News / Europe

Cyprus Bailout Moves Forward; EU Eyes Bank Stabilization

Cyprus' Finance Minister Harris Georgiades (C) and Central Bank of Cyprus Governor Panicos Demetriades (R) sit with Holland's Finance Minister Jeroen Dijsselbloem in a portrait session at Dublin Castle during an informal meeting, Apr. 12, 2013.
Cyprus' Finance Minister Harris Georgiades (C) and Central Bank of Cyprus Governor Panicos Demetriades (R) sit with Holland's Finance Minister Jeroen Dijsselbloem in a portrait session at Dublin Castle during an informal meeting, Apr. 12, 2013.
VOA News
European Union finance ministers are pushing ahead with plans to bail out Cyprus and stabilize Europe's banking sector.

Ministers meeting in Dublin, Ireland Friday faced questions following reports that the cost of the Cyprus bailout had jumped by several billion dollars.  But EU Monetary Affairs Commissioner Olli Rehn said such worries were not justified.

"People have been comparing apples and pears and coming up with oranges. I will refrain from remarking that this is what happens when stories are written based on leaked documents,'' Rehn said.

The $13 billion bailout plan calls for Cyprus to contribute about $9 billion.  But the costs may still grow.  Rehn confirmed Friday the economic fortunes of the offshore tax haven are worse than first thought.

"We are revising the growth forecast and of course there is plenty of uncertainty about the exact trajectory of economic growth in Cyprus,'' he explained.

Before the meeting, Cypriot Finance Minister Harris Georgiades was resolute. "We have a deal and we shall make it work,'' Georgiades asserted.

The bailout deal Cyprus patched together with international lenders must still be approved by the parliaments of several EU countries before aid can start flowing, as early as next month.

Also Friday, the ministers agreed on the creation of a single supervisory mechanism to watch over European banks.  

Rehn said the move will "further enforce financial stability."

To help ease the financial crunch, Cypriot officials say they are looking at other types of aid, some from the EU.  But to raise additional money, the island could be forced to sell about three-fourths of its gold reserves for about $524 million, levy additional taxes and sell state assets.  

The terms of the bailout have already required Cyprus to confiscate 60 percent of the deposits of its biggest account holders, many of them wealthy Russians.

Such terms continue to upset many Cypriots, like shop owner Ritsa Constantinou, despite her growing optimism that the country's fortunes are improving.

"They shouldn't be so strict. They're choking us," she said. "On the one hand they give us a loan, but they say you have to repay it tomorrow. This isn't possible. If I weigh 100 kilos and the doctor tells me you have to lose weight tomorrow, will I be able to lose it in one day?''    

Such anger may continue to simmer.  Eurogroup finance ministers agreed In Dublin to give Ireland and Portugal  another seven years to repay emergency bailout loans.

Eurogroup President and Dutch Finance Minister Jeroen Dijsselbloem says "Ireland is a living example that adjustment programs do work, provided there is a strong ownership and genuine commitment to reforms."

But Nicosia shop owner Luis Komitis sees nothing wrong with continuing to help Cyprus be accountable.

"I don't believe our partners in Europe want what's bad for us.  I am one of those who believe that Germany, as well as Holland, who we wrongly accuse every day, want what's best for us," Komitis said. "They want to sort out the mistakes that happened in the past, repeatedly, and for many years and by all governments. Germany, and the other countries we accuse wrongly every day, are the ones who want to help us."

Cyprus is the fifth of the 17 nations in the eurozone 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.

You May Like

Video Obama to Send 3,000 Troops to Liberia in Ebola Fight

At Centers for Disease Control and Prevention, President says US will take leadership role for a global response to deadly Ebola virus that is ravaging West Africa More

Video China Muslims Work to Change Perceptions After Knife Attacks

Muslims in Kunming say that they condemn the violence, it is not a reflection of the true beliefs of their faith More

Humanitarian Aid, Equipment Blocked in Cameroon

Move is seen as a developing supply crisis in West Africa More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA Picks Boeing, SpaceX to Carry Astronauts Into Spacei
X
September 17, 2014 4:20 AM
The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid