Cyprus Engaging in Late-Night Sunday Negotiations to Avert European Central Bank Cut-Off

by Colonel on March 24, 2013

“Negotiations got underway amid a hardening of the stance held by the International Monetary Fund and Germany, who insisted that depositors must take the hit for bailing out the eurozone’s latest crisis economy.

The European Central Bank has threatened to cut off funds propping up Cypriot banks on Monday, precipitating the island’s exit from the euro if agreement was not reached on Sunday night at the emergency meeting between eurozone finance ministers, the president of Cyprus Nicos Anastasiades, and the bailout troika of the IMF, European Commission and the ECB.

The parties considered new proposals that had emerged over the weekend with European officials speaking of a levy of up to 25% on Bank of Cyprus depositors with accounts holding more than €100,000, plus a further levy of up to 5% on similar deposits in other banks.

” – Ian Traynor, Copyright 2013 Guardian News & Media Ltd.

“Cyprus’s leaders sparred over the terms of a 10 billion- euro ($13 billion) bailout with euro-area finance ministers, theEuropean Central Bank and International Monetary Fund in the second Brussels crisis meeting in nine days.

The full 17-nation meeting was delayed by more than two hours as clusters of European and national officials bargained with Cypriot President Nicos Anastasiades, in office for less than a month.

A rescue package hammered out March 16 in Brussels fell apart three days later when the Cypriot parliament rejected a tax on all bank accounts.

A Cypriot mission to Russia, the island’s biggest foreign investor, failed to come up with an alternative. Finance Minister Michael Sarris said yesterday that bank-deposit levies are back on the table.

” — James G. Neuger, Stefan Riecher and Corina Ruhe, Copyright 2013 Bloomberg LP

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