Cypriot president bent on removing Central bank governor

Cypriot President Nicos Anastasiades told media on Thursday he would apply to the Supreme Court to remove Central Bank of Cyprus Governor Panicos Demetriades with whom he has been at loggerheads ever since assuming power in March. Anastasiades has never spelled out in public details of his grievances against Demetriades, but presidential aides have repeatedly accused him of siding with international lenders in negotiations for a bailout and then delaying measures to return the banking system to normality after sweeping resolution measures. Cyprus had to recapitalize its largest lender, Bank of Cyprus (BOC) by using 47.5 percent of uninsured deposits over 100,000 euros in return for a 10-billion euro bailout by the Eurogroup and the International Monetary Fund agreed soon after Anastasiades became president. It was also forced to close down its second largest lender, Cyprus Popular Bank, known as Laiki, after it received 9.2 billion euros in emergency liquidity assistance from the European Central Bank in just over a year before it was resolved and merged with BOC. Anastasiades blamed Demetriades for allowing Laiki to draw emergency assistance almost equal to over half of the country's economy at a time it was clear the bank was doomed. Government ministers also criticized him for delaying the exiting of BOC from resolution. Demetriades had admitted before a judicial inquiry that he allowed assistance to flow into Laiki so as not to harm the electoral prospects of the party of former left-wing president Demetris Christofias who had appointed him to the post of Central Bank chief. Anastasiades confirmed that he turned down a request by Demetriades to meet him to discuss how to overcome their differences and also to brief him issues currently affecting the economy and the banking system. "I have tried this tactic dozens of times and there were no results. I'll not have meetings for the sake of meetings," said Anastasiades when he was asked how he responded to a letter by Demetriades late last week. He said he asked Demetriades to meet his finance Minister, Haris Georgiades, to brief him on issues affecting public finances and the banking system. When asked what the differences were between the president and the Central Bank governor, Georgiades said there were more than just differences of opinion, alluding to charges that Demetriades had damaged the economy of Cyprus with actions or omissions. Anastasiades said the dispute would be resolved by the Supreme Court since he had no intention whatsoever of resorting to measures which would breach the Constitution. He confirmed that he has asked the Attorney General to examine evidence against Demetriades and apply to the Supreme Court for his removal. Under the Cypriot constitution, the president has no right to dismiss the governor of the Central Bank before the end of his tenure, but he can apply to the Supreme Court to have him removed for actions damaging the interests of the country. "There is no other way besides presenting evidence to the Supreme Court to decide on the issue," Anastasiades said. Demetriades has repeatedly requested the support of the European Central Bank, the European Commission and the International Monetary Fund in his dispute with the president. European Central Bank President Mario Draghi issued a statement last week cautioning the Cypriot president against measures which would encroach on the status of the Central Bank governor as an independent official of the state and would possibly conflict with European rules. Anastasiades brushed aside the statement saying he would follow legal procedures to remove Demetriades from his post as the interest of the country was more important than any rules.