The Parliament of Cyprus on Friday approved key legislation bringing its cooperative banks under the direct supervision of the central bank, narrowly avoiding a rejection which would have placed a 10-billion-euro bailout program in jeopardy.
In a marathon voting session in the early hours of Friday, legislators agreed to a clause enabling co-op banks to receive 1.5 billion euros in bailout money.
In an earlier vote, it had been narrowly rejected by lawmakers from the island’s opposition left-wing parties, who oppose any bailout conditions.
Parliamentary approval for restructuring co-ops, which are small commercial lenders, is crucial to Cyprus receiving the next aid installment of 1.5 billion euros from international lenders.
The money will be plowed into the lenders to recapitalize them.
In a second vote early Friday, Parliament approved the restructuring of the co-ops, Finance Ministry sources said.