World News

Cyprus Looks for a New Debt Plan

Officials in Cyprus met throughout the day Wednesday to try to craft a new funding plan to avoid a debt default for the Mediterranean island nation.

Cypriot leaders were faced with no obvious way to raise $7.5 billion the country's international lenders are demanding before they will approve $13 billion in rescue funds. On Tuesday, the country's parliament overwhelmingly rejected a tax on bank deposits that angered savers.

The Nicosia government said the country's banks, closed all week, would remain shut until next Tuesday, to prevent a run on accounts.

Europe is pressuring Cyprus to offer new solutions to the island nation's debt crisis after parliament rejected the deposit tax plan.



The European Commission, the administrative arm of the European Union, said it was up to Cyprus to offer "an alternative scenario."

German Chancellor Angela Merkel said she respected the Cyprus vote. But she said the Mediterranean nation's banking system -- long viewed as a tax haven for wealthy offshore investors, especially Russians -- is not financially stable for the long term. She said the banks should help fund the bailout.



"So we are of the opinion that the banking sector needs to make a contribution toward managing Cypriot debt and so we will continue negotiations, primarily via the (the group of international lenders). We will look at any proposals Cyprus makes with respect. Germany wants a solution. Cyprus is a partner in the eurozone and therefore we are obliged to find a solution together.''



Cyprus pleaded for a new loan from Russia, but there was no immediate agreement.

Archbishop Chrysostomos said the Orthodox church is willing to mortgage its assets in Cyprus and invest in government bonds. He made the comment after a meeting with President Nicos Anastasiades.

The parliamentary vote left the fate of the bailout in question and raised the possibility that the Cypriot government could default on its financial obligations or even end its membership in the 17-nation euro currency union.

If it eventually secures a bailout, Cyprus is planning on using much of the money to refund its beleaguered banks that have been weighed down with losses on Greek government bonds that were reduced in value to help resolve the Athens debt crisis.

The original Cyprus debt terms were set by the International Monetary Fund, the European Central Bank and the country's eurozone neighbors. It called for the tiny country to impose what the lenders said was a one-time tax on bank deposits, nearly 10 percent on the largest accounts above $130,000.

The proposal drew the immediate ire of Cypriot depositors, as well as Russian President Vladimir Putin. Wealthy Russians have vast sums parked in Cypriot accounts.

The Cypriot economy accounts for only a very small fraction of the eurozone's economic fortunes, but none of the previous bailouts for Greece, Portugal, Ireland and the Spanish banking system taxed savings. Some analysts said they feared that taxing deposits in Cyprus could set a precedent that might be followed in other debt-ridden countries in the currency bloc and ignite a run on banks to withdraw money.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs