The Cypriot government is now sweating over a possible rejection by the island’s parliament of the shocking set of measures imposed on Nicosia for the eurozone to bail its economy out of a likely default, announced in the early hours of Saturday.
The Cypriot government is preparing the bill to be tabled in Parliament probably on Sunday in an emergency session, as everything will have to be voted by Monday night for Cypriot banks to open on Tuesday.
President Nicos Anastasiades is to meet with party leaders at 8.30 p.m. on Saturday evening, before an emergency cabinet meeting on Sunday afternoon, in his effort to rally support for the measures following the huge reaction they have generated in Cyprus. They entail the immediate haircut of all bank accounts, the increase in tax on interest and on corporate incomes and a number of tough privatization projects.
The question is whether the Cypriot House of Representatives will approve of the bill given that the two main parties that supported Anastasiades in the presidential election, the Democratic Rally (DISY) and the Democratic Party (DIKO) do not have an overall majority. They account for 28 out of the plenary’s 56 members, but among the DIKO deputies is also Nicolas Papadopoulos, a dissident who recently resigned from vice-president of the party in disagreement with its support of Anastasiades.
The bill might also get the support of some deputies from minor European Party (EVROKO), while the presidential adviser Giorgos Vassiliou, a former president himself who is in touch with many people in the Left, has been enlisted to try and convince some deputies to vote in favor of the bill. However AKEL, the main party of the Left, has signaled its opposition to the measures.
At 5 p.m. central bank governor Panikos Demetriades started a meeting with the island’s top bankers.
Sources from Germany confirmed that had the bailout package not included a Cypriot bank account haircut it would never make it through the German parliament.