Do you think the European Parliament should launch a formal inquiry into the Cyprus débacle? This is the procedure. And here are some questions.
Under Rule 185 of Parliament’s Rules of Procedure, Parliament ‘may, at the request of a quarter of its Members (186 MEPs), set up a temporary committee of inquiry to investigate alleged contraventions of Union law or alleged maladministration in the application of Union law which would appear to be the act of an institution or body of the European Union, of a public administrative body of a Member State, or of persons empowered by Union law to implement that law’. The request is subject to a vote in plenary on a proposal of the Conference of Presidents.
The inquiry will report within 12 months.
The allegation is that the critical financial situation in Cyprus was badly mishandled by the European Council and the troika. The deterioration of the banking situation in Cyprus was exposed at least as long ago as 2010.
The European Parliament has a duty to call to account the executive authorities which are complicit in failing to manage the crisis. These include the European Commission, the European Central Bank, the Eurogroup, the Euro Summit, the President of the European Council, the European Stability Mechanism, the IMF and the European Banking Authority. We have a role, too, in scrutinising a failure of governance at the national level, in this case, both the Cyprus government and the Central Bank of Cyprus.
- Why was the situation allowed to worsen until such time as the two largest Cypriot banks collapsed?
- What lessons were learned from the previous experience in Iceland, Ireland, Spain and Greece that could have been deployed to good effect in Cyprus?
- In particular, was the adverse spill-over to Cyprus of the measures taken in Greece taken into proper consideration? If not, why not?
- How did the Euro Summit meeting on the night of 15-16 March reach its conclusions? How was the meeting prepared ‑ and by whom?
- How and when were the Russian authorities involved in the settlement?
- Did the Cyprus authorities provide or withhold all relevant information at all stages of the crisis?
- Did the national central bank fail in its supervisory role? If so, why?
- What was the role of the troika in the sale of the Cypriot banks?
- How did the Emergency Liquidity Assistance (ELA) operate in the Cypriot case?
- What is the impact of the Cyprus crisis measures on the banking sector in other EU states?
- How can a bail-in of investors be sustainable in the absence of a common deposit insurance fund and a common resolution authority?
- Who exactly proposed (and who opposed) the levy on small depositors?
- Is this is still part of the wider instrument set?
- What aspects of the Cypriot deal apply elsewhere?
- How do the capital controls in Cyprus that were eventually applied (and still apply) conform to EU rules?
Author : Andrew Duff