Coalition partners to discuss crisis in Nicosia as FinMin seeks bank solution

As an unprecedented decision by eurozone leaders to partly fund a Cyprus bailout by taxing Cypriot bank deposits sent jitters across Europe, prompting the government in Nicosia to try overhauling the levy, the Greek government expressed solidarity while seeking a lender to acquire the Greek branches of troubled Cypriot banks.

Prime Minister Antonis Samaras was to discuss the dramatic developments in Cyprus with his coalition partners – PASOK chief Evangelos Venizelos and Democratic Left leader Fotis Kouvelis – at 6 p.m. on Tuesday. Finance Minister Yannis Stournaras, meanwhile, was to seek a Greek lender to acquire branches of Cypriot banks in Greece. Hellenic Postbank and two major private banks were said to be interested. Stournaras insisted that savings in Greek branches of Cypriot banks would not be affected by the levy. Still, there were fears of bank runs by jittery Greek savers.

On Monday Samaras, who met Stournaras and Administrative Reform Minister Antonis Manitakis to discuss Greece’s pledges to creditors, assured Nicosia of “the capacity of Hellenism to remain strong in hardship,” adding that “prosperity and growth will return soon, to Cyprus and Greece.”

PASOK sources condemned the tax as “punitive and myopic,” while opposition SYRIZA chief Alexis Tsipras spoke of “Germany’s vengeful mania against the Cypriots.”

With a vote on the bailout due at 6 p.m. on Tuesday, Cypriot ministers were scrambling on Monday to rework the tax proposal and woo skeptics. The new plan aims to lighten the load on small savers and increase it on the rich, many of whom are Russians. This did little to ease anger in Moscow where Russian President Vladimir Putin slammed the tax as “unfair and dangerous,” as Russian Prime Minister Dmitry Medvedev said bilateral ties must be “reviewed.”

Before the Cypriot Parliament can vote on any proposed changes they must be approved by eurozone finance ministers, who were to talk by teleconference on Monday night.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.