Cyprus Bailout Swells to $30 Billion
(BRUSSELS) — The cost of bailing out Cyprus has swollen to euro 23 billion ($30 billion), with the crisis-hit country having to take on the lion’s share of the measures needed to avoid bankruptcy, according to a draft document by the country’s international creditors. The draft document, obtained by The Associated Press Thursday, says the country will have to find 13 billion euros ($17 billion) — an increase on the 7 billion euro contribution agreed during the country’s chaotic bailout talks last month. The money will be raised by imposing heavy losses on large bank deposits, levying additional taxes, privatizations and a part-sale of the central bank’s gold reserves. “The sheer size of the increase has underlined the extent of the enormous challenges facing Cyprus itself,” Jonathan Loynes of Capital Economics said in an analyst note. The so-called troika of international creditors — the European Commission, the European Central Bank and the International Monetary Fund ...
Cypriot Finance Minister Michalis Sarris Resigns
(NICOSIA, Cyprus) — Cypriot Finance Minister Michalis Sarris has resigned following the launch of a government investigation into how the country’s economy nearly collapsed last month. President Nicos Anastasiades has accepted Sarris’s resignation. The minister has faced strong criticism for his handling of the Cyprus’s negotiations with its international creditors. Sarris, who had headed the country’s now defunct Laiki Bank last year in a bid to save it from collapse, told reporters he decided to step down to ease the investigation ordered earlier Tuesday. Sarris, 66, was appointed finance minister after Anastasiades’ conservatives won general elections in February, days before the island was overwhelmed by its financial crisis. Anastasiades acknowledged accepting the finance minister’s resignation, adding that “Mr Sarris’, decision to submit his resignation, for reasons of political responsibility in order to ease the work of the Investigating Committee, constitutes ...
ECB's Draghi phoned Napolitano over resignation reports: press
ROME - European Central Bank President Mario Draghi phoned Italian President Giorgio Napolitano after media reports that the 87-year-old head of state was planning to resign early to clear the way for new elections, newspapers reported on Sunday.
Found 1 month ago on channel Reuters
Cyprus: The E.U. ‘Rescue’ That Risks Backfiring
With its $13 billion agreement to bail out Cyprus, the E.U. this weekend thought that it had successfully doused the latest threat to its single currency, the euro. Cyprus has run into trouble because its banks are heavily exposed to Greek debt. Instead, the nature of the bailout – which features a levy on the bank deposits of ordinary Cypriots — has sparked a bank run on the island that threatens to spill over to other European countries. The sudden eruption of panic could still be contained; European officials on Sunday night were looking to revise the terms of the agreement ahead of a vote on the rescue package in the Cypriot parliament, in order to shield smaller depositors. E.U. officials insist that Cyprus was always a special case. But by forcing ordinary citizens to fund the bank rescues up front, through a tax on deposits, the E.U. is setting a precedent that is chilling to people in other countries, like Spain, which has looked at a bailout for its own beleaguered banking ...
Exclusive: Draghi lectures euro zone leaders about labor costs
BRUSSELS - European Central Bank President Mario Draghi gave EU leaders a crash course in macroeconomics late on Thursday, emphasizing his concerns about low productivity and high labor costs hurting the euro zone's prospects, officials said.
Found more than 1 month ago on channel Reuters