The Central Bank of Cyprus named Spyros Stavrinakis deputy governor as it braces for an increased workload under a planned bailout of the euro-area country’s lenders.
The promotion of Stavrinakis from his post as senior director “significantly reinforces” the Nicosia-based central bank’s ability to meet the challenges facing the financial sector and the economy, Governor Panicos Demetriades said in an e-mailed statement on Monday. Cyprus hasn’t had a deputy central bank chief since 1964.
Cyprus has been in negotiations with the European Commission, European Central Bank and International Monetary Fund over the size and terms of a bailout since June, when it became the fifth euro area country to request aid. Completing an agreement on the rescue will probably fall to the winner of a February 17 presidential election.
Government spokesman Stefanos Stefanou said the appointment is constitutional and vital as lenders “find themselves in the most difficult situation since 1974,” according to comments posted on the Press and Information Office’s website.
Stefanou spoke after opposition party leaders including DISY leader Nicos Anastasiades, who leads in polls ahead of the election, criticized the promotion as unconstitutional and unethical, especially as it comes so close to the vote, state-run CyBC television reported.
Yorgos Lillikas, an independent candidate in the presidential race, said the appointment was unconstitutional as the position is meant to be filled by a Turkish Cypriot. The move will call into question Cyprus’s resolve to reunify the two sides, according to comments posted on his website.
Stavrinakis, who has worked at the central bank for 35 years, oversees four departments, including bank supervision and regulation, financial stability and licensing. In 2007, he was appointed as deputy IMF representative for Cyprus. He studied economics at the University of Manchester and holds a Master’s of Business Administration from the University of Sheffield, both in the UK.
Pacific Investment Management Co. was hired to review the portfolios of Cyprus’s banks, which took losses from holdings of Greek government bonds in the country’s debt restructuring last year, in order to assess their recapitalization needs. Pimco’s worst-case scenario for the lenders is 9.2 billion euros and its baseline scenario is 6 billion euros, Nicosia- based broadcaster Sigma reported on Sunday.