At first, Panicos Demetriades said that “2014 will be a difficult year. Afterwards, there will be a recession, but not as much as in 2013. Moreover, there will be an increase in unemployment and non -performing loans. However, we put the foundations of recovery, which will come in 2015. Changes that were supposed to happen, are happening. “
His relationship with the Government:
“It is an issue that we should not be commenting, concerning Police investigations, but I have to say that I ‘m not worried,” he pointed out.
He added “From my side, I have made attempts to contact the President of the Republic, while on the other hand I meet often the Minister of Finance.”
About Laiki:
“The first topic I undertook was Laiki and the options were limited. Laiki could not shut down, it would be disastrous and the whole banking system would collapse. All depositors would lose access to their liquidity and the state could not cover them, with a sum amounting to 7 billion euros, the state would bankrupt. Each bank would affect the other, “he said.
Mr. Demetriades stated that “We had to apply the Memorandum earlier. We tried to persuade the Government of Christofias to apply the Memorandum. When Nikos Anastasiades became President of the Republic, we gave him a memo explaining everything about banks situation.”
He also revealed that “In November, Mr. Schäuble was telling us to wait for the new government in order to sign the Memorandum, so that the program should have an “owner “. We did not hide the problems under the carpet.”
“In November there were discussions concerning 10 billion and a bailout and not bail in”, he added.
Panicos Demeriades said that “We found out the possibility for deposits cuts on March 4 by the ECB. The chief of Eurogroup assured us that it was an unlikely scenario. That night I informed the President of the Republic and he told me that he was at a party at the Presidential”.
“While our banks were expanded we were taking all the risks and no one else understood those risks,” he said.
“Cyprus is paying for the fiscal and banking errors. Greek bonds were a risky investment and our banks have lost a lot of money,” said the Central Banker .
PIMCO
As Mr. Demetriades mentioned “It is an international company with reputation. Blaming me for the whole situation is nothing more than conspiracy theories, which were promoted by some people who want to protect themselves.”
“We know who is responsible for Laiki’s bankruptcy “, citing Andreas Vgenopoulos.
He mentioned that “Black Rock was excluded because of its investments in Cyprus.”
Bank of Cyprus
“If we consider Bank of Cyprus nine months ago, a real progress was made and now gives the impression that it will go very well. Its viability depends on the support program,” he said.
He clarified that “We are about to exit from the restrictive measures. The beginning of the year is a new landmark.”
Non-Performing Loans
He explained that “Since September we gave instructions to banks for non-performing loans. We need to make a legislative framework so that borrowers will know about their consequences.”
As Panicos Demetriades stated “Banks need to show sensitivity concerning the first residence and if someone pays for his installment, his loan should be considered as a performing loan.”
Furthermore, he revealed that “There were cases where Directors from the Boards of banks took multimillion value loans, while the limit is 500,000 Euros.”
Regarding the attraction of foreign investments, he reported that “Foreign investors have every reason to trust the Cypriot economy. For example, the human capital we have in Cyprus, our natural resources, our institutions and Cypriots entrepreneurship. The fact that foreign investors are interested in Cyprus, gives us hope. There are international organizations interested in doing business in Cyprus, especially after the reviews of Troika”.
“The exit from the Memorandum is not an option; the only option is a faithful implementation. It will be funny to change our currency and exit the Memorandum. There will be more painful austerity measures in case of a bail out,” he said.
For the information regarding the differences within the Board of Central Bank, he said that “Any differences that the Board might have, should not go on the outside. There are no significant differences in the Council.”
He said that “We have achieved a lot during the last six months and this is due to hard work of Central Bank’s stuff and I am grateful to them.”
“If we had not apply the Memorandum, we would have exit the Eurozone and perhaps euro as well” he underlined.
Finally, he said that he is cautiously optimistic because the commitment of the Central Bank and the Government in the Memorandum puts strong foundations for recovery.
