The Greek government, which relented to austerity measures demanded by international lenders, is praising Cyprus for rejecting a confiscation tax on bank accounts insisted upon in return for a 10 billion euros ($13 billion) bailout.
“Greece has supported and firmly supports Cyprus’s decisions,” said government spokesman Simos Kedikoglou. Asked by reporters what will happen if Cyprus defaults, Greek Finance Minister Yannis Stournaras said: “Greece is fully shielded. But Cyprus is not going to default.”
The bank-deposit levy legislation put forward by newly-elected President Nicos Anastasiades – who had opposed it when it was campaigning – was defeated by a 36-0 vote in Parliament with 19 lawmakers abstaining. It was a humiliating setback for the island’s new leader and left uncertain whether the country’s banks and economy could on hold until another mechanism is found.
“We are with one leg hanging over the cliff,” ruling Democratic Rally party Deputy Chairman Averof Neophytou said while speaking in Parliament before the vote. “The anger and bitterness which we all justifiably feel against our European peers should not be the guide for our decisions.” He added: “Don’t push Cyprus out of the euro. This is not our intention, it is not what we desire, this is not our choice.”
Samaras is set to keep negotiating with the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) over more reforms the government is being pressed to implement. The Cyprus vote was the first time a European country has not bowed to the Troika’s wishes.
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