Central Bank Governor Panicos Demetriades said yesterday he will not resign from his post because it would not be in the best interest of the country.
In an interview with ‘Kathimerini’ newspaper, Demetriades said that despite the reactions of the government due to decisions related to the financial crisis, his resignation would only cause further instability.
“If I give in to political pressure that would internationally be considered as a blow to the independence of the institution. I am aware of the difficulties and tension that has been created by the unprecedented reforms in the country’s financial sector,” said Demetriades.
“However, these reforms are extremely important for the implementation of the bailout programme and it is vital that they are continued and completed so that the foundations can be laid for the healthy development of our country,” he added.
His comments follow last week’s run in with President Anastasiades who is seeking legal recourse to remove him as he is deemed ‘unfit for purpose’.
Anastasiades gave Demetriades an ultimatum, warning that he should either fully cooperate with the government or leave his post.
Asked whether staying on as governor under the current circumstances would allow him to perform his duties, Demetriades said that maintaining a healthy relationship with the government is one of the basic duties of the CBC and the governor.
Demetriades said that he has been in constant contact with the government and the President and that another meeting with Anastasiades will be arranged to resolve any misunderstandings.
He also said that he met with Finance Minister Haris Georgiades last week and had also spoken to the President via telephone to explain the CB’s supervision over the new members of Bank of Cyprus’ board of directors.
“Unfortunately, the CB’s assessment team did not have all the necessary information to complete the supervisory procedure before the BoC general meeting.”
Another friction point between him and the President was the governor’s frequent trips abroad.
Demetriades said that his participation in meetings at European decision-making centres and particularly in Frankfurt is vital in order to influence decisions linked to the Cypriot economy.
“I will remind you of the importance of our presence in the European Central Bank’s decision regarding BoC, which was made immediately after the bank exited its resolution regime, and which restored Cyprus as an acceptable institution that can participate in the Eurosystem’s monetary policy operations, allowing BoC to draw liquidity from the Eurosystem.”
The Central Bank Governor’s duties also include participation in the ECB’s board meetings attended by all EU CB governors, the European Systemic Risk Board and other meetings with the Financial Affairs Council (ECOFIN), the IMF and the Bank for International Settlements.