Cyprus’ parliament has delayed a crucial vote until Tuesday about a controversial bailout deal reached by the EU and the IMF at the weekend.
The newly-elected center-right president Nicos Anastasiades presented the deal as the only solution possible to avoid bankrapci and is currently seeking support from other political parties to ratify the agreement. He has already promised to soften the conditions for small savers.
Under the agreed bailout terms, all customers of Cypriot banks would have to take losses on their deposits in exchange for 10 billion euros in financial aid.
‘I am pleased to announce that the Eurogroup consider that a great progress have been made and was able to reach a political agreement with the Cypriot authorities tonight on the cornerstone of an adjustment program. All Member States supports this agreement’, said Eurogroup’s president Jeroen Dijsselbloem.
Despite reassurances by EU leaders in the past, bank customers with less than 100,000 euros would have to pay almost 7%. Those with more than 100,000 euros would pay 9.9%.
The unprecedented bailout conditions have sparked public outrage on the island and caused a run on bank machines over the weekend. ATMs were depleted within hours. The situation also forced the Cypriot government to halt all transfers.
‘Against its background the Eurogroup consider that in principle financial assistance to Cyprus is guaranteed to safeguard financial stability in Cyprus and the Euro-area as a whole by providing a financial envelope which has been reduced up to 10 billion European Commission’, said Eurogroup’s president Jeroen Dijsselbloem.
Cypriot banks hold large amounts of Russian capital. Germany reportedly insisted on the present terms, as Berlin sees the Mediterranean island as a tax haven and money-laundering hub for Russian oligarchs.
Russian President Vladimir Putin on Monday called the bailout deal “unfair, unprofessional and dangerous”.