Cyprus parliament committee to question central bank governor

A committee of the Cypriot parliament voted on Tuesday to subpoena Central Bank Governor Panicos Demetriades to answer questions as to whether he had misled the parliament in relation to the mandate for a probe into the circumstances which forced the two largest banks to seek state assistance. The investigation is at the center of letters exchanged between European Central Bank Governor Mario Draghi and Cypriot President Nicos Anastasiades. Draghi had warned Anastasiades that the investigation might constitute an attack against the independence of Demetriades in violation of Cypriot and European Union legislation and could lead to Cyprus being brought before the EU court. Anastasiades, in a letter published in several media on Tuesday, maintained that the Cypriot parliament, as an independent and distinctive branch of the state under the presidential system of government, has a right to carry out an investigation into acts or omission of the central bank governor without constituting a procedure for his dismissal. In his letter to Draghi, Anastasiades said the Alvarez & Marsal probe carried out on instructions by Demetriades "focused exclusively to the Bank of Cyprus, selectively ignoring to examine the activities of Laiki (Cyprus Popular Bank), irrespective of the fact that it had received 9.2 billion euros (12.1 billion U.S. dollars) from ELA (emergency liquidity assistance)." Demetriades had publicly stated that he kept pumping ELA into the bank despite knowing that it was going down. The Ethics parliamentary committee said after a meeting that it decided by a majority vote to ask Demetriades to testify at its next session in a week's time. Committee chairman Demetris Syllouris said Demetriades is obliged under parliamentary rules to testify and is liable to arrest for contempt of parliament in case he refuses to appear at the committee's hearing.