NEWS

Softer stance by European Parliament on Cyprus

Strong reaction to bailout measures imposed on Cyprus has brought signs of a softer stance from the European Parliament and a concession by the Nicosia government for depositors who see their capital suffer a haircut.

Martin Schulz, the head of the European Parliament, said that small depositors in Cyprus should be protected, proposing that there should be no haircut to account whose balance does not exceed 25,000 euros, in an interview to German newspaper Welt am Sonntag on Sunday.

The Eurogroup decision on the 10-billion-euro bailout for Cyprus provides for all deposits up to 100,000 euros to suffer a 6.75 percent one-off tax, while those over 100,000 to have 9.9 percent deducted in favor of the island’s flagging economy.

Faced with a very strong reaction by the majority of the people as well as local politicians, the Cypriot government has leaked that depositors may also get bonds on future natural gas earnings in return for the loss of their deposits.

On Saturday a man drove his bulldozer to the gate of a cooperative bank in Limassol in protest for not being able to withdraw his cash.

George Osborne, the UK Chancellor of the Exchequer, promised the members of the British armed forces and government officials based on Cyprus who have accounts in Cypriot banks that they will be compensated from the haircut Nicosia is imposing.

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