July 12, 2013 / 5:10 PM / 7 years ago

Cyprus president says no-one will go unpunished for meltdown

NICOSIA, July 12 (Reuters) - Cyprus will pursue those responsible for the banking sector collapse and fiscal difficulties that led to the island’s international bailout, President Nicos Anastasiades said on Friday.

A judicial board of inquiry is investigating the financial sector’s demise, focused on banking practices and economic policies stretching back to 2006. Authorities said last week that criminal investigators would assist with the probe.

Speaking at a news conference in Nicosia, Anastasiades said: “I don’t want to focus on the responsibilities of those who led us to the decisions of March ... But what I will stress is our resolve that none of those who led our country to this tragic state (will) be left unpunished.”

Cyprus agreed a 10 billion euro aid deal with the International Monetary Fund and European Union in March, the fourth euro zone country to do so, after its outsized banks lost billions from lending to crisis-hit Greece. The island had also seen years of slippage in public finances.

In return for the financial lifeline, it was forced to close one of the island’s biggest lenders and seize uninsured deposits exceeding 100,000 euros from thousands of savers in order to cover capital shortfalls in two major banks.

Rightist Anastasiades took office in March after ousting the five-year-old Communist government in a February election.

His government was immediately plunged into a tumultuous three weeks of bailout negotiations to avert a debt default during which the European Central Bank warned it would cut emergency funding to the island’s main banks.

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