Cyprus MPs approve first EU bailout measures | News | DW | 22.03.2013
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Cyprus MPs approve first EU bailout measures

The Cypriot parliament has given its approval to a "solidarity fund" hammered out by the government in a desperate bid to rescue an EU bailout by a Monday deadline. The measures will pool state assets.

On Friday evening, members of parliament voted in favor of a national solidarity fund to be set up through the nationalization of public and private sector pensions and of capital controls.

The measures are an attempt to prevent a run on the island's troubled banks when they are finally due to open on Tuesday after a break of over a week.

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Parliament on verge of key vote

The votes followed prolonged talks between party leaders on the package aimed at raising 5.8 billion euros ($7.5 billion) to unlock EU-IMF loans worth 10 billion euros.

The original plan to raise the money, announced almost a year ago, would have seen Cyprus raise the funds through a levy on people's bank accounts. However, this was met with angry protests on the island and elicited an angry response from Moscow, presumably in part because many wealthy Russians have bank accounts in Cyprus.

Since then, Cyprus has been working on its Plan B, part of which was meant to be the ill-fated loan from Russia.

More contentious measures remain to be debated including a tax of up to 15 percent on bank deposits of 100,000 euros ($129,000) and more, a levy that - in a slightly different form - was rejected by MPs on Tuesday.

hc/rc (Reuters, AFP)

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