Co-op was a dead man walking
Finance Minister Harris Georgiades expressed his astonishment that the Co-op Bank did not collapse earlier than it eventually did, slamming the bank’s management prior to 2013.
Georgiades testified before a committee probing the events leading to the demise of the Co-op Bank.
The Finance Minister said “the real question is not why the Co-op collapsed, but how did it survive for so long without having anything. Zero capital, zero corporate governance and structure. It had no procedures, while the mismanagement of previous years was such that it pushed the organisation off the cliff”. In his nine-hour testimony to the committee, Georgiades painted a grim picture of the way the Co-op was run up to 2013 financial crisis, while praising the last board of the bank saying it was given “an amateur team and asked to lead it to the Champions League”.
Responding to a question posed by the chair of the enquiry, George Aresti, the Finance Minister said that “from 2013, it was clear to me and to the government that privatisation was inevitable. The state had to leave, but no one could then predict how it will be done.”
Regarding the recapitalisation of the nationalised Co-op with an initial EUR 1.5 bln, followed by another of EUR 3.5 bln, Georgiades said that neither the government nor the institutional lenders believed that this money would ever be recovered.
“We did not have such an illusion, that we would recover our money or that we would have gains from the profits made by the Cooperatists,” said Georgiades.
He also defended the decision to grant 25% shares free of charge to the shareholders of the Co-op, saying it was a cabinet decision, and did not cause any delay in the privatisation process of the Co-op.
Criticising the Minister on his comments regarding the Co-op’s downfall, Green MP George Perdikis said that the Minister attempted to put the blame on others and wash his and the governments hands of their own responsibilities.
He said that the Minister has in fact highlighted that he himself was the real manager of issues regarding the Co-op for the past five years and therefore must also take responsibility for its failure over those five years.”
Commenting on Georgiades reference of taking on an “amateur team to play in the Champions League”, Perdikis said: “We never asked him to take the team to the Champions League.
“We asked to play in the amateur league but be the champion of that league. We asked for the bank to be sustainable, to remain, to a great extent, a public organisation and to involve society in the administration of the wealth it has created,” said Perdikis.