Shiarly dismisses idea of forcing losses on Cyprus bank depositors
Cypriot Finance Minister Vassos Shiarly yesterday ruled out the idea of forcing the country’s domestic and foreign depositors to take losses as part of the Cyprus bailout, which had been suggested in a press report. He was in Brussels for a meeting of eurozone finance ministers in which Cyprus was at the top of the agenda.
“We do not accept, nor are we discussing, nor can we ever accept this,” Shiarly told Kathimerini’s Brussels correspondent Nikos Chrysoloras ahead of the Eurogroup meeting in the Belgian capital. “We categorically state that such a move would be illegal under Cypriot law and, I believe, under European law. I believe deposits in Cyprus are safe and presenting things in any other way is very risky.”
“Cyprus is strongly committed to protecting investors and depositors in our country,” the Central Bank of Cyprus added in a statement yesterday.
The statements were made in the wake of a Financial Times report that a proposal had been made to “bail in” investors and depositors at Cypriot banks, a move that would reduce the amount of financial assistance required by the country. Shiarly said he had not read the article in question but added that it was based on an “incredible scenario.”
chief Mario Draghi (right) speaks with Cypriot Finance Minister Vassos Shiarly (left) and Dutch Finance Minister Jeroen Dijsselbloem (center) before the Eurogroup meeting in Brussels yesterday.
A European Commission spokesman denied Brussels had proposed forcing losses on uninsured depositors at Cypriot banks: “There are no proposals of the European Commission along the lines described in the article,” said the spokesman for European Commissioner for Economic and Monetary Affairs Olli Rehn. He added that the Commission intended to ensure fair burden sharing and restructuring of Cypriot banks.
However, other finance ministers refused to rule out the proposal, saying that no measure should be taken off the table as policymakers await the outcome of Cyprus’s pres- idential election on Sunday. “That is one of the options that I don’t find very good because one should try first not to create new rules with every bailout plan, but we should discuss everything,” Luxembourg Finance Minister Luc Frieden said.
Eurozone finance ministers made no decisions regarding a Cypriot bailout package yesterday, as the first round of the presidential election is looming. “We should use the time we have in view of the elections this month to work out the best possible solution,” said the new Eurogroup head, Dutch Finance Minister Jeroen Dijsselbloem.