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Cyprus names new central bank chief

March 11, 2014

NICOSIA, Cyprus (AP) — Cyprus’ auditor-general was appointed Tuesday as the new governor of the central bank, closing out a year-long dispute that had pitted the bailed-out country’s president against the bank’s embattled, outgoing chief.

A government statement said Chrystalla Georghadji will take up her new post April 11 and that European Central Bank chief Mario Draghi has been informed.

The appointment comes a day after outgoing Governor Panicos Demetriades resigned for what he said were mainly “personal and family reasons.”

President Nicos Anastasiades was highly critical of Demetriades’ handling of last year’s rescue deal with other eurozone countries and the International Monetary Fund. The deal included seizing some bank deposits and crushed the financial sector.

Anastasiades had even threatened to begin legal proceedings to oust Demetriades for failing to do his job properly, a move that prompted some to question whether the central bank’s independence was being attacked.

Demetriades, who was appointed by the previous president, had vowed not to quit for fear of becoming a lightning rod for the country’s economic woes. He said in a brief statement Tuesday that he “always acted in the best interests of our country.”

Anastasiades dismissed opposition party suggestions that Demetriades’ departure after only serving a third of his five-year tenure was engineered by the government in order to give it full control over the central bank.

Anastasiades said Demetriades’ resignation “made it easier for the government and himself.”

Cyprus’ Attorney-General Costas Clerides said his decision not to prosecute a case involving the alleged forgery of a contract that Demetriades signed with consultancy firm Alvarez & Marsal were in no way connected to the resignation.

Georghadji, 57, has held the post of auditor-general since 1998 after stints at Cyprus’ finance ministry and securities and exchange commission.