EU Lawmakers Blast Eurozone Over Cyprus

The European Parliament has heavily criticized Eurozone officials for crafting a plan to confiscate bank deposits of Cypriots to make them pay for an economic crisis they didn’t create and said bank accounts – which are guaranteed against loss under 100,000 euros ($130,000) should be exempted and protected.
After the Cypriot Parliament rejected the plan, 36-0, EU officials said the bank account aren’t guaranteed against loss from double taxation or confiscation by governments, which many analysts said could destroy trust in the banking system and create a run on the banks.
The plan was hatched out of 10-hour meeting that ended late on a Friday night, March 15, ahead of a three-day holiday weekend in Cyprus and caught everyone by surprise, setting off near-panic. “We regret the lack of transparency and democratic accountability in the original solution proposed by the Commission, IMF and the ECB for Cyprus,” said European Parliament President Martin Schulz on behalf of the majority of political group leaders in the European Parliament Conference of Presidents – EPP Joseph Daul, S&D Hannes Swoboda, ALDE Guy Verhofstadt, Greens/EFA Rebecca Harms and Daniel Cohn-Bendit, ECR Martin Callanan.
“Eurozone finance ministers also must take responsibility for this original solution for the Cyprus banking sector. The proposed solution was taken behind closed doors in the early hours of the morning without proper reflection on the consequences for ordinary people. Yet the ‘blame-game’ on whose proposal this was only serves to undermine confidence in the EU.”
“A fairer and sustainable solution for the Cypriot people must be found,” they said in their statement. “We need a European solution to the Cyprus problem, not an external one. Ordinary people’s savings should not be used to bail out the banking sector.
“The Eurozone banking system is undergoing a radical overhaul with the establishment of a banking union and a single supervisory mechanism. The situation in Cyprus underlines the need for these to be put in place as soon as possible. Direct EU supervision over Eurozone banks will be key in ensuring that similar crises as the one in Cyprus would be avoided,” they added. Despite their statement and concern, the lawmakers have virtually no power beyond complaining.