Sunday

29th May 2022

Cyprus central bank governor resigns

  • Nicosia was rocked by scandals surrounding the Central Bank and its contracts with an American consultancy (Photo: Kyriakos)

The governor of the Cypriot central bank, Panicos Demetriades, on Monday (10 March) resigned after being investigated over a secret deal he negotiated with an American consultancy firm in connection with his country's €10bn bailout.

Demetriades handed in his resignation to the Cypriot finance minister while in Brussels, where eurozone finance ministers were meeting on Monday.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Quoting a source who saw the letter, Reuters said Demetriades cited “family and personal” reasons for his departure, and “difficulty in cooperating with the board of directors” of the Central Bank.

The board last year issued an internal report seen by EUobserver examining the circumstances in which Demetriades had agreed to a secret fee for Alvarez&Marsal, the consultancy hired by the Central Bank to evaluate the gap needed to be filled in the Cypriot banking sector.

The audit claimed Demetriades kept the board in the dark about the secret fee, which would have included a cut from the seized deposits that were part of the bailout deal. Demetriades said he had to agree to the fee, because he was threatened by Alvarez&Marsal they would leave Cyprus at the height of the bailout negotiations.

According to the Cyprus Mail newspaper, the prosecutor's office in Cyprus has dropped the charges in the Alvarez&Marsal affair, but stressed this had nothing to do with his resignation.

Demetriades will receive a severance pay of €250,000, the same paper reports. Demetriades was under pressure to resign already last year when the scandal about the payment broke. He allegedly asked for €1 million in severance pay.

Demetriades was in his post for two years, after being appointed by the previous - left-wing - administration. He had publicly fallen out with the current Conservative President, Nicos Anastasiades.

The row between the two raised concerns in the European Central Bank, which stressed the importance of national central banks being independent from their governments.

The ECB "took note" of Demetriades' resignation and said he "played an important role in the implementation of the adjustment programme.”

“We count on a fruitful cooperation with his successor,” an ECB spokesperson said on Monday.

Meanwhile, eurozone finance ministers said Cyprus was "on track" in its reforms and could receive the next tranche of bailout loans, amounting to €150 million.

EU Commission extends borrowing curbs in 2023

The European Commission on Monday proposed to extend suspension of fiscal borrowing rule in 2023 — but advised prudence amid already rising real interest rates.

Commission grilled on RePowerEU €210bn pricetag

EU leaders unveiled a €210bn strategy aiming to cut Russian gas out of the European energy equation before 2027 and by two-thirds before the end of the year — but questions remain on how it is to be financed.

Commission grilled on RePowerEU €210bn pricetag

EU leaders unveiled a €210bn strategy aiming to cut Russian gas out of the European energy equation before 2027 and by two-thirds before the end of the year — but questions remain on how it is to be financed.

News in Brief

  1. Dutch journalists sue EU over banned Russia TV channels
  2. EU holding €23bn of Russian bank reserves
  3. Russia speeds up passport process in occupied Ukraine
  4. Palestinian civil society denounce Metsola's Israel visit
  5. Johnson refuses to resign after Downing Street parties report
  6. EU border police has over 2,000 agents deployed
  7. Dutch tax authorities to admit to institutional racism
  8. Rutte calls for EU pension and labour reforms

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic delegation visits Nordic Bridges in Canada
  2. Nordic Council of MinistersClear to proceed - green shipping corridors in the Nordic Region
  3. Nordic Council of MinistersNordic ministers agree on international climate commitments
  4. UNESDA - SOFT DRINKS EUROPEEfficient waste collection schemes, closed-loop recycling and access to recycled content are crucial to transition to a circular economy in Europe
  5. UiPathNo digital future for the EU without Intelligent Automation? Online briefing Link

Latest News

  1. EU summit will be 'unwavering' on arms for Ukraine
  2. Orbán's new state of emergency under fire
  3. EU parliament prevaricates on barring Russian lobbyists
  4. Ukraine lawyer enlists EU watchdog against Russian oil
  5. Right of Reply: Hungarian government
  6. When Reagan met Gorbachev — a history lesson for Putin
  7. Orbán oil veto to deface EU summit on Ukraine
  8. France aims for EU minimum-tax deal in June

Join EUobserver

Support quality EU news

Join us