Cyprus is given 4 days for new plan to get funds
Source: Agencies |
March 22, 2013, Friday
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CYPRUS has four days to agree on a new plan to raise funds to avoid bankruptcy, with the European Central Bank warning yesterday that it will pull the plug on the country's banks at the start of next week if no solution is found.
Facing the ultimatum, the Cypriot government was racing to cement a new package that will please both Parliament and the country's potential international creditors.
Amid indications that the new plan will include restructuring Cyprus' troubled second-largest lender, Laiki, long lines of people formed at the bank's ATMs in the center of the capital.
"We need cash. We have families, children, grandchildren and expenses, and the banks have been closed since Saturday," said Andri Olympiou.
Banks have been shut since an initial bailout plan last weekend proposed raiding bank deposits, raising howls of outrage. They will remain closed until Tuesday to prevent a run. Although ATMs have been functioning, many often run out of cash.
"I've been to five ATMs, looking for the one with the smallest queue. The others had really long queues, at least 40 or 50 people," said Peter Larkin, a Nicosia resident waiting in line with his five-year-old daughter.
Leaders of Cyprus' political parties met with the president to consider a range of measures that could raise the 5.8 billion euros (US$7.5 billion) needed to qualify for 10 billion euros in rescue loans from the eurozone partners and the International Monetary Fund.
The "Plan B" will likely include restructuring Cyprus' troubled banks, some form of Russian help, dipping into pension funds and taking up an offer from Cyprus' wealthy Orthodox church to contribute. Some form of tax on bank deposits is also possible.
One new development yesterday was the government's announcement of its intention to create a so-called "Investment Solidarity Fund."
The fund is intended to appeal to "the patriotism of Cypriots" and draw on contributions from ordinary Cypriots, businessmen and foreign investors, said Demetris Syllouris, head of a small right-wing party who was in a meeting with the president where the "Plan B" was being hashed out.
The legal and technical details were still being worked out, and the bill would be reviewed by the Cabinet later yesterday before being sent on to Parliament for a vote, government spokesman Christos Stylianides said.
As there was unanimous deal by party leaders to set up the fund, it was likely the bill would be passed in a vote later.
Facing the ultimatum, the Cypriot government was racing to cement a new package that will please both Parliament and the country's potential international creditors.
Amid indications that the new plan will include restructuring Cyprus' troubled second-largest lender, Laiki, long lines of people formed at the bank's ATMs in the center of the capital.
"We need cash. We have families, children, grandchildren and expenses, and the banks have been closed since Saturday," said Andri Olympiou.
Banks have been shut since an initial bailout plan last weekend proposed raiding bank deposits, raising howls of outrage. They will remain closed until Tuesday to prevent a run. Although ATMs have been functioning, many often run out of cash.
"I've been to five ATMs, looking for the one with the smallest queue. The others had really long queues, at least 40 or 50 people," said Peter Larkin, a Nicosia resident waiting in line with his five-year-old daughter.
Leaders of Cyprus' political parties met with the president to consider a range of measures that could raise the 5.8 billion euros (US$7.5 billion) needed to qualify for 10 billion euros in rescue loans from the eurozone partners and the International Monetary Fund.
The "Plan B" will likely include restructuring Cyprus' troubled banks, some form of Russian help, dipping into pension funds and taking up an offer from Cyprus' wealthy Orthodox church to contribute. Some form of tax on bank deposits is also possible.
One new development yesterday was the government's announcement of its intention to create a so-called "Investment Solidarity Fund."
The fund is intended to appeal to "the patriotism of Cypriots" and draw on contributions from ordinary Cypriots, businessmen and foreign investors, said Demetris Syllouris, head of a small right-wing party who was in a meeting with the president where the "Plan B" was being hashed out.
The legal and technical details were still being worked out, and the bill would be reviewed by the Cabinet later yesterday before being sent on to Parliament for a vote, government spokesman Christos Stylianides said.
As there was unanimous deal by party leaders to set up the fund, it was likely the bill would be passed in a vote later.
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