Cyprus rules out writedown on bank deposits | Business| Economy and finance news from a German perspective | DW | 01.03.2013
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Cyprus rules out writedown on bank deposits

The government of eurozone member Cyprus has made it clear that it opposes suggestions to impose losses on bank deposit owners. Such a demand had been floated to breathe some life into stalled bailout talks.

Finance Minister Michael Sarris of Cyprus said Friday he ruled out any writedown on bank deposits in return for advancing talks among international lenders about a bailout scheme for the eurozone nation.

"Really and categorically - and this does not only apply in the case of Cyprus but for the world over and the eurozone - there really couldn't be a more stupid idea," Sarris told reporters in Nicosia.

Prior to his statement, scenarios had been floated over how Cyprus could ever afford to repay a bailout bill of an estimated 17 billion euros ($22.1 billion) amounting to about the size of its whole economy.

More tough talks ahead

One of the reported options under discussion had been for those holding deposits in excess of 100,000 euros in Cypriot banks to accept losses if their lender was to be wound down.

Sarris said he acknowledged the proposal had been aimed at making his country's debt sustainable, but emphasized there were other ways to handle the bailout load.

He indicated that part of the solution could lie in the privatization of selected enterprises, but added that time was needed to make a proper job of it.

Cyprus' request for a rescue package, which has been on hold for eight months, is likely to be discussed again at a meeting of eurozone finance ministers next Monday, with a final decision expected to be reached by the end of March.

hg/ipj (dpa, Reuters)

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