare as it was the summer holidays but the enquiry declined.

After storming out of the proceedings, Christofias held a news conference in which he read his prepared statement of 10,000 words.

In his statement, Christofias denied he stood idly by while the economic landscape darkened and dismissed suggestions he did not want to sign a bailout deal with international creditors.

He blamed bad banking for the financial crisis.

“Unfortunately, the negative developments in the Cyprus banking system were not addressed by the competent authority, so it required the support of the state, which could not bear the financial burden,” Christofias said.

Christofias has been widely blamed for the island’s economic downfall, with critics accusing him of poor handling of the bailout negotiations and of turning a fiscal surplus into a huge deficit during his five years in power.

Critics say Cyprus could have secured better terms if it had applied for a bailout soon after the Greek debt haircut in late 2011, which cost Cyprus banks an estimated 4.5 billion euros.

And even after it had requested one, the talks dragged on and an agreement was reached only in March this year — after Christofias stepped down in February.

Christofias was reluctant to sign up to the worsening terms on offer from the European Central Bank, the European Commission and the International Monetary Fund, hoping he could borrow the money from elsewhere, such as Moscow.

It was left to his successor Anastasiades to sign a 23 billion euro bail-in/bailout package.

In return for a 10 billion-euro bailout ($13 billion), the troika demanded the winding up of the island’s second largest bank Laiki and a haircut on deposits over 100,000 euros in its largest lender Bank of Cyprus.

The haircut — unprecedented for the eurozone — forced the government to close all the island’s banks for nearly two weeks in March and impose draconian controls when they reopened, some of which remain in force.

Anastasiades is to appear before the committee on August 26.

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