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Cyprus Parliament passes bailout bills

Last Updated: Saturday, March 23, 2013 - 10:44

Nicosia: The Cypriot Parliament on Friday passed emergency bills aimed at clinching a bailout deal with international lenders, but left until Saturday to vote on the contentious deposit tax.

The Parliament agreed to creates a so-called investment fund, aimed at helping raise 5.8 billion euros demanded by the Eurogroup as a condition for a 10 billion euro bailout.

The Cypriot Parliament on Tuesday rejected a Eurogroup demand to tax bank deposits, only to make a U-turn after the European Central Bank issued an ultimatum that emergency liquidity to the Cypriot banks will be discontinued on Monday - effectively forcing a bank meltdown.

Lawmakers also set limits to the outflow of capital to prevent a drain of the banks when they reopen on Tuesday at the end of a week-long bank holiday.

A third bill passed by parliament provided for the consolidation of Cyprus Popular Bank which would have collapsed at opening on Tuesday. The bank will transfer unsecured deposits of over 100,000 euros and bad loans to a "bad" bank which will ultimately be liquidated.

The bank will continue functioning on a much smaller scale which will include deposits fewer than 100.000 euros and good loans.

Eurogroup finance ministers will meet on Sunday to talk on a revised bailout package for Cyprus.

Cyprus president Nicos Anastasiades, who was engaged in non-stop negotiations during this week, will fly to Brussels on Saturday for the final phase of the bailout negotiations.

Leaders of all parliamentary parties will accompany Anastasiades in Brussels in a show of national unity in the face of strong pressure on Cyprus by its Eurogroup partners.


First Published: Saturday, March 23, 2013 - 10:37
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