Cyprus seeks to shield small depositors
Source: Agencies |
March 20, 2013, Wednesday
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Print Edition
Print Edition
THE Cypriot government sought yesterday to shield small savers from a plan that is intended to raise 5.8 billion euros (US$7.5 billion) toward a financial bailout by seizing money from bank accounts.
The plan, which is part of a larger bailout package being negotiated with other European countries, has been met with fury in Cyprus and has sent jitters across financial markets.
Banks in Cyprus will stay shut until tomorrow to prevent a bank run before Parliament has backed the plan to seize a percentage of bank deposits. If the bill goes through some savers could still try to get their money out.
Just hours ahead of the expected debate and vote in the 56-member Parliament, officials sought to limit the impact on small savers. They also hinted Cyprus was looking to limit the amount it has to raise from the grab on deposits. The new plan would leave a shortfall in the amount Nicosia has been told it must raise.
About 300 protesters gathered outside parliament, which was cordoned off by police.
A vote in favor of the bank account confiscation is needed if Cyprus is to get 10 billion euros in rescue loans from its euro partners and the International Monetary Fund. The money will be used to prop up the banks and help Cyprus pay its bills.
A new draft bill discussed in Parliament's finance committee proposed to spare all deposits below 20,000 euros.
The plan, which is part of a larger bailout package being negotiated with other European countries, has been met with fury in Cyprus and has sent jitters across financial markets.
Banks in Cyprus will stay shut until tomorrow to prevent a bank run before Parliament has backed the plan to seize a percentage of bank deposits. If the bill goes through some savers could still try to get their money out.
Just hours ahead of the expected debate and vote in the 56-member Parliament, officials sought to limit the impact on small savers. They also hinted Cyprus was looking to limit the amount it has to raise from the grab on deposits. The new plan would leave a shortfall in the amount Nicosia has been told it must raise.
About 300 protesters gathered outside parliament, which was cordoned off by police.
A vote in favor of the bank account confiscation is needed if Cyprus is to get 10 billion euros in rescue loans from its euro partners and the International Monetary Fund. The money will be used to prop up the banks and help Cyprus pay its bills.
A new draft bill discussed in Parliament's finance committee proposed to spare all deposits below 20,000 euros.
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