Greek Cyprus approves EU bailout

Greek Cyprus approves EU bailout

NICOSIA - Reuters
Greek Cyprus’s parliament approved an EU bailout on April 30 which will force it to wind down its second-largest bank and impose heavy losses on uninsured depositors at another, conditions that have intensified calls from islanders to exit the euro.

With a razor-thin majority of just two votes, lawmakers approved terms accompanying 10 billion euros ($13.18 billion)in aid from the European Union and the International Monetary Fund.

In a show of hands, 29 lawmakers from the three parties in the center-right government approved the motion, with 27 voting against. .

Government officials had warned the island would fall into chaotic default, unable to pay salaries or pensions, as early as next month without emergency funding.

“Unfortunately the (bailout) is a one-way street for us. It will avert disorderly default and gives, albeit with many hurdles, some prospect of getting us out of the storm,” said Averof Neophytou, head of the governing right-wing Democratic Rally party.

The bailout was unlike any other aid deal, controversially forcing depositors to foot the cost of recapitalizing banks exposed to debt-crippled Greece. Opposition parties argued that the bailout would keep Greek Cyprus in perpetual bondage to foreign lenders.

Attempts to agree a deal triggered financial chaos last month when parliament rejected a plan to make both insured and uninsured depositors pay a levy to fund the recapitalization of banksheavily exposed to debt-crippled Greece.
About 300 demonstrators gathered outside parliament, calling politicians “thieves”.