Public discourse in Cyprus lacks soberness and for the most part of it trustworthiness. Sometimes this applies to institutions as well.
The text of the highly anticipated verdict on the events that led to the collapse of the Cyprus Cooperative Bank was published today and according to the investigative committee, which is made up of former judges, the Finance Minister is responsible for the collapse of the Bank.
Media outlets were quick to pass on the title attributing blame to Haris Georgiades.
A detailed reading however of the verdict conclusion reveals that the committee considers the closure or sale of the Bank as a negative development when in fact it was the solution of the problem as the Cooperative Bank was unable to operate profitably due to non performing loans and mismanagement.
The judges deconstruct the path and decisions taken by the Minister until the Bank was absorbed by Hellenic Bank; that is their job. But financially and politically speaking that was the right course of action for the state.
The verdict does speaks for itself: ''The responsibilities of the Minister of Finance have been severe for the collapse of the CCB. We can say that they are proportionately similar to those of any major private firm which is led to dissolution due mismanagement.''
''The Finance Minister has a big responsibility for the wrong course of the privatization process. His obsession with the proposal for giving free shares has caused Europe's strongest reaction, especially regulators. Reactions that occurred in a variety of ways, but left the Minister of Finance indifferent''.
''It is indicative of how he treated them with what he said before us in his testimony that regulators do not have the right to tell the shareholders what they will do with their shares''.
''This, added to inefficient corporate governance and the inability to reduce the NPLs and the poor prospect of privatization''.
''They (European regulators) decided to carry out on-the-spot checks, which broke off the smooth privatization process. He (Finance Minister) led them to the end
imposing extreme solutions. Either dissolution or sale. Eventually it was arranged to be sold in order to avoid the worst solution of uncontrolled dissolution''.
''We must remember something that the Finance Minister mentioned before the committee, that selling was a great way for privatization. Was this his interest from the beginning...?''
In essence, the committee says that the Minister deliberately weakened the bank in order to sell it.
It should be said clearly that the Cooperative Bank which has been on life support since the Cyprus bail-in in 2013, paid for by taxpayers, collapsed because of mismanagement that led to the accumulation of non performing exposures that put the bank out of business - not because the Finance Minister wanted to sell it.
The decision to sell a state bank loaded with toxic loans does not constitute a political mistake but is in fact the solution. Perhaps institutions need to beef up their economic policy know-how in order to avert similar situations in the future. As is often the case we cant see the forest for the trees.
