Monday, March 18, 2013

Cyprus Update: Delay

From the WSJ: Cyprus Postpones Debate on Deposit-Tax Proposal
The Cypriot parliament is now scheduled to meet Tuesday at 1600 GMT ... The government is also in discussion with its creditors to ease the burden on small depositors. ... The new proposal will see smaller depositors, those with up to €100,000, taxed at 3%; savers with €100,000 to €500,000 taxed at 10%; and those with over €500,000 taxed at 15%, one official said.
The Russians are not happy, from the Financial Times: Russia attacks Cyprus bailout plan
Mr Putin ... was among several Russian leaders to criticise the bailout, which came without consultation with Moscow and could cost Russian depositors up to €2bn ...
“We had an agreement with our EU colleagues that we would take co-ordinated action,” Mr Siluanov pRussia’s finance minister] said. “Our role was to possibly relax the terms for [Cyprus] paying back its credit. As it turns out, the EU took action to levy a tax on deposits, without consulting Russia, and for this reason we will further consider the issue of our participation from the point of view of restructuring the earlier loan.”
excerpt with permission
From Bloomberg: Euro Officials Pressing for Cyprus Bank Levy Signal Flexibility
While demanding that the levy raise the targeted 5.8 billion euros ($7.6 billion), finance officials said easing the cost to smaller savers was up to Cyprus. ... “If the government wants to change the structure of the solidarity levy for the banking sector, the government can decide as such,” European Central Bank Executive Board member Joerg Asmussen said today in Berlin. “What’s important is that the planned revenue of 5.8 billion euros remain.”

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