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ECB presses Cyprus to impose bank levy

The European Central Bank is pressing Cyprus to legislate a universal levy on bank deposits before international financial markets open on Monday, after the Cypriot government unexpectedly postponed Sunday's planned vote in parliament amid strong opposition from lawmakers.

President Nicos Anastasiades rejected the demand at a meeting with two ECB officials who flew to the island on Sunday, a government adviser said. The same officials were due to brief Cypriot political party leaders later in the day. The vote was rescheduled for Monday, a bank holiday in Cyprus.

Mr Anastasiades was expected to make a televised address on Sunday evening, in which he would appeal to Cypriots to accept losses on their savings as part of a €10bn bailout by international lenders.

(...)

Cypriots continued to withdraw cash from bank cash machines on Sunday, with banks making a trickle of funding available through the holiday weekend. But a rush to withdraw deposits is expected when banks reopen. It was not clear whether another public holiday would be declared on Tuesday.

"Whether or not the levy is approved by parliament, businesses and individuals will be hoarding cash," said a Cypriot importer who asked not to be named.

Mr Anastasiades faces an uphill task to persuade reluctant lawmakers, after pledging he would "never" accept a haircut of deposits as a condition for a bailout by international lenders.

His governing coalition controls 28 seats in the 56-member parliament, but several members of the Democratic party (Diko), the junior partner, have threatened to vote against the bill.



Wind power
by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 12:20:23 PM EST

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