* Rift between Cyprus president, bank chief deepens
* Bank chief faces criticism over restructuring
* ECB warned Cyprus to leave governor alone
* Bank chief appointed by former government
NICOSIA, Oct 17 Cyprus's president said on
Thursday he would press ahead in seeking the removal of the
island's central bank governor, whose handling of an
international bailout last March he has sharply criticised.
President Nicos Anastasiades said he had furnished legal
authorities with information backing up his claim that Panicos
Demetriades is not up to the job. As an independent official,
the central bank chief can be removed only with the permission
of Cyprus's highest court.
Asked if he would take the matter to court, Anastasiades
told journalists: "I fully respect the constitution of our
country and Eurosystem rules ... consequently there is no other
route but for the legal services of the Republic to process the
information and for the relevant recourse to the Supreme Court."
The president had said in September he might ask the Supreme
Court to rule on whether Demetriades could be sacked. Tensions
between the two men have simmered for months.
Demetriades, a member of the Governing Council of the
European Central Bank, has been accused by the president of
mishandling the Mediterranean island's bailout by international
lenders in March. Cyprus had to close a major bank and seize
savings held in a second in return for 10 billion euros in aid.
Appointed by the previous communist administration, the
central bank chief has been criticised by the right-wing
government elected in February for being slow in restructuring
the banking sector. He has maintained that when he took over,
less than a year before the bailout, he assumed a poorly
regulated banking system which took excessive risks.
The ECB has issued warnings to the Cypriot authorities not
to interfere in his work.
Asked about the dispute in Washington last weekend, ECB
President Mario Draghi told a news conference: "We would have a
dim view of an attempt to constrain, or to threaten, or to
undermine the independence of the central bank."
In a television interview aired late on Wednesday,
Anastasiades said: "I have given a lot of evidence to the legal
services, and it will decide which it will use in the petition."
The Cypriot central bank was not immediately available for
One of the main criticisms directed against Demetriades has
been how, under his watch, one of the afflicted banks
accumulated billions in emergency liquidity aid, only to buckle
and fail when the ECB threatened to pull assistance.
Government officials have also claimed Demetriades was
absent from key decision-making.
Finance Minister Harris Georgiades was scheduled to meet
with Demetriades on Friday, after Anastasiades rebuffed a
request for the two to meet.
"Its not an issue of bad relations, but something a lot more
serious," Georgiades told state radio.
(Writing by Michele Kambas; Editing by Catherine Evans)