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Cyprus leader Anastasiades attacks bank bailout terms | Cyprus leader Anastasiades attacks bank bailout terms |
(35 minutes later) | |
Cyprus President Nicos Anastasiades has urged eurozone leaders to help his country's biggest bank and sharply criticised the bailout agreed in March. | Cyprus President Nicos Anastasiades has urged eurozone leaders to help his country's biggest bank and sharply criticised the bailout agreed in March. |
The "haircut" imposed on large deposits under the 10bn-euro (£8.6bn) bailout led to businesses losing large amounts of the capital they kept in banks. | The "haircut" imposed on large deposits under the 10bn-euro (£8.6bn) bailout led to businesses losing large amounts of the capital they kept in banks. |
His comments came in a letter sent last week but leaked on Wednesday. | His comments came in a letter sent last week but leaked on Wednesday. |
Losses were imposed on big deposits in Bank of Cyprus (BoC) and Laiki Bank. BoC is now in trouble, the letter said. | Losses were imposed on big deposits in Bank of Cyprus (BoC) and Laiki Bank. BoC is now in trouble, the letter said. |
"I urge you to support a long-term solution to Bank of Cyprus' thin liquidity position," Mr Anastasiades said. | "I urge you to support a long-term solution to Bank of Cyprus' thin liquidity position," Mr Anastasiades said. |
Laiki Bank is being wound up and its safe assets transferred to BoC. | Laiki Bank is being wound up and its safe assets transferred to BoC. |
For large depositors at both banks the first 100,000 euros is protected, but the government can tap up to 40% of their remaining deposits, to contribute billions towards the bailout. | |
But Mr Anastasiades complained that "no distinction was made between long-term deposits earning high returns and money flowing through current accounts, such as firms' working capital". "This amounted to a significant loss of working capital for businesses." | |
Capital restrictions imposed to prevent a run on Cypriot banks have been eased, but remain in place. The president said such "artificial" measures "will only aggravate the depositors the longer they persist". | Capital restrictions imposed to prevent a run on Cypriot banks have been eased, but remain in place. The president said such "artificial" measures "will only aggravate the depositors the longer they persist". |
"Rather than creating confidence in the banking system they are eroding it by the day," he warned. | "Rather than creating confidence in the banking system they are eroding it by the day," he warned. |
The text of his letter appeared on the Open Europe think tank's blog on Wednesday. His complaints about the bailout were also reported by the Financial Times. | The text of his letter appeared on the Open Europe think tank's blog on Wednesday. His complaints about the bailout were also reported by the Financial Times. |
Unnamed eurozone officials quoted by Reuters news agency say there are no plans to alter the terms of the bailout for Cyprus or to supply more funds. | Unnamed eurozone officials quoted by Reuters news agency say there are no plans to alter the terms of the bailout for Cyprus or to supply more funds. |
Eurozone finance ministers will discuss the letter at a meeting in Luxembourg on Thursday, Reuters reports. | Eurozone finance ministers will discuss the letter at a meeting in Luxembourg on Thursday, Reuters reports. |
Cyprus has started receiving instalments of the bailout package from international creditors. | Cyprus has started receiving instalments of the bailout package from international creditors. |