BUSINESS

Christofias unhappy with EU decision to probe Cypriot banks

Cyprus President Dimitris Christofias expressed discontent on Tuesday at the Eurogroup’s insistence on sending a private firm to Nicosia to investigate possible money laundering by the island’s banks, while a European commissioner intervened again to dash talk of a haircut on deposits at Cypriot lenders.

Speaking during his farewell visit to Athens, the outgoing president of Cyprus accused the other eurozone states of “pestering Cyprus,” as instead of helping the island out of a financial crisis, “they have suddenly remembered the issue of money laundering.”

His comments came in the aftermath of Monday’s Eurogroup decision that Finance Minister Vassos Shiarly qualified as painful, stressing that Nicosia’s arguments against the European Union sending a private firm to probe the Cypriot credit sector for possible money laundering were not heard. The decision drew criticism from across the spectrum of the Cypriot political system, too, as the probe into bank accounts will be seen as a counterincentive for investors on the island.

On the issue of the scenario that emerged just before the Eurogroup meeting, regarding a haircut on bank holdings, Commissioner Olli Rehn, responsible for the Union’s economic and monetary affairs, filled the gap left by the new Eurogroup chief and dismissed such an idea. With Jeroen Dijsselbloem – also the Dutch finance minister – drawing criticism for not ruling out the possibility of those with deposits at Cypriot banks being forced to take losses, Rehn reiterated his position that the Commission was not working on any such proposal, and went a step further: “The Commission is not working on any PSI option for Cyprus,” Rehn said, using jargon for “private sector involvement.” “Greece is a specific and unique case in this regard,” he said.

Nikos Anastasiadis, the front-runner in Cyprus’s presidential election, to be held on Sunday, said on Tuesday he would not sign any bailout deal that would force private depositors to take losses.

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