Vatopedi case ‘cost Cyprus 4 bln euros’

The Vatopedi Monastery on Mount Athos, which was embroiled in a huge land swap scandal that emerged in 2008, has been linked to losses of some 4 billion euros for the Cypriot banking system from non-performing loans issued by Marfin Popular Bank, according to figures provided to a parliamentary committee in Nicosia by former Greek MP Dimitris Tsironis, who served as head of the parliamentary committee that investigated the case. “We estimate that at least 4 billion euros was lost through this affair,” the head of the Cypriot committee, Dimitris Syllouris, said after the end of yesterday’s session, adding that the committee will expand its investigation. “We have to proceed to a very deep and enlarged investigation because this really is a huge scandal that was created at the expense of the credit system of Cyprus, including the use of monasteries and companies registered in Cyprus, with suspicious consequences,” said Syllouris. Tsironis stated that the Cypriot Parliament was given all data collected by the Greek investigation and that “the Cypriot [banking] problem would have been much more limited had it not been for [the Vatopedi case], as this scandal has doubled its problems.” which mark the boundaries of its so-called interest rate corridor, at 6.5 percent and 3.5 percent respectively. The decision matched the expectations of all economists surveyed by Bloomberg. The central bank has been cutting rates this year to spur a slowing economy and prevent capital inflows from strengthening the lira. The bank made no reference in its statement to the protests that have engulfed Istanbul and other cities in the past three weeks, leading business and tourism groups to warn of risks to the economy. Capital inflows have weakened due to “uncertainty over interest rates at the global level,” and the bank will maintain “flexibility in its monetary policy in both directions” as required by international conditions, it said yesterday. Credit growth in Turkey “remains above the reference level,” the bank said.

Eurobank buyback.

Eurobank Ergasias announced yesterday that its suc- cessful hybrid bond buyback has boosted its Core Tier 1 capital by 307 million euros, in addition to the share capital increase of 5.8 billion euros that has been covered by the Hellenic Financial Stability Fund (HFSF). The buyback process was concluded last Friday.

Serb budget.

Serbia’s budget gap widened to 77 percent of the full-year target in the first five months, as the government continued to repay debts amid declining revenue collection. The central government’s deficit expanded to 93.6 billion dinars ($1.1 billion) of the 122-billion-dinar shortfall planned for the entire year. The consolidated gap, which includes both central and local governments, totaled 78.3 billion dinars in the first five months, as local governments and the country’s health fund ran budget surpluses, the Finance Ministry said.