ECB Warns Cyprus as Government Pushes for Georghadji’s Dismissal 

draghi-Giorkagi

The European Central Bank warned Cypriot President Nicos Anastasiades to respect central-bank independence after the country’s government started proceedings to dismiss Governor Chrystalla Georghadji.

A year after previous Cypriot central-bank chief Panicos Demetriades resigned his post following months of political pressure, a government spokesman said on Sunday that Georghadji is to be investigated by the island’s attorney general in a conflict-of-interest case. The ECB contacted Cypriot authorities to make its concerns known and is monitoring the situation, a person familiar with the situation said.

Georghadji, who this month hosted a meeting of the ECB’s Governing Council in Nicosia alongside ECB President Mario Draghi, has come under fire for not declaring that her estranged husband represents an investor in the defunct Laiki Bank who is suing the state and the central bank. Under European Union law, governments are prohibited from dismissing a central-bank governor unless a crime has been committed.

A spokesman for the ECB declined to comment. Victoras Papadopoulos, a spokesman for the Cypriot government, said on Monday that Anastasiades had contacted Draghi to inform him of the situation. Anastasiades “was told that as long as the law is maintained and the constitution is observed, there won’t be a problem,” Papadopoulos said.

Cyprus is the euro area’s second-smallest economy, after Malta. It suffered a financial collapse related to Greece’s debt writedown in 2012, and accepted an international rescue in March 2013.

Georghadji, 58, told reporters after meeting Anastasiades in Nicosia on March 15 that she won’t resign. The former Cypriot auditor general was appointed by Anastasiades last year, after a long-running dispute over the handling of the financial crisis saw the departure of Demetriades.

Source: Bloomberg – ECB Warns Cyprus as Government Pushes for Georghadji’s Dismissal

Leave a Comment


Broker Cyprus TopFX