Cyprus central bank chief calls for its independence to be respected

Sun Apr 14, 2013 3:29pm EDT
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By Karolina Tagaris

NICOSIA (Reuters) - Cyprus's central bank governor said on Sunday he was willing to work with the government to pull the island out of its economic crisis, provided the bank's independence was respected.

A rift between Governor Panicos Demetriades, appointed last May by the communist former administration, and the ruling center-right government has deepened and pressure grown on him to resign over his handling of the crisis.

In the past week, the Cypriot parliament started an investigation against Demetriades, President Nicos Anastasiades's government withdrew the appointment of his trusted deputy and three central bank officials resigned.

The unfolding drama drew a scathing response from European Central Bank (ECB) President Mario Draghi, who wrote to the Cypriot president telling him any attempt to effectively sack the governor could land Cyprus in the European Court of Justice.

Anastasiades, when asked by reporters on Sunday to comment on the apparent feud between the two bodies, said he was "frankly, very saddened".

"My intention to work with the country's democratic institutions is a given," Demetriades, who sits on the ECB's governing council, was quoted as saying in an interview with the Phileleftheros newspaper.

"We are ready to respond to every call for cooperation and coordination for the benefit of this country always, however within the framework of total respect towards the central bank's independence, as stipulated by the ECB."

Under European Union law, a governor can only be dismissed if he no longer fulfils the conditions required for the performance of his duties, or if he is guilty of serious misconduct.   Continued...

Cyprus Central Bank Governor Panicos Demetriades makes statements outside the parliament in Nicosia March 22, 2013. REUTERS/Yorgos Karahalis