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

Turkey: No Ransom Paid for Release of Hostages Held by IS Militants

President Erdogan hails release of hostages as diplomatic success but declines to be drawn on whether their release freed Ankara's hand to take more active stance against insurgents More

Audio Sierra Leone Ends Ebola Lockdown

Health ministry says it has reached 75 percent of its target of visiting 1.5 million homes to locate infected, educate population about virus More

US Pivot to Asia Demands Delicate Balancing Act

As tumult in Middle East distracts Obama administration, efforts to shift American focus eastward appear threatened More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Natural Gas Export Plan Divides Maryland Towni
X
Deborah Block
September 21, 2014 2:12 PM
A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Alibaba Shares Soar in First Day of Trading

China's biggest online retailer hit the market Friday -- with its share price soaring on the New York Stock Exchange. The shares were priced at $68, but trading stalled at the opening, as sellers held onto their shares, waiting for buyers to bid up the price. More on the world's biggest initial public offering from VOA’s Bernard Shusman in New York.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


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