This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/world/2013/mar/21/cyprus-crisis-race-agree-plan-b
The article has changed 9 times. There is an RSS feed of changes available.
| Version 3 | Version 4 |
|---|---|
| Cyprus crisis: politicians race to agree details of 'plan B' | Cyprus crisis: politicians race to agree details of 'plan B' |
| (6 days later) | |
| Cypriot politicians were racing to agree details of a "plan B" to rescue their economy on Thursday night, after the European Central Bank threatened to withdraw support for the country's banking sector if a bailout was not agreed by Monday. | Cypriot politicians were racing to agree details of a "plan B" to rescue their economy on Thursday night, after the European Central Bank threatened to withdraw support for the country's banking sector if a bailout was not agreed by Monday. |
| The country's second-largest bank, Laiki, is to be restructured as part of the plan. It will avert bankrupcy and protect savers with up to €100,000, according to the country's central bank governor, Panicos Demetriades. | The country's second-largest bank, Laiki, is to be restructured as part of the plan. It will avert bankrupcy and protect savers with up to €100,000, according to the country's central bank governor, Panicos Demetriades. |
| The move came hours after the ECB ratcheted up the pressure on Nicosia as party leaders met to agree a package that would satisfy its eurozone partners and the International Monetary Fund. Tensions were rising on the streets, with crowds of bank workers demonstrating near the parliament building in Nicosia following reports that its second largest lender, Laiki, would be shut down and split into a good and bad bank. | The move came hours after the ECB ratcheted up the pressure on Nicosia as party leaders met to agree a package that would satisfy its eurozone partners and the International Monetary Fund. Tensions were rising on the streets, with crowds of bank workers demonstrating near the parliament building in Nicosia following reports that its second largest lender, Laiki, would be shut down and split into a good and bad bank. |
| On Thursday afternoon the president, Nicos Anastasiades, said parliament would receive a bill by the end of the night, outlining the creation of a state investment fund to meet the ECB's ultimatum to raise billions of euros or face the loss of the bailout money and the collapse of its banking sector. | On Thursday afternoon the president, Nicos Anastasiades, said parliament would receive a bill by the end of the night, outlining the creation of a state investment fund to meet the ECB's ultimatum to raise billions of euros or face the loss of the bailout money and the collapse of its banking sector. |
| Another bill will pave the way for the imposition of capital controls - restrictions on taking money out of the country's banks - according to reports from Nicosia. | Another bill will pave the way for the imposition of capital controls - restrictions on taking money out of the country's banks - according to reports from Nicosia. |
| The ECB confirmed it would not provide emergency liquidity assistance to the island's banking sector beyond 25 March, unless a bailout had been agreed. Without its support, Cyprus's two largest banks, Bank of Cyprus and Laiki, could collapse. | The ECB confirmed it would not provide emergency liquidity assistance to the island's banking sector beyond 25 March, unless a bailout had been agreed. Without its support, Cyprus's two largest banks, Bank of Cyprus and Laiki, could collapse. |
| There were lengthy queues at many Laiki cash machines on Thursday as banks and the domestic stock market remained closed. | There were lengthy queues at many Laiki cash machines on Thursday as banks and the domestic stock market remained closed. |
| The eurogroup of finance ministers were scheduled to hold a conference call from 6pm GMT on Thursday to discuss the situation in Cyprus. | The eurogroup of finance ministers were scheduled to hold a conference call from 6pm GMT on Thursday to discuss the situation in Cyprus. |
| Cypriot political leaders were involved in emergency talks on Thursday morning to find a way to raise the €6bn (£5.1bn) demanded by the IMF and EU in return for a €10bn bailout. | Cypriot political leaders were involved in emergency talks on Thursday morning to find a way to raise the €6bn (£5.1bn) demanded by the IMF and EU in return for a €10bn bailout. |
| Averof Neophytou, the deputy leader of the ruling Disy party, confirmed the leaders had agreed to create the solidarity fund. Details of the scheme were not released, but it was believed the fund could use Cyprus's energy resources as collateral, or include state assets, pension funds or the property of the Church of Cyprus. A vote on the package could come as early as Thursday night. | Averof Neophytou, the deputy leader of the ruling Disy party, confirmed the leaders had agreed to create the solidarity fund. Details of the scheme were not released, but it was believed the fund could use Cyprus's energy resources as collateral, or include state assets, pension funds or the property of the Church of Cyprus. A vote on the package could come as early as Thursday night. |
| Parliamentary speaker Yiannakis Omirou, who leads the small Edek socialist party, said the issue of taxing bank deposits had not been discussed during the meeting, suggesting a savings levy could be off the agenda. | Parliamentary speaker Yiannakis Omirou, who leads the small Edek socialist party, said the issue of taxing bank deposits had not been discussed during the meeting, suggesting a savings levy could be off the agenda. |
| Two days ago, the parliament rejected the plan for a 6.75% tax on savers with more than €20,000 in the bank, rising to 9.9% for those with more than €100,000. | Two days ago, the parliament rejected the plan for a 6.75% tax on savers with more than €20,000 in the bank, rising to 9.9% for those with more than €100,000. |
| The ECB said a continuation of its emergency liquidity assistance "could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks". | The ECB said a continuation of its emergency liquidity assistance "could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks". |
| Speaking after the ECB issued its ultimatum, Cyprus's central bank governor said he was confident the country would reach a deal in time. "We will have a programme of support for Cyprus by Monday," said Demetriades. | Speaking after the ECB issued its ultimatum, Cyprus's central bank governor said he was confident the country would reach a deal in time. "We will have a programme of support for Cyprus by Monday," said Demetriades. |
| The Cypriot finance minister, Michael Sarris, has been in Moscow since Tuesday in an attempt to secure a rescue package, but hopes for a Kremlin-brokered deal appeared to be fading, as negotiations between Sarris and his Russian counterpart looked set to enter a third day with no results. | The Cypriot finance minister, Michael Sarris, has been in Moscow since Tuesday in an attempt to secure a rescue package, but hopes for a Kremlin-brokered deal appeared to be fading, as negotiations between Sarris and his Russian counterpart looked set to enter a third day with no results. |
| For the first time, Nicosia showed a public willingness to offer access to financial assets and gas deposits in the eastern Mediterranean as part of any agreement. "Understandably, if there is to be help, it has to be connected with a number of economic activities," said Sarris ahead of discussions with Russian finance minister Anton Siluanov. | For the first time, Nicosia showed a public willingness to offer access to financial assets and gas deposits in the eastern Mediterranean as part of any agreement. "Understandably, if there is to be help, it has to be connected with a number of economic activities," said Sarris ahead of discussions with Russian finance minister Anton Siluanov. |
| Russian officials have sought to downplay talk of large amounts of corrupt cash flowing through Cyprus, but the Mediterranean island is thought to play a key role in Russian money laundering operations. | Russian officials have sought to downplay talk of large amounts of corrupt cash flowing through Cyprus, but the Mediterranean island is thought to play a key role in Russian money laundering operations. |
| The Russian prime minister, Dmitry Medevdev, has intensified his criticism of the idea of a compulsory levy on deposits in Cyprus, where Russian citizens are estimated to hold up to $19bn, and said the plan "looked like theft". | The Russian prime minister, Dmitry Medevdev, has intensified his criticism of the idea of a compulsory levy on deposits in Cyprus, where Russian citizens are estimated to hold up to $19bn, and said the plan "looked like theft". |
| Medvedev interrupted a conference in Moscow to read the news from his iPad that the Cypriot parliament had decided to drop the compulsory tax proposal — and the announcement was met with applause and shouts of "hurrah!" from delegates. | Medvedev interrupted a conference in Moscow to read the news from his iPad that the Cypriot parliament had decided to drop the compulsory tax proposal — and the announcement was met with applause and shouts of "hurrah!" from delegates. |
| Despite alarm over possible expropriation, the Cypriot appeal to Moscow has given Russia an unprecedented opportunity to exert influence in an internal European Union matter. "It's an opportunity for the Russians to make a major play," said one western banker in Moscow. | Despite alarm over possible expropriation, the Cypriot appeal to Moscow has given Russia an unprecedented opportunity to exert influence in an internal European Union matter. "It's an opportunity for the Russians to make a major play," said one western banker in Moscow. |
| But the parameters of any deal remain unclear. State-owned gas giant Gazprom is unlikely to be interested in operating Cypriot gas fields in the context of an over-supplied European market, according to Ildar Davletshin, an oil and gas analyst at Renaissance Capital in Moscow. | But the parameters of any deal remain unclear. State-owned gas giant Gazprom is unlikely to be interested in operating Cypriot gas fields in the context of an over-supplied European market, according to Ildar Davletshin, an oil and gas analyst at Renaissance Capital in Moscow. |
| Russia's three biggest state-owned banks — Sberbank, VTB and Gazprombank — have all denied they are interested in buying financial assets in Cyprus. | Russia's three biggest state-owned banks — Sberbank, VTB and Gazprombank — have all denied they are interested in buying financial assets in Cyprus. |
| Cyprus has recently discovered significant offshore gas deposits, and major energy companies have shown an interest in tapping those resources. | Cyprus has recently discovered significant offshore gas deposits, and major energy companies have shown an interest in tapping those resources. |
| With the Monday deadline imposed by the ECB, time is running out for Cyprus to conclude an agreement with the Kremlin, according to Dmitry Polevoy, ING Bank's chief economist in Russia. "All these deals [involving energy or banking assets] require intensive due diligence processes … and usually require much more time than Cyprus has," he said. | With the Monday deadline imposed by the ECB, time is running out for Cyprus to conclude an agreement with the Kremlin, according to Dmitry Polevoy, ING Bank's chief economist in Russia. "All these deals [involving energy or banking assets] require intensive due diligence processes … and usually require much more time than Cyprus has," he said. |
| "But Russia is a country of surprises and nobody knows what is really at stake and whose money is at risk," he added. | "But Russia is a country of surprises and nobody knows what is really at stake and whose money is at risk," he added. |
| Medvedev also sought to find more unorthodox benefits for Russia in Cyprus's crisis. The Kremlin should develop islands, including the Kurils and Sakhalin, off the country's far east Pacific coast as alternative offshore banking destinations, Medvedev said. | Medvedev also sought to find more unorthodox benefits for Russia in Cyprus's crisis. The Kremlin should develop islands, including the Kurils and Sakhalin, off the country's far east Pacific coast as alternative offshore banking destinations, Medvedev said. |
| Russian sovereignty of the Kuril Islands is disputed by Japan, while Sakhalin is the site of a former Tsarist penal colony. | Russian sovereignty of the Kuril Islands is disputed by Japan, while Sakhalin is the site of a former Tsarist penal colony. |
| The implementation of such a plan would have "ruinous consequences for Russia's financial system," former finance minister Aleksei Kudrin wrote on Twitter. | The implementation of such a plan would have "ruinous consequences for Russia's financial system," former finance minister Aleksei Kudrin wrote on Twitter. |
| guardian.co.uk today is our daily snapshot of the top news stories, sent to your inbox at 8am |