Cyprus judges to look into crisis, president

Wed Apr 3, 2013 4:12pm EDT
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By Michele Kambas

NICOSIA (Reuters) - Supreme Court judges will launch an investigation on Thursday into almost a decade of financial profligacy which brought Cyprus to its knees last month, with a mandate from the head of state to give his own affairs special attention.

Retired judges Georghios Pikis, Panayiotis Kallis and Yiannakis Constantinides were appointed this week by newly elected President Nicos Anastasiades; he has asked them to investigate who might bear "criminal, civil and political" responsibility for events from 2006 which ultimately forced the closure of the island's second largest bank and imposed big losses on depositors in its largest in return for a bailout.

Cyprus, a euro zone minnow with a population of less than one million, has been hobbled by the downsizing of its inflated banking sector and the prospect of deep recession at least for the next two years.

"The public is entitled to have a full picture of what went wrong, what could have been done, where the mistakes were made, and by whom," former finance minister Michael Sarris told Reuters on Wednesday.

After only five weeks on the job, he stepped down on Tuesday, saying staying on was impossible since his actions would too be under scrutiny. Last year he briefly headed Popular Bank, now being wound down under a mountain of debt.

Sarris has not been accused of any wrongdoing, though he is likely to be questioned, among many on the island. President Anastasiades, a conservative elected in February, says he himself does not want to be immune from the probe.

"I ask of you to prioritize investigating, with enhanced scrutiny to all that is directly related to me," Anastasiades told the judges as he appointed them on Tuesday.

A bank statement, first published in the Cypriot communist newspaper Haravghi which maintains it is genuine, shows a company whose owners are related to Anastasiades by marriage moving money out of Popular in early March.   Continued...

A man tries to look inside a branch of Laiki Bank a few hours before the re-opening of the banks on the island in Nicosia in this March 28, 2013 file photo. REUTERS/Yorgos Karahalis/Files