Cyprus secures bailout at cost of banks, jobs
Cyprus clinched a €10-billion bailout on Monday that averted a “disorderly” euro zone exit, but at the cost of agreeing to painful reforms that will downsize its status as an offshore banking centre. The 11th-hour agreement deals a major hit to investors and depositors in the island’s biggest bank, the Bank of Cyprus, many of whom are Russian, and will also effectively shut down its second-largest lender, Laiki. Under the agreement, Laiki is to be wound up and major depositors at the Bank of Cyprus will face a “haircut” of 30%, government spokesman Christos Stylianides said. The deal spares all depositors with less than 100,000 ($130,000) in the island’s banks, a key condition missing from a previous agreement the Cypriot Parliament rejected last week. A big unknown is the reaction of Russian investors, who hold $31 billion (€24 billion) in private and corporate accounts in Cyprus. But President Vladimir Putin suggested Russia could pitch in to the Cyprus bailout by easing the terms of a €2.5-billion loan in the wake of the agreement with Brussels.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.