Cyprus: Deposit "haircut" back on the table
The government was yesterday trying to find alternative solutions after parliament on Tuesday rejected the terms of a bailout from the European Union and turned instead to Russia for a lifeline. - "We don't have days or weeks, we have only hours to save our country," Averof Neophytou, ruling DISY deputy chairman, told reporters as crisis talks in Nicosia dragged into the evening. It was suggested yesterday that the government may submit a bill today proposing a haircut on deposits but at lower rates than legislation that was rejected by parliament on Tuesday. The shortfall from the lower rates could be covered by nationalising the provident funds of semi-state companies. Bank of Cyprus vice president Evdokimos Xenophontos said the situation could be reversed but warned against touching foreign deposits. “We cannot do it to foreign depositors who trusted us. This could be theft,” he told reporters after meeting President Nicos Anastasiades last night.
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