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| George Osborne criticises handling of Cyprus bailout | George Osborne criticises handling of Cyprus bailout |
| (35 minutes later) | |
| George Osborne has criticised the handling of the Cyprus crisis by European and Cypriot authorities. | George Osborne has criticised the handling of the Cyprus crisis by European and Cypriot authorities. |
| The UK chancellor told the Treasury Committee that initial plans to impose a levy on bank deposits was a "mistake" and had "not been well handled". | The UK chancellor told the Treasury Committee that initial plans to impose a levy on bank deposits was a "mistake" and had "not been well handled". |
| Mr Osborne also revealed the government was in talks with Cypriot authorities to find a "British solution" regarding branches of Laiki Bank in the UK. | Mr Osborne also revealed the government was in talks with Cypriot authorities to find a "British solution" regarding branches of Laiki Bank in the UK. |
| The bank is due to be wound up under Cyprus's bailout deal. | The bank is due to be wound up under Cyprus's bailout deal. |
| "It has not been well handled over the last very days, but you have to respect the fact that it's a newly elected president facing incredibly difficult decisions," Mr Osborne told MPs. | "It has not been well handled over the last very days, but you have to respect the fact that it's a newly elected president facing incredibly difficult decisions," Mr Osborne told MPs. |
| Cypriot President Nicos Anastasiades has only been in the job for a matter of weeks before the bailout was negotiated. | Cypriot President Nicos Anastasiades has only been in the job for a matter of weeks before the bailout was negotiated. |
| 'Considerable damage' | |
| Mr Osborne said the UK did not have prior knowledge of the original plan to impose a bank levy, which would have seen small depositors effectively charged 6.75% of their deposits to fund the bailout. | Mr Osborne said the UK did not have prior knowledge of the original plan to impose a bank levy, which would have seen small depositors effectively charged 6.75% of their deposits to fund the bailout. |
| Had the measure been imposed, he said, "very considerable damage would have been done to the principle of deposit insurance". | Had the measure been imposed, he said, "very considerable damage would have been done to the principle of deposit insurance". |
| But the chancellor showed his support for the new deal agreed with Cyprus, which involves massive restructuring of the banking sector, saying it "leaves Cyprus with a sustainable debt situation". | But the chancellor showed his support for the new deal agreed with Cyprus, which involves massive restructuring of the banking sector, saying it "leaves Cyprus with a sustainable debt situation". |
| The chancellor also said the future of UK branches of Laiki Bank - also known as Cyprus Popular Bank - was the subject of discussions between the Treasury and Cypriot authorities. | |
| Laiki Bank is due to be closed as part of the restructuring plan, but there are a small number of branches in the UK serving around 13,000 customers. | |
| "Discussions are taking place at the moment. I can't say a great deal more about them but we are engaged in negotiations to try to avoid the branches in the UK becoming sucked into the Cypriot resolution process," Mr Osborne said. |