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That's the FT version. Here's another FT article, by Peter Spiegel: Cyprus depositors' fate sealed in Berlin (March 17, 2013)
But Mr Anastasiades soon learnt storming out was not an option. The European Central Bank had another shock for him: the island's second-largest bank, Laiki, was in such bad shape that it no longer qualified for the eurosystem's emergency liquidity assistance - the cheap central bank loans that teetering eurozone banks need to run their day-to-day operations.

The message, delivered by the ECB's chief negotiator, Jörg Asmussen, meant that if no deal was reached, Laiki would collapse, probably bringing the island's largest bank down with it, and saddling Nicosia with a €30bn bill to reimburse accounts covered by the country's deposit guarantee scheme. It was money Nicosia did not have. All of the island's account holders would be wiped out.

Mr Schäuble was not alone. Several officials involved in the talks said he not only had backing from the Finns, Slovaks and to a lesser extent the Dutch. The International Monetary Fund, which had been urging depositor haircuts for months, had won the argument over the skittish European Commission, which had long worried that seizing depositor assets could spark a bank run in Cyprus and, potentially, elsewhere in the eurozone.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Mar 17th, 2013 at 09:03:12 PM EST
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