ECONOMICS > Greek Cypriot government to present plan B

NICOSIA - Agence France-Presse

Greek Cyprus' President Nicos Anastasiades (C) chairs a meeting with party leaders as acting President of DYSI party Averof Neophytou (R) looks at him at the presidential palace in Nicosia March 20, 2013. Greek Cyprus overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout on Tuesday, throwing international efforts to rescue the latest casualty of the euro zone debt crisis into disarray. Europe's demand at the weekend that Cyprus break with previous EU prac

Greek Cypriot President Nicos Anastasiades has demanded that a decision on a bailout deal for the near-bankrupt eurozone member must be made on March 21, the official CNA news agency reported.
"A decision on a Cyprus rescue must be made on March 21 at the latest," CNA quoted Anastasiades as saying as he left the presidential palace in Nicosia on March 20 night.

Anastasiades chaired a crisis meeting of his cabinet on March 20, and state television reported he was to present party leaders March 21 with a Plan B at the presidential palace, aimed at securing an EU-IMF bailout for the Mediterranean island.

The CNA news agency said March 21 "is expected to be a difficult day" and went on to quote government sources as saying that Anastasiades would submit the rescue plan to party leaders at a meeting due to start at 0730 GMT.

The proposals were expected "to be put to the vote before the Greek Cypriot parliament in the afternoon," it reported.

Unnamed government sources quoted by the CNA said the rescue plan included the creation of a "structural investment fund, which will be reinforced by various provident funds, real estate, etc..."

"The fund will also be linked with a bond issue and natural gas prospects," the agency said.

State television said the plan might include a levy on bank deposits over 100,000 euros which had been discussed during the cabinet meeting after parliamentarians rejected the terms of an EU-IMF bailout as "blackmail".

The Greek Cypriot authorities have spent the day in frantic talks, after parliament's "No" vote of a measure that would have slapped a one-time levy of up to 9.9 percent on bank deposits as a condition for an EU-led 10-billion-euro ($13-billion) loan.

The 5.8 billion euros the proposal would have raised was crucial to Nicosia getting the full rescue.

March/20/2013

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cezer skonore

3/25/2013 9:40:13 PM

Hans-Joachim Zierke: If Cyprus had their own currency, they would print money to pay the account holders, but since they use Euro, they cannot print Euros. They have to get Euros from Euro zone to pay the accounts. When a crash like this take place, either way account holders loose money, because money will be devalued if printed, or Euro zone puts conditions on the money that account holders cannot withdraw immediately after the rescue and put their money in an US bank or a Turkish bank.

cezer skonore

3/25/2013 9:28:18 PM

Hans-Joachim Zierke: Every country has an insurance system like that. I hope you personally won't need to use those ways to get your bank money. They transfer your account to another bank (generally a govt bank or central bank), it takes very long time for that account to be active. But Cypriot banks do not have that money, actually entire country is bankrupt. When only one or two banks go into trouble, the insurance system works okay. If entire system collapses, there is no money to recover.

Hans-Joachim Zierke

3/23/2013 5:25:55 PM

cezer skonore, thanks to regulation 2009/14/EG, up to €100000 are always guaranteed by deposit protection insurance, even if the bank goes down the drain. That's why Anastisiadis' attempt, to circumvent this protection by a "tax" (and its acceptance by other EU politicians suffering from MNEMO-isolation) was answered with such an uproar all over the EU.

cezer skonore

3/21/2013 8:28:12 PM

Hans-Joachim Zierke: Those banks cannot even give daily ATM withdrawal limit per account. Because of that, they closed the ATM machines.

cezer skonore

3/21/2013 8:04:12 PM

Hans-Joachim Zierke: There is no money in these banks, even to pay back 100,000 Euro limit.

Hans-Joachim Zierke

3/21/2013 5:08:58 PM

Murat ... end of Euro? You suffer from serious disorientation. Dozens of cities(!) in the eurozone have more inhabitants and GDP than Cyprus. If there is no immediate solution, two banks will see an orderly bankruptcy next week, but savings <100000 will be protected in that case. But yes, we need our weekly dose of doom prediction for the €, so thanks. ;-)

The Prisoner

3/21/2013 12:33:09 PM

Putin has the chance now to totally out fox Merkel & the EU. Cyprus could become part of a new Soviet bloc owned and run from Moscow! All gas & oil rights would be totally owned by them which would screw Turkey's claim for drilling rights too. Imagine waking up tomorrow and finding you're run by a bunch of gangsters! The EU has a lot to hang it's head in shame about.

john albay

3/21/2013 11:09:09 AM

poor greek cypriots their leader will swindle them yet again! The question is always the same why should the people bail out the corrupt greedy Banks and why are the Banksters not in front of a court or in jail.?

Murat

3/21/2013 4:23:52 AM

Nice game, playing chicken with Germans. What if Markel does not blink? End of Euro as we know it.

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