Orphanides: they trashed the banks to win votes
2013-05-22 18:57:03
FORMER CENTRAL Bank Governor Athanasios Orphanides yesterday accused his successor and the previous government of launching an assault on the banking system to win votes in the presidential elections at the cost of the destruction of the economy.
In a live link-up from America with a conference on the euro organised by the Tassos Papadopoulos Centre for Studies yesterday in Nicosia, Orphanides was scathing about the responsibility of the Demetris Christofias government and current central bank governor Panicos Demetriades for today’s economic mess.
He argued that the economic consequences of the past five years were so severe that during that time, real GDP per person fell cumulatively by more than 10 per cent. Following the latest damage to the economy, the decline in GDP is projected to continue. “In five-short years, Cyprus had become a case study on how destructive economic populism can be,” said Orphanides. He quoted German economist Rudi Dornbusch who said: “Populism always ends in tears.”
Despite being at the helm of the central bank from May 2007 to May 2012, Orphanides maintained the bulk of the blame for today’s crisis rests mostly with the Christofias government, though he also had a dig at his successor for allegedly undermining the independence of the central bank by following the AKEL party line.
In his live address to the conference, the former governor noted that when Cyprus joined the eurozone in 2008, it had the respect of its peers. “Five years later, the economy is in shambles. For two whole years, Cyprus has a government with no access to markets. Euro deposits in Cyprus are unequal to euro deposits elsewhere. How could this happen?” he asked.
In a live link-up from America with a conference on the euro organised by the Tassos Papadopoulos Centre for Studies yesterday in Nicosia, Orphanides was scathing about the responsibility of the Demetris Christofias government and current central bank governor Panicos Demetriades for today’s economic mess.
He argued that the economic consequences of the past five years were so severe that during that time, real GDP per person fell cumulatively by more than 10 per cent. Following the latest damage to the economy, the decline in GDP is projected to continue. “In five-short years, Cyprus had become a case study on how destructive economic populism can be,” said Orphanides. He quoted German economist Rudi Dornbusch who said: “Populism always ends in tears.”
Despite being at the helm of the central bank from May 2007 to May 2012, Orphanides maintained the bulk of the blame for today’s crisis rests mostly with the Christofias government, though he also had a dig at his successor for allegedly undermining the independence of the central bank by following the AKEL party line.
In his live address to the conference, the former governor noted that when Cyprus joined the eurozone in 2008, it had the respect of its peers. “Five years later, the economy is in shambles. For two whole years, Cyprus has a government with no access to markets. Euro deposits in Cyprus are unequal to euro deposits elsewhere. How could this happen?” he asked.
