Wednesday April 23, 2014 Search
Weather | Athens
23o C
15o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Cyprus focus moves to Brussels as agreement remains elusive

By Nikos Chrysoloras

Brussels - Cypriot President Nicos Anastasiades arrived in Brussels on Sunday afternoon for talks with European Commission President Jose Manuel Barroso, European Council chief Herman Van Rompuy, European Central Bank head Mario Draghi, European Economic and Monetary Affairs Commissioner Olli Rehn and International Monetary Fund managing director Christine Lagarde.

The talks were to take place ahead of a Eurogrop meeting planned for Sunday evening as Nicosia faced a Monday deadline for agreeing a 10-billion-euro bailout in order to ensure the ECB continues to provide its banks with liquidity.

Ahead of the meeting an EU official with direct involvement in the talks told Kathimerini that there has been progress on details of a bailout agreement between Cyprus and the troika but some major obstacles remained.

The main question surrounds the future of the island’s largest lender, Bank of Cyprus. If unsecured deposits (above 100,000 euros) at all Cypriot banks are taxed then large savings at Bank of Cyprus are likely to be taxed between 20 and 25 percent. If the levy is not imposed on deposits at other lenders, the haircut for Bank of Cyprus customers will be much larger.

The option of a full bail in of Bank of Cyprus depositors is still on the table. As with the Popular Bank of Cyprus (Laiki), which is to go through a resolution process, the full bail in option could lead to deposits above 100,000 euros being lost. The only compensation for unsecured depositors will be shares in the “good” bank that will be created by a possible merger between the "healthy" Laiki and Bank of Cyprus entities.

When asked by Kathimerini how the Cypriot economy will survive if all company and personal deposits above 100,000 euros disappear from the country’s two biggest lenders, the EU official said: “Unfortunately, Cyprus’s choices are between a bad scenario and a very bad scenario.”

He acknowledged that the Cypriot economy would experience an unprecedented recession this year, regardless of the outcome of talks in Brussels. However, he added that an agreement was urgently needed by Sunday evening because “otherwise the ECB will pull the plug on the Cypriot banks.” The EU official declined to comment on the positions taken by Nicosia, saying that they are constantly changing,

According to Kathimerini sources, the German Chancellery and the ECB agree that the Cypriot economy is not systematically important for the eurozone. However, due to geostrategic and political reasons, every effort will be made to keep Cyprus in the eurozone. It seems there was intense disagreement over the geostrategic aspect between the chancellery and the office of Germany’s Finance Minister, Wolfgang Schaeuble.

If there is a failure to reach an agreement today, the worst of all scenarios should not be ruled out.

ekathimerini.com , Sunday March 24, 2013 (16:04)  
Woman dies after falling off state building roof
Tunisian sought over employment scam
FBI seeks to identify victims of suspected US child molester who worked abroad, including Greece
Tunnel boring for Thessaloniki metro to resume after two years of inactivity
Credit Agricole said to seek buyer for $554 million Greek loans
Credit Agricole Leasing Greece, Credit Agricole SA’s remaining business in the country, is seeking buyers for around 400 million euros ($554 million) of loans mostly backed by real estate, a...
Greece qualifies for new debt relief after 2013 budget surplus
Greece is set to obtain more debt relief from its international lenders after European officials confirmed on Wednesday that Athens had topped its fiscal targets and achieved a budget surplu...
Inside Business
BASKETBALL
Reds and Greens stay alive in Euroleague
Easter – and home advantage – worked wonders for Panathinaikos and Olympiakos who stayed alive in the Euroleague play-offs beating CSKA and Real Madrid respectively on Monday in Greece. Shak...
BASKETBALL
Greens lose badly as CSKA Moscow
Panathinaikos has a mountain to climb in order to reach the Final Four of the Euroleague after losing at CSKA Moscow on Friday for a second time in two days, only this time it was comprehens...
Inside Sports
COMMENTARY
It´s too soon for Europe to declare victory
There was a time not so long ago when the vast majority of experts agreed that a country could not emerge decisively from a financial crisis unless it solved problems of both “stocks” and “f...
COMMENTARY
Reality´s other side
There is plenty of evidence pointing to the fact that the country’s real economy has hit rock bottom and is currently entering a phase of growth. Those who know the market well tend to suppo...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Credit Agricole said to seek buyer for $554 million Greek loans
2. Greece qualifies for new debt relief after 2013 budget surplus
3. Greece, Germany sign deal for IFG
4. NBG to break free of sovereign shackles with senior bond
5. Greece meets budget target for more debt relief from creditors
6. Woman dies after falling off state building roof
more news
Today
This Week
1. FBI seeks to identify victims of suspected US child molester who worked abroad, including Greece
2. Greek debt swells again as Samaras looks to creditors for relief
3. Tunisian sought over employment scam
4. Woman dies after falling off state building roof
5. Greece sees 2013 primary budget surplus at 1.5 bln euros, says deputy finance minister
6. Greece meets budget target for more debt relief from creditors
Today
This Week
1. Greece's market return mirrors return of tourists
2. Greece startup leaders say they can’t break jobless cycle alone
3. Ground-breaking Good Friday mass signals thaw in Cyprus
4. Mayoral candidates clash over Athens mosque plans
5. Government looks to kick on
6. Greece offers to help find Turkish F-16 lost in 1996
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.