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Cyprus: did president urge in-laws to withdraw bank deposits before bailout?

Cypriots line up outside a Laiki bank branch in Cyprus' capital, Nicosia, on March 28, when banks opened after a 12-day lockdown.


Patrick Baz

A Cypriot newspaper has published a report that claims a relative of Cyprus President Nicos Anastasiades withdrew 21 million euros from Laiki Bank just three days before Cyprus decided to tax its citizens’ bank deposits to help pay for a 10 billion euro ($13 billion) euro zone bailout.

Due the deal, uninsured depositors at Laiki Bank face losing up to 60 percent of deposits above 100,000 euros, according to the RT Network.

More from GlobalPost: Cyprus tax on bank deposits sends global markets plunging

Cypriot newspaper Haravgi reported that a company owned by the father of the president's son-in-law transferred millions of euros to London and the Bank of Cyprus, which was considered safe at the time, on March 12 and 13, Der Spiegel reported.

Cyprus’ finance minister, Michalis Sarris, said the government knew in advance that the Eurogroup planned to impose a “haircut” on bank deposits of more than 100,000 euros, Haravgi reported, according to RT Network.

That raises the question: Did the president tip off his in-laws?

The online edition of Greece's Sunday newspaper Proto Thema wrote, "there are legitimate suspicions that some people had insider information about the decisions eventually reached by the eurozone,” according to Der Spiegel.

If Anastasiades’ relatives were forewarned, they may not have been the only ones. Some 132 companies and individuals transferred a total of 700 million euros out of Cyprus banks in the first half of March, according to Cypriot and Greek news media, Der Spiegel reported.

Anastasiades has vigorously denied the accusations. "I neither knew (about the details of the bank levy) in advance (of the meeting) nor would it have been possible to be engaging in battle with the Eurogroup until the early hours of Saturday and passing out inside information at the same time,” he told reporters on Sunday, according to Der Spiegel.

The president has suggested the allegations are an attempt to deflect attention away from the role played by the previous Communist administration in bringing down the country's economy.

The conservative Anastasiades was elected in February, ending five years of Communist rule.

Speaking to reporters on Monday, Anastasiades said the allegations against him should be covered in an investigation into the economic crisis by a panel of inquiry to be sworn in Tuesday.

“It would never have been possible for me to be fighting to avoid what was imposed on us and at the same time to have given inside info,” Anastasiades told reporters, according to the website of The Cyprus Weekly. He said the panel's investigative remit should include "everything that concerns me or even relations by marriage," the paper said.

Whatever the truth of the Haravgi report, allegations that dozens of firms and wealthy individuals sent hundreds of millions of euros out of the country in the days ahead of the imposition of capital controls, can only add to the feelings of confusion and anger among ordinary Cypriots.

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