Μια τεκμηριωμένη αποκωδικοποίηση της φανταχτερής αποτυχίας του Χάρη Γεωργιάδη και των φίλων του.. Success Story or Bullshit Story? Five years of Harris Georgiades and his friends
We have become accustomed to Anastasiades’ lies, deceits and obfuscations.
The only two things anyone can be certain about him is that he enjoys imbibing generous amounts of his favourite daily tipple, which I am told is Famous Grouse, and that he is good at selling passports to wealthy Russians. To be fair to Anastasiades, he is not the only one in his cabinet who is economical with the truth. Ionas Nicolaou, the minister of justice, could give his boss a close run on the falsehoods front. With all the scandals and blunders that have occurred under his watch, Nicolaou should have resigned by now, partly for ethical reasons and partly to avoid making a complete fool of himself. But it seems our politicians have very thick skins. Besides, when you see that your boss can get away with it why be the sacrificial lamb.
The one cabinet minister who some -- I emphasise ‘some’ since many people saw that the emperor was bereft of clothes soon after he took up his duties -- had a grudging respect for was the finance minister, Harris Georgiades. Harris was thrown into the deep end when, in the middle of the financial crisis, he had to stand in for Sarris as finance minister while the latter was holed up in a hotel in Moscow waiting in vain to see the Russian minister of finance in the forlorn hope that Russia would come to Cyprus’s financial rescue. Despite some early wobbles, like being given a stern lecture by the head of the European Central Bank’s troika delegation, Harris seemed to adjust to his new duties relatively well. So well in the eyes of Anastasiades that he was appointed as Sarris’s permanent replacement.
Harris was part of the ‘Elysee gang’. The Elysee restaurant/nightclub is a well- known nightspot in central London, which saw its heyday in the 1970s and 1980s when the bourgeoisie of the London Cypriot community would frequent it to see popular singers from Greece, dance and engage in the Greek nightclub tradition of breaking plates. Harris together with Irena Georgiadou, Nicholas Hadjiyiannis and Constantinos Petrides would sometimes meet in the private rooms of the Elysee and work on their strategy for getting Anastasiades elected.
After Anastasiades’ success in the 2013 elections, all four were rewarded with powerful and prestigious posts at a relatively young age. Harris was initially appointed minister of labour and social insurance and then finance minister, Petrides was made deputy minister at the presidential palace, Irena was appointed as Harris’s advisor at the ministry of finance, commissioner for the reform of the civil service and, later with Harris’ help, chairwoman of Hellenic Bank while Hadjiyiannis ended up as chairman of the Coop central bank. Nice jobs for the boys and girls, especially with relatively little or no experience of such posts. This lack of experience was most glaring in the case of Irena’s role at Hellenic Bank. Irena’s lack of banking experience didn’t seem to matter nor it seems her friendship with one of the leading members of Nicosia’s underworld. It certainly raised a number of eyebrows and it was the first sign of Harris’s poor judgement, nepotism and not so subtle signal that he wanted to expand his power base.
However, whatever reservations people had about Harris, his friends and their meteoric rise to power, and there were many, judgement was suspended. The financial crisis was still unravelling and the main concern was whether the economy, especially the banking sector, would stabilise or go into free fall. Partly under pressure from the troika and partly as a result of changes pushed through by the then governor of the central bank, Demetriades, the banking sector began to stabilise. The price Demetriades paid for this was to become Anastasiades’ and DISY’s scapegoat, which ultimately led to him being forced out of the central bank and replaced with Yiorghadji, a far more compliant governor who, unlike Demetriades, was more interested in keeping her job than taking on the powerful vested interests linked to Anastasiades’ law firm, other prominent lawyers and the developers.
Throughout that critical period, Harris had a good working relationship with Demetriades. Perhaps this can be explained by the fact that he was learning on the job and was, to some extent, reliant on Demetriades. With time, Harris became more confident with his brief and he was one of the first, if not the first, in the DISY government to publicly acknowledge that the crisis had been a banking crisis and not a crisis of public finances, which is what Orphanides and some of his friends in DISY and the media had been arguing. With an increased grasp of his brief and his understanding of what had gone wrong, some of us had expected him to act as the wise counsellor to the volatile Anastasiades, who was more interested in using the presidency to enrich himself. But like most politicians who are ambitious, Harris was intent on self-aggrandisement. And the success story provided the perfect vehicle.
There is no doubt that under his tenure as finance minister the economy has stabilised. Growth is just under 4%, unemployment has fallen significantly, the number of company closures has declined and the banking sector is, with the exception of the Coop, stable and attracting deposits. But let’s not be fooled by these developments.
What doesn’t form part of the narrative of Harris’s success story are the following:
Banking sector. As I mentioned above, the banking sector has stabilised. But the stability is, as we have seen with Coop fiasco, fragile. Responsibility for what has happened with the Coop rests squarely on the shoulders of Harris and Hadjiyiannis. Although the problems of the coop had accumulated over a number of years prior to Anastsiades taking office, Harris had 5 years to deal with them.
Instead, he was more concerned about exerting, together with his friend Hadjiyiannis, political control over the bank even if it meant forcing out some key staff who could have played an important role in its restructuring. One of the most important departures was Marios Clerides, the highly respected and experienced banker who had also served as head of the Securities and Exchange Commission. Other departures followed. In the space of 18 months, 5 of the Coop’s top officials had departed, leaving Harris and Hadjiyiannis to run the bank, with disastrous results.
To cap it all, Harris recently made a complete fool of himself when he stated that the breakup of the Coop into a good and bad bank would not cost the taxpayer anything. As Gnomi retorted, Harris should go back to his alma mater, Reading University, and attend some basic courses in economics.
Harris’ mishandling of the Coop led the Cyprus Mail to write a very critical piece about him, highlighting not just his inept and farcical management of the Coop but also his other failings.
Unemployment. Part of the reason for the decline in unemployment has been
the huge brain drain among young graduates. Faced with the bleak prospects of finding jobs or jobs that are secure and pay a reasonable salary, many young graduates have opted to either leave Cyprus or, if they have only recently graduated, not to return home. There is also an army of EU manual labourers who, unable to secure employment during the crisis, returned to their home countries. In both cases it has reduced the unemployment numbers.
Inequality and poverty. In a recent article in the Cyprus Mail, Les Manison, a former economist at the IMF, the ministry of finance and the central bank, points out that income inequality has been increasing in Cyprus.
Although the increase began well before the current administration, it has continued on an upward path. And Manison links this to the reduction in earnings and the increasing use of regressive taxation.
In the 2017 and 2018 country reports on Cyprus, the EU Commission highlighted its concerns regarding the level of poverty, which has increased significantly post-2013.
Private debt. Total private debt, consisting of household debt and non-financial corporate debt, has been on a continuous upward path since 1997. Although it has declined slightly, at over 300% of GDP it is still one of the highest in the world. No government can be expected to tackle such a huge debt over the short or even medium term. However, acknowledging the seriousness of this debt would be a good start. But this would not fit in with the success story narrative.https://www.stockwatch.com.cy/el/blog/640941-socialising-losses-and-privatising-gains
Passports. I have dealt with the selling of passports in a previous issue of Defteri Anagnosi, hence I will not repeat the arguments here. However, I want to remind readers that Harris has been a proponent of the scheme. Presumably it helps the success story, even though those close to DISY, such as the neo-liberalhttps://cyprus-mail.com/2017/10/16/benefits-passport-investment-scheme-indirect/
Demetris Georgiades, head of the Fiscal Council, recently questioned the sustainability of the scheme .
https://www.stockwatch.com.cy/el/article/ktimatagorakataskeyes/d-georgiadis-na-perioristoyn-sto-elahisto-oi-pyrgoi
https://www.stockwatch.com.cy/el/article/ktimatagorakataskeyes/d-georgiadis-na-perioristoyn-sto-elahisto-oi-pyrgoi
Corporate governance. After the catastrophic failure of the banking sector and the poor supervision by the central bank, it had been hoped that the government would have tackled the issue of poor governance. Instead, Anastasiades and Averoff, aided and abetted by Harris, have instigated changes in governance not for the purpose of better management but rather as a means of extending political control over state and semi-state institutions as well as, where possible, banks.
The central bank, CYTA, Hellenic Bank and the Coop are prime examples of how the government has exerted or attempted to exert political control to the detriment of these organisations. This has been especially the case with the central bank and the Coop.
Competitiveness. One of the mantras of DISY and its supporters in KEBE, OEB the media and academia is that Cyprus needs to become ‘more competitive’. And yet according to the 2018 IMD World Competitiveness Ranking, Cyprus ranks a low 41 out of a group of 63 countries(see link below). In fact in 2018, it dropped four places. So even by one of its own measures of success, the DISY government, with Harris at the helm of the ministry of finance, has failed.
https://www.imd.org/wcc/world-competitiveness-center-rankings/competitiveness-2017-rankings-results/
https://www.imd.org/wcc/world-competitiveness-center-rankings/competitiveness-2017-rankings-results/
The Coop debacle has seriously tarnished Harris’ image. So much so that the pro-government Alithia, owned and financed by Koulermou and Hasikos, published two comments, which were clearly directed at Harris.
Αναδημοσίευση σχολίου της Αλήθειας στον Φιλελεύθερο 31/5/2018
Αλήθεια 30/5/2018
Harris is no longer DISY’s golden boy, which will be of great relief to Averoff whose dream of dominating the Cypriot political landscape could have been threatened by Harris’ ascendancy. Indeed, one can imagine Averoff standing in front of the mirror in his Napoleonic pose listening to the latest TV reports about the Coop with a big grin on his face. But Averoff should be careful for what he wishes. The so called ‘success story’ will be seen for what it really is, a bullshit story for which not only is Harris responsible but rather the entire DISY machine run by Napoleon himself.
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