Cyprus Mail daily newspaper

Page 1

Cyprus Mail www.cyprus-mail.com

Thursday, March 21, 2013

€1

CYPRUS

SPORT

WORLD

In stand-off with Nicosia, Germany refuses to blink

Sackings in football are ‘embarrassing’

In Israel, Obama warns Syria on chemical weapons

6

back

11

Deposit haircut back on the table Banks stay shut as government works on Plan B

T

HE government yesterday ordered banks to stay shut until next week as it toyed with the idea of re-submitting a proposal on tax deposits – at a much lower rate than the previous scheme – as it scrambled to avert a financial meltdown. The government was yesterday trying to find alternative solutions after parliament on Tuesday rejected the terms of a bailout from the European Union and turned instead to Russia for a lifeline. “We don’t have days or weeks, we have only hours to save our country,” Averof Neophytou, ruling DISY deputy chairman, told reporters as crisis talks in Nicosia dragged into the evening. Neophytou tried to get the message through to other parties. “I believe we will not be the cursed generation of politicians who will let our country go bankrupt,” Neophytou added. It was suggested yesterday that the government may submit a bill today proposing a haircut on deposits but at lower rates than legislation that was rejected by parliament on Tuesday. MPs threw out a proposed tax on bank deposits in exchange for a €10billion bailout from the EU, a stunning rejection of the kind of strict austerity accepted over the past three years by crisis-hit Greece, Portugal, Ireland, Spain and Italy. The tax – 6.7 per cent on deposits under €100,000 and 9.9 per cent on deposits over €100,000 – was designed to fetch the government €5.8 billion.

The shortfall from the lower rates could be covered by nationalising the provident funds of semistate companies. Bank of Cyprus vice president Evdokimos Xenophontos said the situation could be reversed but warned against touching foreign deposits. “We cannot do it to foreign depositors who trusted us. “This could be theft,” he told reporters after meeting President Nicos Anastasiades last night. Xenophontos said only Cypriots must foot the bill in exchange for bank warrants, better interest rates, etc. “If we protect them (foreigners) even if they leave, they will come back. We lived through an invasion and we overcame the difficulties on our own,” he said. Meanwhile, facing the prospect of a run on banks, the government said lenders would remain shut on Thursday and Friday, making next Tuesday, March 26, the next normal working day. Greece said Greek branches of Cypriot banks would also stay shut there. The extended bank holiday has taken its toll on businesses, with people reduced to limited withdrawals from cash machines. The European Central Bank’s chief negotiator on Cyprus, Joerg Asmussen, said the ECB would have to pull the plug on Cypriot banks unless the country took a bailout quickly. “We can provide emergency liquidity only to solvent

TURN TO PAGE 3

Members of the troika of international lenders arrive at the Presidential Palace yesterday

(Christos Theodorides)

Sarris: nothing concrete from Moscow visit By Stefanos Evripidou FINANCE Nminister Michalis Sarris has vowed to stay in Moscow to reach an agreement on ways to help Cyprus out of the quagmire, after yesterday’s meetings proved inconclusive. Sarris went to Moscow on Tuesday evening ahead of the Cypriot parliament’s rejection of the revised draft bill regarding a one-off bank levy on deposits. Russian assistance had become the great eastern hope of many Cypri-

ots following rejection of the troika’s hard-hitting measures to ‘rescue’ Cyprus, which involved an unprecedented hit to depositors, including small insured savers. Many of the thousands of protestors demonstrating outside parliament on Tuesday waved Russian flags and even held up Gazprom posters, believing Russia would provide a silver lining to the daily forecasts of doom and gloom for the Cypriot economy. However, news of a helping Russian hand were nowhere to be found yesterday following the first day of talks

between Sarris and the Russian authorities. Sarris described his meetings yesterday with Russian Finance Minister Anton Siluanov and Russian First Deputy Prime Minister Igor Shuvalov as “constructive”, a polite term used after almost every meeting among diplomats and politicians, sometimes combined with “fruitful”. “There were no offers, nothing concrete,” said Sarris, adding, “We’ve underscored how difficult the situation is. We’ll now continue

TURN TO PAGE 3


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.
Cyprus Mail daily newspaper by Cyprus Mail Co Ltd - Issuu