Cyprus Bailout | Deal Agreed But Details Sketchy

Cyprus Bailout | Deal Agreed But Details Sketchy

Despite several problems which seemed to be preventing a deal during the early hours, causing the south’s president Nicos Anastasiades to threaten to resign at one point, a deal on the bailout loans appear to have been agreed in Europe. Part of this deal includes the closing down of Laiki Bank and the restructuring of the Bank of Cyprus.

Depositors with less than €100,000 loan appear to have escaped any levy, although access to these funds seems to be uncertain, but above this amount there is still talk that a levy of up to 40% could be applied to those with fund specifically in Laiki Bank. However, those with over €100,000 in Cyprus Bank seem to be in a more favourable position, they will see money above that threshold ‘frozen until it is clear how much of it will be needed to recapitalise the bank so that it can reach a capital ratio of 9 percent.’

Rumours are circulating that the bailout money will not be available until May and there is also uncertainty whether this deal will automatically be accepted by the south’s MPs or whether there will have to be a vote on whether it is accepted. Whatever the outcome, positive movements in financial markets around the world suggest that they feel that a good result has been achieved in Brussels.

Update 8:30GMT: It seems that the south’s parliament will not have to vote on these measures and now it is being revealed that the fate of deposits above €100,000 in Laiki Bank is not totally clear. Banks will not open in the short term but the European Central Bank is making sure that there will be limited liquidity in the banks when they do open despite bailout money not being available until May.

Update 10:30GMT: The European Parliament expected to approve the Cyprus Deal in the third week of April

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