Daily Archives: March 20, 2013

Archives March 20, 2013 posted by

Cyprus seeks Russian bailout aid, EU threatens cutoff

CYPRUS pleaded for a new loan from Russia on Wednesday to avert a financial meltdown, but won no immediate relief after the island’s parliament rejected the terms of a European bailout, raising the risk of default and a bank crash.

Finance Minister Michael Sarris said in Moscow he had reached no deal with his Russian counterpart Anton Siluanov, but talks would continue.

Russia’s finance ministry said Nicosia had sought a further 5 billion euros on top of a five-year extension and lower interest on an existing 2.5 billion euro loan.

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Deputies throw out bailout deal

 

PARLIAMENT last night rejected a second draft bill on the proposed levy on bank deposits in Cyprus, considered a precondition to any bailout of the troubled island. 

The initial deal banged out in Brussels at the weekend imposed a 6.75 per cent levy on small savers with insured deposits of under €100,000 and 9.9 per cent on those over €100,000.

Following the global and local backlash to the idea of taxing insured depositers, eurozone finance ministers decided on Monday night that the finer details of the levy could be left up to Cyprus as long as the near-bankrupt member state is able to come up with a €5.8 billion ‘bail-in’ which would then trigger a €10 billion EU/IMF ‘bailout’.

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Our view: Did deputies heroic negativity contemplate the consequences?

 

IN THE END, the twice-postponed debate on the bills for the levy on bank deposits was finally held yesterday evening and the House of Representatives overwhelmingly rejected it. Not even President Anastasiades’ party, DISY, supported it, its 19 deputies abstaining. The defeat of the bills was expected as all the political parties, apart from DISY had taken a stand against the idea of the haircut on deposits.

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Last hope now appears to lie with Russia

AS PARLIAMENT yesterday rejected a bank levy bill, the government was working on a contingency plan, dispatching its finance minister to Russia.

Finance minister Michalis Sarris flew out to Moscow some 24 hours before initially announced.

The economy chief’s mission, informed sources said, was to sell the Russians the latest idea geared at preventing the flight of billions of euros from the island’s already hammered banks.

They said the finance minister’s trip to Moscow was moved forward to give Sarris the chance of striking a deal with the Russians as it was a foregone conclusion that the Cyprus parliament would reject the bank levy as it stood yesterday.

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Sarris: I did not resign

FINANCE Minister Michalis Sarris denied reports yesterday that he had resigned, as lawmakers were set to debate a divisive tax on bank deposits to secure an international bailout.

Sarris, who was in Moscow yesterday, told Reuters by text message there was “no truth” to the reports, which surfaced shortly after noon.

Daily Phileleftheros posted on its website that Sarris had offered to step down before departing for Russia. President Anastasiades did not accept the resignation, the daily said.

Other media outlets quickly reproduced the report, but did not back up the claim.

Kathimerini said Sarris would be tendering his resignation on returning to the island.

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EAC offers reprieve on three month bond

THE Electricity Authority of Cyprus (EAC) decided yesterday not to redeem a three-month government bond, in order not to place additional burdens on the cash-strapped state.

The move was intended as “a show of tangible support to the Republic in these critical times,” read a statement by the EAC’s pension fund management committee.

“At the same time,” it added, “we shall continue to maintain faith in the financial system of Cyprus, by keeping the deposits of the pension fund in Cypriot banks and cooperatives.”

In December the EAC lent the state €100 million, after desperate pleas from the state that it was facing imminent bankruptcy.

The cash came from the workers’ pension funds.

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Greece close to picking buyer for Cypriot bank units

 

GREECE is close to completing a deal for a Greek takeover of the local units of Cypriot banks, after at least two of the country’s biggest lenders showed interest, government officials and bankers said yesterday.

Greece has been rushing to wrap up the deal in a bid to protect its battered banking system from the fallout from a plan to impose a levy on bank deposits in Cyprus, but its efforts have been held up by delays in Nicosia in approving the tax.

Eurozone finance ministers excluded the Greek branches of Cypriot banks from the controversial tax included in the island’s international bailout on condition that those units would be transferred to Greek banks.

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Co-ops: everything under control on our end

CO-OP bank ATMs have been refilled and are ready to serve the public during the bank closure according to Co-op representative Constantinos Lyras. 

He assured Co-op customers they would be compensated for any losses a proposed haircut of deposits would incur with high-interest stock. He called on customers to remain calm and not attempt to withdraw all of their money as soon as the banks re-open. “We must show trust towards our banking system,” he said.

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Cyprus tourism officials in Russia to ease concerns

THE EUROGROUP decision to impose a levy on Cypriot banks has caused a slew of  concerns from tourist agents in Russia and the UK according to the Cyprus Tourism Organisation (CTO). 

A group of CTO representatives led by CTO chief Alecos Orountiotis and general-manager Marios Hannides left for Moscow yesterday where they will participate in Russia’s Tourism Exhibition due to begin today. They also hope to ease fears and assure Russians of the safety of Cyprus as a tourist destination.

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No cash? You can now donate your shopping points to help the poor

THE recent developments in the bailout crisis, and the ensuing uncertainty regarding the levy on bank deposits, has further jeopardised efforts to help poor families, volunteers said yesterday.

Paphos business-woman Pavlina Patsalou who heads up the group of volunteers which she started with Paphos councillor George Sofokleous to help what has now grown to over 400 families, said the news of bail-in of depositors has come as a terrible shock.

Whatever would be ultimately decided, the immediate future for all Cyprus would be difficult in the coming weeks, Pataslou said.

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