NPLs and the unaffordable luxury of populist lawmakers


By Stelios Orphanides

Following the Macedonian conquest of Greece, Alexander’s campaign and death, the socio-political landscape in the Greek world changed dramatically. As a result of the concentration of political, military and economic power in the hands of a few who reigned over a number of successor kingdoms of what was once the vast empire Alexander had conquered, citizens in former Greek city-states overnight became ‘idiotes’ – persons, stripped of the right to participate in their respective city’s affairs, minding only their own business. As in many of those city-states philosophy had thrived in the past aiming at teaching citizens how they should participate in politics for the benefit of the city’s society, unsurprisingly, adjustment was needed to cope with the new political situation.

One philosophic school, for example, founded by the Cypriot Zenon taught that the ability to endure pain was the road to happiness. The Athenian Epicurus’ teachings went in another direction: the goal was ‘ataraxia,’ i.e. tranquillity, freedom from fear or suffering which could be achieved through ‘hedone,’ i.e. pleasure, the greatest good for humans. Epicurus opened a school in Athens, the ‘Cepos’ or Garden, which unlike all other schools of the time did not restrict membership or admittance to free men but also accepted slaves and women, including prostitutes. Hedonism was the goal of life, so the doctrines propagated at the Cepos were achieved not by indulging in material pleasures but by satisfying one’s basic needs, like food or protection from the elements of nature, without seeking unnecessary things beyond that.

By the time Epicurus was 70 years old his teachings had spread across the Greek world as they offered comfort to those who wanted to endure life without the freedoms of the past, the rights of a citizen to vote, getting elected or holding those in power accountable. One of the prominent rulers in the Greek world at the time was Pyrrhus, the king of Epirus and a distant relative of Alexander. Pyrrhus, widely known for his Pyrrhic victories against the Romans, once hosted Fabricius, an emissary from Rome. He initially sought to bribe his guest by offering him a large sum of money but Fabricius remained unimpressed. The king subsequently attempted, again unsuccessfully, to scare the Roman by bringing him close to an elephant he had hidden behind a curtain.

Later, when Pyrrhus and Fabricius were having supper in the presence of the king’s advisors, the talk turned to politics and philosophy. One of Pyrrhus’ advisors, Cineas, started talking about what Epicurus was teaching; avoiding getting involved in politics but instead focusing on pleasure, i.e. what the philosopher considered to be the ultimate good. “O Hercules,” exclaimed Fabricius interrupting Cineas. “May Pyrrhus and the Samnites believe these teachings as long as they are our enemies”.

On Monday lawmakers at parliament’s finance committee received a first briefing on the provisions of a proposed law submitted by deputy Anna Theologou and supported by Marinos Sizopoulos, chairman of Edek, and George Perdikis, chairman of the Greens.

The bill aims at offering relief to debtors not servicing their loans by extending them immunity against foreclosure provided they signed their loan agreement with their bank before September 2014, when parliament past the current foreclosure legislation to tackle strategic default without making it really effective.

If the bill was enacted, a Central Bank of Cyprus official present at the meeting explained, then more than half of the loans extended by the banks would be affected. A finance ministry official warned that the effects of the bill would be incalculable and it could potentially increase the banks’ capital needs.

Oh Hercules, why don’t our enemies have politicians with the brains of Theologou, Sizopoulos and Perdikis?


About Author

Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • A is B

    I think she could persuade me to do anything.

    • Neroli

      She’s frightening! Wonder why they changed her photo from the earlier one!

      • A is B

        I like to be frightened.

  • Copernicus

    Whatever legislation is passed or not it may be to little too late. The roots of the NPLs problem goes back to 2013 when the government had the opportunity to find a solution for all the banks and create an asset management company to manage the NPLs with experts from the UK or USA. Instead, and when the first to voice such a solution was the interim board of the Bank of Cyprus, the whole political party system and the Church came out strongly against what was the best solution when NPLs were about 30%. The government of the day instead of allowing the set up at the Bank of Cyprus got rid of all the members of the interim board unceremoniously with the famous list of 16 new members which the MOF presented to the Russian shareholders’ lawyers and voted in the Board headed by an academic who had zero experience in banking but was related to the head of the banking union ETYK. The same government weakened Demetriades at the time so he cannot vote as the holder of the Laiki shares in BoC in lieu of being the Resolution Authority.

    The next big mistake was the fact that the developers did not want to see any risk of losing control of BoC and they appointed a CEO who had no clue about NPLs instead of the former CEO of the Irish Bank Resolution Corp. The CEO chosen was purposely selected not to split the BoC. The government decisions back in 2013 meant that the local banks experimented with three internal bad banks and they have since faced local legislation that is hostile to foreclosure and also additional regulatory capital and increased provisions. had the NPLs been sold back in 2013 to an asset management company all the issues of additional capital would not have arisen as an asset management company does not have to provision.

    The peculiar thing is that Ross and Vekselberg hired a top former CEO of Deutsche bank and yet the extreme value Ross found has not materialised and he has lost 2/3 of his investment! One wonders how a very sharp minded Ross has not had the success he had in Ireland.

    So when MPs try to protect borrowers we must not be too critical since this is the level of their knowledge; the ones who are extremely well paid and have experience overseas at reputable banks need to explain themselves since they know better what should have been the solution and yet they have gone native and protect those who brought the banks down by over borrowing and not paying. Now with possibly the best of the passport selling over it begs the question what will happen to developers and if tourism takes a hit then who will be able to pay the restructured loans?

  • Jim

    I wonder what happened to the original report of exactly the same story & all the comments.
    How convenient to replace it. The truth was obviously annoying someone.
    This is not the first time this has happened.
    On previous occasions, the excuse was we decided to transfer the story to the business section ( removing any comments of course ).
    Shame on Cyprus mail.