Calamos Supports Greece
GreekReporter.comGreek NewsCyprusGerman Parliament Backs Cyprus Bailout

German Parliament Backs Cyprus Bailout

Wolfgang Schaeuble
Wolfgang Schaeuble

Germany’s lower House of Parliament voted overwhelmingly on April 18 to grant Cyprus a 10 billion euros ($13 billion) bailout to keep the island country’s economy and banking system from collapsing because of bad loans and over exposure to Greek bonds that were devalued 74 percent.
Of the 602 lawmakers in the Bundestag chamber, 487 backed the rescue, under which Cyprus has agreed to impose major losses on depositors, shutter its second largest bank and raise its corporate tax rate.
The Cyprus vote was not in doubt given widespread support from within German Chancellor Angela Merkel’s cenetr-right coalition and backing by many opposition lawmakers from the Social Democrats and Greens.
Cyprus’ Attorney General ruled, however, that the deal must also now be approved by the country’s Parlliament which was excluded when the government of new President Nicos Anastasiades negotiated directly with Eurozone officials who are part the Troika that includes the International Monetary Fund and European Central Bank putting up the bailout.
Before the vote, German Finance Minister Wolfgang Schaeuble warned lawmakers that a failure to offer Cyprus aid would unleash contagion across the 17-nation single currency bloc. “Step by step we are winning back confidence. If you look at the markets, there is still nervousness and uncertainty. But it is considerably less than three years, two years or one year ago,” Schaeuble said in a speech.
“The aid for Cyprus secures the successes we’ve already achieved in the euro zone. We must prevent the problems in Cyprus from unleashing new problems in other Eurozone countries,” he said.
He said that if Cyprus were allowed to go bankrupt, there was a “significant risk” of fiscal risk in Greece and other vulnerable Eurozone member states with weak economies.
Responding to Schaeuble, the leader of the cenetr-left Social Democrats in parliament Frank-Walter Steinmeier said his party would support the bailout, but attacked the government for initially backing a plan to hit small savers in Cypriot banks who had deposits guaranteed against loss by the goverment. That proposal was scrapped after a major backlash defeated by the Cypriot Parliament and the new bailout only hits people with deposits over 100,000 euros, or $130,000.
 

See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!



Related Posts