Probe countdown begins for Cyprus Co-Op debacle

Attorney General Costas Clerides is moving forward with the launching of an investigation into possible offences at the Cyprus Cooperative Bank, in connection with bad loans worth €7.5 billion.

The order for the probe comes days following strong criticism from opposition parties that were pointing fingers at what they described as a “sellout” of the healthy part of the Co-Op to Hellenic Bank while tax payers would foot the bill for the “bad bank” with billions in Non-Performing Loans (NPL).

President Anastasiades also called for an investigation under the condition that foreign experts would take a lead in order to conduct as transparent an investigation as possible.

“It is not so much the time period in which the €7.5 billion of NPL was accumulated but more so in terms of how this happened,” Anastasiades said.

The government spokesperson, Prodromos Prodromou, picked up on the president’s comments and listed a number of components that the government thought should be included in the probe.

Those questions included the reasons behind the failure of the Co-Op, why and how cooperative banking came to require €1.5 billion following the 2013 financial crisis and under what conditions the bank gave out bad loans amounting to €7.49 billion.

Political pundits on state radio said Wednesday morning it was an open secret in certain circles that people would be told they wouldn’t need to repay their loans.

Auditor General Odysseas Michaelides previously wrote a report on the Co-Op, saying that one big reason for the misfortunes of the institution was due to serious mismanagement, among other reasons.