News / Europe

Cyprus Bailout Cost Jumps

A man walks past a branch of Bank of Cyprus in Nicosia, March 31, 2013.A man walks past a branch of Bank of Cyprus in Nicosia, March 31, 2013.
x
A man walks past a branch of Bank of Cyprus in Nicosia, March 31, 2013.
A man walks past a branch of Bank of Cyprus in Nicosia, March 31, 2013.
VOA News
The cost of the bailout for Cyprus has jumped sharply, less than a month after international financial experts thought they had figured out the extent of the Mediterranean island's financial woes.

Cyprus initially thought it would have to contribute about $9 billion to secure a $13 billion rescue package from its international lenders. But a deeper analysis disclosed Thursday shows that the economic fortunes of the offshore tax haven are worse than first thought.

That will force Nicosia to boost its share by nearly another $8 billion, to $17 billion.

Cyprus Bailout

  • Agreed to on March 25
  • Worth $13 billion
  • Keeps Cyprus in the eurozone
  • Closes the island nation's second largest bank - Laiki Bank
  • Laiki accounts larger than $130,000 will be moved to a "bad bank" and used to raise bailout money
  • Laiki accounts with less than $130,000 euros will be moved to Bank of Cyprus
  • Bank of Cyprus will be restructured
The bailout deal Cyprus patched together with international lenders last month called for it to shut down the island's second largest bank, Laiki, and confiscate 60 percent of the deposits of the biggest account holders, many of them wealthy Russians.

Now, to raise the additional money, the island will be forced to sell about three-fourths of its gold reserves for about $524 million, levy additional taxes, sell state assets and renegotiate terms of a loan with Russia.

One financial analyst, Capital Economics, said the increase in the size of Cyprus' share of the rescue "underlines the depth of the problems facing the country," but also might have implications for the shape of future European bailouts.

Cyprus is the fifth of the 17 nations in the erurozone to need a bailout. But it is the first time that other European countries, the European Central Bank and the International Monetary Fund forced large bank depositors to pay part of the cost, not just taxpayers in the currency union.

European officials say the Cyprus plan was unique and will not be repeated. But the wealthier, northern countries in the eurozone have become weary about the string of bailouts they have had to finance for the bloc's debt-ridden countries.

Some information for this report was provided by AP, AFP and Reuters.

You May Like

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid