Thursday March 5, 2015 Search
Weather | Athens
20o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Anastasiades says eurozone left Cyprus with no other choice than to accept deposit tax

Cypriot President Nicos Anastasiades said on Saturday that his government was presented with a fait accompli in its negotiations with the eurozone, forcing it to accept a one-off tax on depositors as part of its bailout deal.

Cyprus agreed to a one-off tax on deposits, 9.9 percent for those above 100,000 and 6.75 percent for those under 100,000 at a Eurogroup meeting on Friday. The levy will raise some 6 billion euros and paves the way for Nicosia to receive a 10-billion-euro bailout.

In a written statement he issued on Saturday afternoon, Anastasiades said his government had been pressured into the decision.

“In the extraordinary meeting of the Eurogroup, we faced decisions that had already been taken and came across faits accomplis,” he said.

“On Tuesday, March 19 we would either choose the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis, which would put a definitive end to the uncertainty and restart our economy,” added the recently elected president.

Anastasiades will issue a televised message to the Cypriot people on Sunday.

In Athens a Greek Finance Ministry official confirmed to Kathimerini on Saturday that “all three Cypriot banks active in Greece [Bank of Cyprus, Cyprus Popular and Hellenic] will have their Greek branches absorbed by a Greek credit institution.”

He stopped short of naming the Greek lender to absorb them, although source say this may be state-owned Hellenic Postbank.

Here is Anastasiades’s statement in full:

It is well known that the deep economic crisis and the state of emergency in which the country has found itself did not come about in the last fortnight since we have undertaken the administration of the country.

The state of emergency and critical nature of the times do not allow me, as they do not allow anyone, to embark on a blame game.

In the extraordinary meeting of the Eurogroup, we faced decisions that had already been taken and came across faits accomplis through which we were faced with the following dilemmas:

On Tuesday, March 19 we would either choose the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis, which would put a definitive end to the uncertainty and restart our economy.

A possible choice of the catastrophic scenario option would have the following consequences:

1. On Tuesday, March 19, immediately after the holiday weekend, one of the two banks in crisis would cease to operate, since the European Central Bank, following the decision already taken, would terminate the provision of liquidity. The second bank would suspend its work, and neither could avoid collapse. Such a phenomenon would instantly lead 8.000 families to unemployment.

2. The State would be obliged to compensate depositors in response to the obligation regarding guaranteed deposits. The capital required in such a case would amount to about 30 billion euros, which the State would be unable to pay.

3. A proportionate amount corresponding to the deposits of thousands of depositors for deposits over 100.000 Euro, would be led to a vicious cycle of asset liquidation, and these depositors would suffer losses of over 60%.

4. Such an uncontrolled situation would push the whole banking system into collapse with all the attendant consequences.

5. Thousands of small and medium enterprises, and other businesses would be driven to bankruptcy due to their inability to trade.

As a result of the above, the service sector would be led to a complete collapse with a possible exit from the euro. That, in addition to the national weakening of Cyprus, would lead to devaluation of the currency by at least 40%.

The second choice was the controlled management of the crisis, through the decisions taken and which can be summarized as follows:

1. Ensuring the liquidity of the banks and the rescue of the banking system through their recapitalization.

2. Rescuing 8.000 jobs in the banking sector and thousands of others which would be lost as a corollary of not maintaining the operations of banks.

3. Total rescuing of deposits, with just the exchange of a small percentage of savings with shares of the two banks. Currently, these shares do not have their full value, but with the economic recovery they will repay most it not all of the amount that will be cut.

4. This option results in a drastic reduction of public debt, makes it manageable and sustainable and relieves future generations from the burden of repayment.

5. It saves provident and pension funds and avoids taking other tough measures such as wage and pension cuts that were put on the negotiations table.

6. It avoids further recession and the risk of the vicious circle of a second memorandum.

We are not aiming to gloss over the situation. The solution chosen may be painful, but it was the only one that would allow us to continue our lives without adventures. It's a decision that leads to the historic and permanent rescue our economy.

In the next few hours we will all have to take responsibility. Tomorrow I will address the Cypriot people.

ekathimerini.com , Sunday March 17, 2013 (00:30)  
Golden Dawn supporters sentenced over attack against ANTARSYA member
Greek girl, 17, seriously injured in Rome during school trip
No ´diabolical plan´ to topple Greek government, says Juncker
Police, ministry dodge blame for migrants order
Unemployment edges up to 26 pct in December
Greece's jobless rate rose to 26 percent in December from an upwardly revised 25.9 percent rate in the previous month as the economy shrank slightly in the last quarter of 2014, statistics a...
Where Greece hopes to find cash - and why the ECB says no
Cash-strapped Greece had been hoping that the European Central Bank -- which is about to pump billions into the eurozone economy -- would help ease its torment, but so far the ECB has been m...
Inside Business
SOCCER
Super League restarts, but behind closed doors
Deputy Minister for Sports Stavros Kontonis announced on Wednesday the resumption of the Super League this weekend after it was suspended last week following crowd trouble at the Athens derb...
SOCCER
Marinakis fines Olympiakos players
Olympiakos president Evangelos Marinakis on Monday fined the team 500,000 euros for disappointing performances and called on them to make a «sacrifice» to win trophies or leave. "Olympiakos ...
Inside Sports
COMMENTARY
Greek-Turkish relations
There are other issues beyond those focusing on the economy that the government, formerly of the “Indignants” and currently adapting – willingly or unwillingly – to eurozone realities, is fa...
EDITORIAL
Government policy
The issue of irregular immigration is taking on serious dimensions on an international level, while in Greece it is bordering on crisis levels. The government’s duty is to handle the issue w...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Unemployment edges up to 26 pct in December
2. Where Greece hopes to find cash - and why the ECB says no
3. Golden Dawn supporters sentenced over attack against ANTARSYA member
4. Greek girl, 17, seriously injured in Rome during school trip
5. No ´diabolical plan´ to topple Greek government, says Juncker
6. Greece has backup plan if March bailout cash fails to arrive, says Varoufakis
more news
Today
This Week
1. Greek-Turkish relations
2. Greece struggles to make debt math work amid bailout standoff
3. Greece seeks to plug its 'Bermuda Triangle' of lost taxes
4. Draghi details sought as ECB's QE plan poised to be fleshed out
5. Government policy
6. Greece, QE programme to top ECB meeting in Nicosia
Today
This Week
1. Greece to make international protest over Turkey reserving Aegean air space
2. A fierce battle looms
3. SYRIZA feeling the pain
4. The Greek tax drama
5. The unlikely winners of Greece's surrender on euro
6. Varoufakis to make six reform proposals at Monday's Eurogroup
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.