NICOSIA: President Demetris Christofias yesterday said Cyprus could have survived the euro crisis but for lax controls of a banking sector dangerously exposed to toxic Greek debt.
“Unfortunately, this crisis has created us real problems,” Christofias said in a speech to pensioners.
“We could have exited the crisis, but we faced a ‘tsunami’ called the banks that without any control by the central bank governor brought the economy practically to its knees,” he said.
Christofias has long argued that Cyprus was requesting a bailout due to lax supervision by former central bank governor Athanasios Orphanides and reckless behaviour from bankers who acquired risky Greek debt. But he has come under heavy criticism for misjudging the worsening economic climate.
The communist head of state preferred to borrow the money from close ally Moscow rather than bite the bullet of harsh austerity to secure an EU loan, but Russia has kept its distance on the matter.
Cyprus has officially requested that Russia give it a five-year extension on paying back an initial ¤2.5bn ($3.32bn) loan it received in 2011 and is scheduled to be paid in full in 2016.
The government needed the money then because it had been effectively shut out of the markets after its credit rating had slid into junk territory. AFP
