One of Cyprus’s most senior civil servants has likened his country’s treatment by Germany and the IMF to the shooting of a pigeon with an atomic bomb, saying they had destroyed an economic system that worked.
Christos Patsalides, permanent secretary of Cyprus’s Ministry of Finance, also described the international lenders as “forces of occupation” that cared nothing for human rights.
Patsalides took part in the recent bailout negotiations between Cyprus and the European Union and International Monetary Fund.
He was speaking to a judicial inquiry which started an investigation on Friday into the circumstances that led to the economic meltdown of one of the euro zone’s smallest economies.
Patsalides told the inquiry that an “unrelenting” team of technocrats had dispensed savage fiscal punishment to cash-starved Cyprus “With the imposition of Germany and the IMF … they shot a pigeon with an atomic bomb,” he said.
Many Cypriots saw their life savings vanish in March when authorities imposed losses on uninsured deposits in two of Cyprus’s banks – Popular and Bank of Cyprus – which were badly stung by an EU-sanctioned writedown on Greek sovereign bonds.
The depositor losses – which also hit overseas depositors, many from Russia – were part of Cyprus’s contribution ensure it received a 10 billion euro bailout from the EU and IMF.
Asked whether forcing losses on depositors was compatible with their individual rights, Patsalides replied: “When you are dealing with forces of occupation, they don’t talk about human rights.”
Cyprus, which had modelled itself as an offshore financial services centre for lack of any other resources, now faces a grim future with its reputation in tatters and its economy deep in recession.
“They destroyed an economic system that worked,” Patsalides said. “Yes, we have our shortcomings, but the magnitude of the punishment is far greater than the size of the problem.” [Reuters]