Statement by the Eurogroup President on Cyprus

Author (Corporate)
Series Title
Series Details 18.03.13
Publication Date 18/03/2013
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The Eurogroup held a teleconference on the 18 March 2013 to take stock of the situation in Cyprus.

Eurozone finance ministers defended a planned levy on savings in Cypriot banks as a key pre-requisite for a bailout package. However, they also said that ordinary savers should be protected from the tax.

Cyprus' parliament rejected the controversial levy on bank deposits on the 19 March 2013. Cyprus’s finance minister arrived in Russia on the evening of the 19 March 2013 night to try to wrest vital economic assistance from the Kremlin.

The 11th-hour attempt to tap funds from Russia as an alternative to the deposit levy stunned leaders in the EU Institutions, who said they were taken aback by the resistance of Cypriot lawmakers to shifting the tax’s burden exclusively on to deposits over €100,000 – many of which are held by wealthy Russians.

The Cypriot rejection of the levy and appeal to Moscow was seen to dramatically raise the stakes in the island’s financial crisis. If the Cypriot authorities could not raise extra funds in a way that satisfied the eurozone, the island faced the risk of full banking meltdown and possible exit from the eurozone.

Germany warned Cyprus that the European Central Bank (ECB) would pull the plug on its two largest banks (Bank of Cyprus and Laiki) in the absence of a bailout programme and said the terms of the rescue would not change.

Source Link Link to Main Source http://www.eurozone.europa.eu/newsroom/news/2013/03/peg-statement-cyprus-18-03-13/
Related Links
Deutsche Welle, 19.03.13: Euro ministers urge Cyprus to ditch bank levy for smaller savers http://dw.de/p/17zrr
BBC News, 19.03.13: Cyprus MPs reject EU-IMF bailout tax on bank depositors http://www.bbc.co.uk/news/world-europe-21842966
El Mundo, 19.03.13: The crisis? Merkel’s fault, of course! (via PressEurop) http://www.presseurop.eu/en/content/article/3560861-crisis-merkel-s-fault-course
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El País, 19.03.13: Spain says bank deposits “sacred” as Cypriot parliament rejects levy plan http://elpais.com/elpais/2013/03/19/inenglish/1363719453_547903.html
Kathimerini, 19.03.13: Cyprus: It's not about the numbers http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_19/03/2013_488453
EurActiv, 20.03.13: Cypriot bailout to feature high in EU-Russia ‘executive’ talks http://www.euractiv.com/euro-finance/cyprus-bailout-feature-high-eu-r-news-518620
EurActiv, 20.03.13: Cypriot lawmakers reject bailout deal, weakening eurozone http://www.euractiv.com/euro-finance/cyrpus-lawmakers-rebuff-bailout-news-518623
EUObserver, 20.03.13: Germany to Cyprus: your banks might never re-open http://euobserver.com/economic/119493
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Spiegel Online International, 20.03.13: Playing Chicken: Why the Euro Zone Must Play Hardball with Cyprus http://www.spiegel.de/international/europe/cyprus-no-to-bailout-deal-is-a-danger-to-the-euro-zone-a-889893.html
Spiegel Online International: Tag: Cyprus http://www.spiegel.de/international/topic/cyprus/
Cyprus Mail, 20.03.13: Deputies throw out bailout deal http://www.cyprus-mail.com/bailout/deputies-throw-out-bailout-deal/20130320
France24, 20.03.13: Cyprus in crisis talks after bailout rejection http://www.france24.com/en/20130320-cyprus-crisis-talks-russia-rejection-bailout-terms
EUObserver, 20.03.13: Cypriot minister in Moscow as Putin enters bailout crisis http://euobserver.com/news/119496
EUObserver, 19.03.13: Cyprus rejects bailout deal http://euobserver.com/economic/119492
EUObserver, 19.03.13: Cyprus showcases Germany's clumsy leadership in Europe http://euobserver.com/economic/119485
Deutsche Welle, 20.03.13: Not all Cypriots celebrate EU bailout rejection http://www.dw.de/not-all-cypriots-celebrate-eu-bailout-rejection/a-16685537
O Phileleftheros, 20.03.13: Do your homework, Mr Schäuble! (via PressEurop) http://www.presseurop.eu/en/content/article/3566981-do-your-homework-mr-schaeuble
Il Sole 24 Ore, 20.03.13: If Europe Doesn't Stand Up http://www.ilsole24ore.com/art/english-version/2013-03-20/europe-doesnt-stand-051004.shtml?uuid=Abz55lfH
RIA Novosti, 21.03.13: Russia, Cyprus in Second Day of Gas for Cash Talks http://en.rian.ru/business/20130321/180153884/Russia-Cyprus-in-Second-Day-of-Gas-for-Cash-Talks.html
EurActiv, 03.04.13: Russia: Cyprus bailout shows EU’s 'lack of values' http://www.euractiv.com/euro-finance/russia-cyprus-bailout-shows-eu-l-news-518849

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