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Cyprus Awaits Foreign Minister Venizelos

Greek Deputy PM/Foreign Minister Evangelos Venizelos
Greek Deputy PM/Foreign Minister Evangelos Venizelos

Greek Foreign Minister Evangelos Venizelos, who as finance minister in a previous Greek government imposed losses of 74 percent on investors and holders of Greek bonds – which pushed Cypriot banks to the edge of default and forced the government to seek a 10 billion euros ($13 billion) bailout and accept harsh terms including raiding private bank accounts, will visit the island country on July 5 to meet with President Nicos Anastasiades and other political leaders.
The PASOK Socialist leader Venizelos, who was also appointed Deputy Prime Minister by Prime Minister and New Democracy Conservative leader Antonis Samaras as a reward for withdrawing his opposition to the closing of the national broadcaster ERT and the firing of 2,656 workers, was Greece’s point man in implementing the so-called Private Sector Involvement (PSI) scheme, a code phrase which meant Greece would not pay back investors in full.
That nearly wiped out many Greeks of the Diaspora who had put their money and faith in their homeland, as well as Greeks who held smaller bonds than did institutional investors. Samaras, who objected to Venizelos’ plan before the New Democracy leader won election last year, accepted it as soon as he took office and immediately reneged on his promise to hold harmless small investors. The country’s highest court has recently upheld the right of Greece not to pay investors what they are owed.
Venizelos is responsible for the near-destruction of the Cypriot economy, the PSI plan – along with bad loans to Greek businesses by Cypriot banks – causing them to lose 4.5 billion euros ($5.84 billion,) nearly half the country’s Gross Domestic Product. He will meet Cypriot Foreign Minister Ioannis Kaoulides as well as Archbishop Cyrosostomos II, leader of the Orthodox Church of Cyprus.
Anastasiades in March accepted a bailout from the same Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is overseeing Greece’s austerity program in return for $325 billion in rescue loans. Since then, he said he has regretted accepting the terms he opposed while campaigning earlier this year and wants revisions, but that has been rejected by the lenders.
Cypriot banks continue to be under capital controls, limiting how much money people can withdraw, including a 300 euros ($390) daily ATM limit. The government also is moving to seize some 80 percent of private bank accounts of more than 100,000 euros ($130,000) wiping out not just rich foreigners but Cypriots who saved all their lives for retirement, to build college funds and for other reasons.
No banker or politician has been held accountable for the debacle which has resulted in the government confiscating the money of people who weren’t responsible for the bank’s bad decisions. An independent panel studying the system said political meddling, incompetence, and corruption caused the crisis but no one is being investigated or prosecuted.
 

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