Transparency and Accountability: Civil society calls for reforms
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Presentation at the LSE-London School of Economics conference on "The Cyprus Recovery Plan: A Midterm Assessment". Where I make two points: First that the narrative presenting Cyprus as a money-laundering-tax-haven is an unsubstantiated exaggeration used to facilitate depositor bail-in in dealings during the Cyprus crisis; second, that Cyprus civil society is mobilizing against corruption, demanding transparency and accountability from its political system. Concrete proposals made by civil society groups and the successes so far are discussed.
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Transparency and Accountability: Civil society calls for reforms
- 1. Stavros A. ZENIOS University of Cyprus Senior Fellow, The Wharton School, USA Transparency and Accountability: Civil Society Calls for Reforms
- 2. Key points ¤ We were wronged ¤ We were wrong
- 3. We were wronged: Impact of Greek PSI on eurozone countries !! Cyprus! Greece! Germany! Belgium! France! Portugal! ! ! ! ! ! ! ! %!of!GDP! 23.03! 11.65! 0.14! 0.56! 0.25! 0.25! Source:!EBA!and!author’s!calculations.!EBA!data!available!at! http://www.eba.europa.eu/documents/10180/15935/CY006.pdf! !
- 4. We were wronged: ad hoc bail-in ¤ Directive 2014/59 issued in 2014. ¤ Article 44 -scope of bail-in: ¤ Exempts covered deposits ¤ Accrued salary ¤ Pension benefits ¤ Liabilities arising from the provision of goods or services that are critical to the daily functioning of the creditor. ¤ Capital controls Cyprus bail-in detrimental to notion of common currency.
- 5. We were wronged: unfairness of the bail-in ¤ Bailed-in depositors of BOC contributed €3,806mil in cash and received shares at €1.00 per share. ¤ CPB contributed net assets €425mil and received shares at €0.503. ¤ Capitalization of BOC was €371,95mil and received shares at €20,66. ¤ 81.5% bailed-in depositors, 18.1% ex-CPB, 0.4% BOC shareholders. ¤ 82.7% bailed-in depositors, 9.2% ex-CPB, 8.1% BOC shareholders. Fail the John Rawles “veil of ignorance” test.
- 6. We were wronged: narrative of money laundering
- 7. Spiegel, 5 November 2012 German Secret Services Secret report
- 8. Basel Institute of Governance AML Index Cyprus 4.93 Holland 5.03 Germany 5.80
- 9. Financial Action Task Force
- 10. Narrative of money laundering Is it true? No it is not! Fits Noam Chomsky theories.
- 11. We were wrong Shadow economy Political corruption Cronyism
- 12. Shadow economy Shadow Economies All over the World Policy Research Working Paper 5356, The World Bank Country % GDP Switzerland 8.5 USA 8.6 Singapore 13 Ireland 12 Italy 21 Greece 24 Cyprus 25 EU-27 18.5
- 13. Political corruption ¤ GRECO Report of Council of Europe 2011 ¤ Transparency in party financing ¤ Eight significant recommendations ¤ Only 2 partially complied by 2013 Don’t get mad, get even.
- 14. Transparency Now! ¤ Petition ¤ 5000 signatures ¤ Public pressure –TV, radio, newspapers, social media ¤ Elections challenge Approved by Council of Ministers, February 2015.
- 15. Cronyism ¤ Electoral reform: Horizontal Voting
- 16. Active citizens: Regenerate, Reform, Reveal E-petitions
- 17. Conclusions ¤ We are fixing our mistakes ¤ EU InsLtuLons should fix theirs
- 18. Βιβλιογραφία Zenios, S.A., The Cyprus debt: Perfect crisis and a way forward. hXp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2233239 Zenios, S.A., Fairness and reflexivity in the Cyprus bail in hXp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2409284