Saturday, 16 March 2013

Cypriot Savers Hit as Eurozone Agrees €10 Billion Bail-out

THE DAILY TELEGRAPH: Cyprus is to receive a €10 billion (£8.7 billion) bail-out from the eurozone to recapitalise its ailing banking system in return for a series of drastic measures which will hit the country’s savers.

The Mediterranean island nation becomes the fifth country to turn to the eurozone, following in the footsteps of Ireland, Greece, Portugal and Spain.

The emergency funding will be used to prop up the country’s banks which were hit by the financial restructuring of nearby Greece.

The Cypriot banking system had grown to be eight times the size of the country’s fledgling economy - which accounts for just 0.2pc of the eurozone’s gross domestic product.

But in a departure from previous bail-outs, the country’s savers are being asked to make sacrifices.

The terms of the deal mean that Cyprus’s savers will sacrifice up to 10pc of their deposits in a move which will raise as much as €6 billion.

The move, which is likely to prove unpopular with the country’s 1m citizens - and the Russian non-residents who reportedly account for half of deposits in Cyprus’s banks - will be enacted almost immediately.

Following a bank holiday in the country on Monday, March 18, the levy on bank deposits will come into force on Tuesday, March 19. » | James Quinn and Ben Leach Saturday, March 16, 2013

SPIEGEL ONLINE INTERNATIONAL: Hitting the Savers: Euro Zone Reaches Deal on Cyprus Bailout – After fraught negotiations, euro-zone finance ministers reached a deal early Saturday to provide up to €10 billion ($13 billion) bailout funds to Cyprus, which faces bankruptcy in May. For the first time, deposits at banks in a country are being seized to assist in the rescue. » | dsl -- with wires | Saturday, March 16, 2013

THE GUARDIAN: Cyprus eurozone bailout prompts anger as savers hand over possible 10% levy: Angry Cypriots try in vain to withdraw savings as eurozone bailout terms break taboo of hitting bank depositors » | Reuters | Saturday, March 16, 2013