Roundup: Cypriot president seeks to remove central banker

Cyprus's president Nicos Anastasiades has asked the Attorney General to set in motion the procedure for the removal of Central Bank governor Chrystalla Georghadji, the government spokesman said on Sunday.

His decision was made after Georghadji, who was accused of a conflict of interest, turned down demands from Anastasiades and all parliamentary parties to step down.

"I have no intention of resigning and I will continue to perform my duties under the constitution. The issue is considered by me to be over," Georghadji said after a dramatic night meeting with Cypriot President Nicos Anastasiades.

But government spokesman Nicos Christodoulides said that the president has reached a conclusion that the institution of the Central Bank has been gravely wounded by its governor's failure to reveal to him facts which form the basis of a conflict of interest.

"The president has no other choice but to ask the Attorney General to activate the constitutional provisions for the removal of the Central Bank governor from her post," the spokesman said.

The procedure for her removal involves the appointment of a special panel of High Court judges to issue an opinion on the existence or not of a conflict of interest.

Anastasiades had summoned Georghadji at the presidential palace at the end of daylong consultations with party leaders and Central Bank board members to discuss a crisis over the alleged conflict of interest.

Georghadji is alleged to have violated a clause in the contract of her appointment by not revealing that she was not legally separated from her estranged husband.

The government spokesman said that she also withheld information that her husband is acting as a lawyer for Greek banker and businessman Andreas Vgenopoulos in a legal case with Cypriot authorities over the collapse of a bank in the 2013 bailout of Cyprus and the resolution of its banking system.

Cyprus was forced by its international lenders to wind down Cyprus Popular Bank, also known as Laiki, after it drew 9.1 billion euros in Emergency Liquidity Assistance from the European Central Bank. Vgenopoulos, a former Laiki CEO, is accused by Cypriot authorities of having caused the collapse of the Bank.

The crisis over Georghadji climaxed when an executive member of the Central Bank quit his post on Friday, accusing her of ordering a bank to provide her with a list of lawmakers with loans in arrears. H also alleged that he had told the board members that the state's assistant Attorney General had been bribed.

After conferring with Anastasiades, all parliamentary party leaders demanded that Georghadji steps down.

"Under the circumstances it seems that the resignation of the governor and the members of the board of the Central Bank are unavoidable," said governing DISY party in a statement.

Opposition left wing AKEL party chief Antros Kyprianou said that the situation which has been created and the interest of the economy demanded the resignation of both the governor and the Board of the Central Bank.

President Anastasiades was quoted as telling party leaders that Georghadji had to go either by resigning or after a tough legal battle.

Anastasiades appointed Georghadji to the post a year ago, but he has no power to remove her except after a decision by a panel of the country's High Court for actions violating her contract.

Georghadji is a member of the Governing Council of the European Central Bank and is almost certain to request its support.

The state television quoted a government official as saying that ECB president Mario Draghi told President Anastasiades in a telephone conversation that as long as all Cypriot legal provisions are applied he has no reason to intervene. Endit