Cyprus became the latest euro zone domino to teeter in 2012 just when the worst of the crisis appeared to be over. In March 2013, a compromise rescue plan backed by euro zone finance ministers called for Cyprus to wind down one largely state-owned bank, Popular Bank. The raid on Popular Bank was intended to raise most of the 5.8 billion euros that Cyprus was required to raise as part of the bailout.
Cyprus president demands bailout decision on Thursday
Cyprus President Nicos Anastasiades has demanded that a decision on a bailout deal for the near-bankrupt eurozone member must be made on Thursday, the official CNA news agency reported.
“A decision on a Cyprus rescue must be made on Thursday at the latest,” CNA quoted Anastasiades as saying as he left the presidential palace in Nicosia on Wednesday night.
Anastasiades chaired a crisis meeting of his cabinet on Wednesday, and state television reported he was to present party leaders Thursday with a Plan B at the presidential palace, aimed at securing an EU-IMF bailout for the Mediterranean island.
The CNA news agency said Thursday “is expected to be a difficult day” and went on to quote government sources as saying that Anastasiades would submit the rescue plan to party leaders at a meeting due to start at 0730 GMT.
The proposals were expected “to be put to the vote before the Cyprus parliament in the afternoon,” it reported.
Unnamed government sources quoted by the CNA said the rescue plan included the creation of a “structural investment fund, which will be reinforced by various provident funds, real estate, etc...”
“The fund will also be linked with a bond issue and natural gas prospects,” the agency said.
State television said the plan might include a levy on bank deposits over 100,000 euros which had been discussed during the cabinet meeting after parliamentarians rejected the terms of an EU-IMF bailout as “blackmail”.
The Cypriot authorities have spent the day in frantic talks, after parliament’s “No” vote of a measure that would have slapped a one-time levy of up to 9.9 per cent on bank deposits as a condition for an EU-led 10-billion-euro ($13-billion) loan.
The 5.8 billion euros (HK$58.1 billion) the proposal would have raised was crucial to Nicosia getting the full rescue.