Cyprus bailout brought ‘end to uncertainty’

‘We’ve put an end to the uncertainty that affected Cyprus and the euro area over the last few days,’ Dutch Finance Minister Dijsselbloem said.

Eurozone head Jeroen Dijsselbloem said Monday that a deadline-day deal to resurrect a Cyprus bailout brought to a close 10 days of uncertainty.

He was ‘convinced this is a much better deal’ than the one to raid all savings accounts, which unravelled last weekend, he added.

‘Laiki bank will be resolved (wound up) immediately with the full contribution of equity shareholders, bondholders and uninsured deposit holders,’ Dijsselbloem said.

Deposits below an EU 100,000-euro insurance threshold would be folded into a ‘good’ bank created at the Bank of Cyprus, he added.

However, he said the ‘depth of haircut on the Bank of Cyprus will have to be worked out over the coming weeks by the Troika.’

Bailout bosses could ‘not put a figure on that,’ he said, but the end-goal would be ‘a bank that gives a capital ratio of about 9 percent … by the end of the programme’ in 2018.

Arrangements for the re-opening of the banks would be discussed later on Monday, he said, but the necessary laws in Cyprus had already been passed.

A full Memorandum of Understanding with the EU-IMF Troika would be drawn up by the second week of April with parliamentary ratification around the eurozone by the end of the month, he added.

EU Economy Commissioner Olli Rehn said the Cypriot government would decide when to lift capital controls imposed during the 10-day crisis, which saw daily withdrawal limits at cash machines limited to as little as 100 euros per day.

Associated press writer for human rights observers – Ignacio damigo, reports from Europe.

Category: European Crises