Tags: Cyprus | banks | crisis | bailout

Cyprus Lawmakers Approve Key Bills for Bailout

Friday, 22 Mar 2013 06:57 PM

 

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Lawmakers in Cyprus approved three key bills Friday that aim to raise enough money to qualify the country for a broader bailout package and help it avoid financial ruin in mere days.

A total nine bills were approved, including a key one on restructuring the country's ailing banks, which lost billions on bad Greek debt; a second on restricting financial transactions in times of crisis; and one that sets up a 'solidarity fund' into which investments and contributions will flow.

More bills to meet the total target of 5.8 billion euros ($7.5 billion) Cyprus needs to secure an international bailout will be brought for a vote over the weekend.

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They include one that imposes a tax of less than 1 percent on all bank deposits, said Averof Neophytou, deputy head of the governing DISY party.

"We are voting for the least worst option," Neophytou said in a speech.

Approval of the tax would come just days after Parliament decisively turned down a plan that would have seized up to 10 percent of people's bank deposits.

Cyprus' president, Nicos Anastasiades, will travel to Brussels on Saturday to present the revised package to the country's prospective creditors, its fellow countries that use the euro currency and the International Monetary Fund. There has been no indication yet that they will accept it.

Cyprus has been told to raise 5.8 billion euros to qualify for 10 billion euros in rescue loans from the eurozone and the IMF.

The country faces a pressing Monday deadline, when the European Central Bank has said it will stop providing emergency funding to the country's banks if a new plan is not in place.

Without the ECB's support, Cypriot banks would collapse on Tuesday, pushing the country toward bankruptcy and a potential exit from the 17-country eurozone.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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