Cyprus’ president has pledged to keep the nation in the euro, saying an EU bailout had "contained the financial crisis." On Saturday depositors at the Bank of Cyprus are expected to discover how much they stand to lose.
President Nicos Anastasiades told a conference of civil servants in Nicosia on Friday that Cyprus "will not leave the euro."
By accepting the tough bailout conditions set by the European Union, European Central Bank and International Monetary Fund earlier this week, his government had achieved the best possible outcome for the country under the circumstances, he said.
"We have averted the risk of bankruptcy," Anastasiades said. "The situation, despite the tragedy of it all, is contained."
However the president criticized the so-called troika of lenders for making "unprecedented demands that forced Cyprus to become an experiment."
In order to secure the 10-billion-euro ($13 billion) bailout, Cyprus had to come up with 5.8 billion on its own, which is to be raised through a hefty levy on bank account deposits of 100,000 euros or more.
Depositors await confirmation of losses
Laiki, or Popular Bank, is to be wound up under the terms of the bailout, and deposits there over that amount could be lost altogether.
At the Bank of Cyprus, the country's largest lender, officials had previously spoken of a loss to big depositors of 30 to 40 percent. According to a report broadcast on private broadcaster Sigma TV on Friday, however, that figure could be considerably higher.
It cited a copy of what it said was a central bank decree stipulating thatdepositors in the bank will get shares in the bank worth 37.5 percent of their deposits over 100,000 euros, while the rest of their deposits may never be paid back. The conditions of the losses are expected to be formally announced on Saturday.
The idea of dipping into private bank accounts to finance a bailout is unprecedented in the eurozone and it has raised questions about the security of people's savings in some of the 17 nations that use the euro as their currency.
A previous plan, which would have seen a one-time tax of a minimum 6.75 percent on all Cypriot bank account savings, no matter how small, had been voted down by the country's lawmakers last week.
Meanwhile, commercial banks in Cyprus returned to normal business hours on Friday, a day after they reopened under heavy security for the first time in almost two weeks. Cyprus’ central bank later lifted curbs on domestic credit card payments.
ccp, pfd/ch (AFP, Reuters)
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