Tag Archives: Cyprus

FYI, News

CYPRUS SECURES THE €10 BN BAILOUT IT REQUIRES TO AVOID BANKRUPTCY

In a last minute deal Cyprus managed to secure the €10 bn bailout it requires to avoid bankruptcy. The Cypriot parliament agreed on a deal which will see bank deposits over €100,000 taxed. The troubled Laiki Bank will also be wound up, and split into two parts a “good” bank and a “bad” bank. The largest Cypriot bank, the Bank of Cyprus, will undergo major restructuring. Deposits in the Bank of Cyprus over €100,000 have now been frozen.

It is believed the levy on bank deposits will be around 30%. The Cypriot finance minister said they were keen to protect individuals and small depositors. The majority of account holders with over €100,000 are wealthy Russians. The deal has angered Moscow, who have accused the eurozone of using the crisis to go after Russian money.

Laiki and Bank of Cyprus remain closed with ATM withdrawals limited to €100 a time.

Read More: BBC

FYI, News

CYPRUS IS RUNNING OUT OF TIME TO SECURE BAILOUT

The troubled island nation of Cyprus is running out of time to secure a bailout form it’s eurozone partners this weekend. If it fails to secure the bailout the nation will default on it’s debts, and will go bankrupt. Cyprus needs to raise 5.8 billion euros ($7.5 billion) in order to secure 10 billion euros in loans form the eurozone.

Lawmakers in Nicosia have rejected a plan to raise part of the 5.8 billion euros ($7.5 billion), by taxing private bank accounts. The banks in Cyprus have been closed all week, and the ECB has told Cyprus to keep them closed until Tuesday, in order to prevent a run on the banks. However, Cypriots have spent the week queuing at ATMS to withdraw as much of their money as possible, fearful of what the government may do.

The European Central Bank has told Cyprus they will not continue to provide emergency funding past Monday, if a plan is not in place to secure the 5.8 billion euros.

The uncertainty has caused stock markets to fall throughout Europe. Russia has been angered by the prospect of bank accounts being taxed, as Cyprus is a favourite place for Russians to do business. However, Germans will be unwilling to be seen to bail out wealthy Russian oligarchs. Cyprus and Russia currently do $¼ trillion of business annually, and Cyprus has debt repayments of $53 billion annually to Moscow. The close business ties between the two nations has led many to speculate that Russia will offer to bailout Cyprus, if Europe will not.

Lawmakers are looking at ways to restructure the countries ailing banks. It looks likely that Laiki Bank will close, with it’s assets moved to other banks. Laiki Bank has suffered heavy loses due to it’s exposure to the Greek debt crisis.

Read More: France 24

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CYPRUS BAILOUT DEAL MAY SEE BANK ACCOUNTS TAXED

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The small European island nation of Cyprus faces bankruptcy if they do not receive a €10 billion bailout from Brussels. However, part of the bailout deal under discussion will see a one off levy on all bank savings. The deal will see small saving up to €100,000 taxed at 6%, and deposits over €100,000 taxed at nearly 10%.

The proposals have angered Cypriots who feel betrayed by Brussels and their government. Many see the levy as a way for the eurozone to access the vast deposits in Cyprus made by wealthy Russians. As well as the proposed bank account tax Cyprus also faces the same strict spending cuts and tax hikes Greece has experienced as part of their bail-out deal.

The Cypriot government was due to vote on the bail-out package today, but the vote has been postponed until tomorrow, over fears the government would lose the vote.

The uncertainty caused by the bailout deal has seen markets slide across Europe and America and many have argued that a tax on savings will see investors pulling their money from Europe in general.

Banks in Cyprus will remain closed until Wednesday, over fears of a run on the banks, as people have been withdrawing as much as they can from ATM’S over the last 24 hours.

Read More: BBC