Brussels, 21/10/2013 (Agence Europe) - The Cypriot government and the Central Bank of Cyprus do not see eye to eye on the length of time the restrictions on the movement of capital should remain in place.
Addressing the Cypriot parliament on Monday 21 October, finance minister Harris Georgiades came out against the timing mooted by the central bank governor, Panicos Demetriades, who said in an interview with the Financial Times that the restrictions could remain in place for at least one more year as the government's previous forecasts were over-ambitious. Georgiades stuck to the government's forecasts, issued in September, that the capital restrictions would be lifted by the summer of 2014.
Demetriades also addressed the Cypriot parliament on Monday, noting the importance of sending out a positive image of Cypriot institutions and how they operate. The spat between Demetriades and the government is gaining in political visibility and each member of the troika (the European Commission, the European Central Bank and the IMF) has separately warned that the central bank must remain independent. The Cypriot president, Nicos Anastasiades, announced on Friday that he had provided the competent authorities with documents proving that Demetriades was not up to his job (see EUROPE 10946). In an interview with the Financial Times, Demetriades admitted that the current situation was not tenable but said he would not resign. He expected new losses to be made in the banking sector in 2014, but the banks would have sufficient coverage and would gradually stabilise and recover. (EL/transl.fl)