NICOSIA, March 11 Cyprus's auditor general, an
anti-corruption watchdog who regularly reports on misuse of
public funds, is the likeliest candidate to replace the head of
the island's central bank who resigned unexpectedly on Monday,
government sources said.
The appointment of Chrystalla Georghadji, whose hard-hitting
annual reports on lapses in public administration have been the
bane of several governments, could come as early as Wednesday,
two sources familiar with the matter told Reuters.
"She has a well-established track record for being
independent and autonomous, which should dispel any notion this
is a political appointment," one source told Reuters on Tuesday.
A second senior government source confirmed Georghadji, 58,
was a strong candidate.
Panicos Demetriades, an appointee of Cyprus's former
communist government and a member of the governing council of
the European Central Bank, quit on Monday, two years into a
five-year term, citing "mainly ... personal and family reasons".
His poor relations with the centre-right administration
which assumed power a year ago dogged his term, particularly
amid the tumult of a chaotic bailout which saw a bank close and
bank deposits raided last year.
A source who saw Demetriades's resignation letter, handed to
the Cypriot finance minister in Brussels, said the banker had
also cited difficulty in working with the board of directors -
most of whom were appointed by the present government.
The Central Bank's board of directors had accused
Demetriades of keeping them in the dark on several key issues -
including a clause in a consultant's contract allowing it to
claim a percentage of money required for the bailout of Cypriot
Demetriades never addressed the essence of their grievances,
contained in a November report by the board's audit committee.
He was not immediately available to comment further on his
resignation on Tuesday.
Nicos Anastasiades, the Cypriot president, had also
frequently accused him of shortcomings, both before and after
lenders agreed to give Cyprus 10 billion euros in aid which
yanked it from the verge of bankruptcy in March 2013.
Cyprus's bailout was the first and so far the only in the
euro zone debt crisis that was partly financed by seizing bank
deposits, affecting thousands of people.
In a confidential memo Anastasiades sent to the European
Commission last October and seen by Reuters, he had accused
Demetriades of being "confrontational", and following the
political agenda of the previous government.
Referring to their testy relations and Demetriades' past
assertions that he would not resign, Anastasiades wrote in the
October memo: "The question which arises is what does he suggest
in order to rectify the situation?"
Persons close of Demetriades frequently complained of
political interference in an institution whose independence was
protected by the ECB.
Georghadji has been auditor general since 1998.