Cyprus Rejects E.U. Bailout Deal

Wednesday, March 20, 2013

Lawmakers in Cyprus turned down a €10 billion package from the European Union yesterday, calling it not a bailout but blackmail. It would have taxed ordinary bank deposits and left bondholders alone, a widely-criticized move that all but ensured its defeat.

The European Central Bank had threatened to "halt liquidity" if Cyprus didn’t push through the bailout package, but after the Cypriot Parliament turned them down the bank backpedalled, saying it would keep sending money their way. But this crisis, another in a long list for the E.U., isn’t over yet. Cyprus president Nicos Anastasiades will need to rework a plan that he can pass in parliament to lift the country out of its dire financial hole. 

Joseph Cotterill has been reporting on this for the Financial Times. Lee Buchheit has been an advisor to many countries with soverign debt problems. He is a partner at Cleary Gottlieb Steen & Hamilton


Lee Buchheit and Joseph Cotterill

Produced by:

Joe Hernandez

Comments [2]

jennifer from new york

I am just goinig to keep leaving the same comment every time WNYC reports on Cyprus. The fact is that Cyprus and Malta are eating the world's supply of migratory songbirds. So my feeling is that if they are going to get bailed out they should definitely agree to stop their destructive traditiona. No one will remember $13 billion in a few years from now when there are no more robins and warblers.

Mar. 20 2013 03:51 PM
Larry Fisher from Brooklyn, N.Y.

Cypriot Parliament did the right thing. You could have had a run on the banks, with people pulling out their money.
What hasn't been reported is what percent of the money was going to be taxed on ordinary account holders . From what I understand it was between five percent of your account to almost ten percent depending on how much money you have. That would make most people take their money out before the action took place.
What a disaster of an idea!

Mar. 20 2013 01:49 PM

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