Cash-strapped Cyprus to ensure that a euro rescue package of $1.013 trillion from its European partners and the international monetary fund (IMF) in a bid to prevent the island into a bankruptcy, could rekindle the region's debt crisis, officials said earlier on Saturday.
In serious deviation from the established policy, package is expected to money in the bank account in Cyprus a one-off levy. Analysts warned that the depositors, is likely to blow to investor confidence in other weaker euro zone economies, and could lead to a bank run.
On his return to rescue loans, Cyprus will cut their deficits, significantly reduce its troubled banking sector, raising taxes and privatisation of state-owned assets, the President of the Dutch JiRong Dijsselbloem, meeting the 17-nation euro zone finance ministers of the euro group.
"Aid is necessary, in order to maintain financial system stability in Cyprus and the euro zone as a whole," he said, briefing reporters after almost 10 hours of negotiations.
Less than 100000 euro plug of the people's bank account one-time pay the tax of 6.75%, those who have more money will lose 9.9%. The measure early next week and is expected to net $5.8 billion of extra revenue, Dijsselbloem, thus greatly reduces the financing needs of the country.
Dijsselbloem, said: "we find it reasonable to share, but also involves the burden of depositors, pointed out that this is a" special measures ", because the banking system. Cyprus
"Since this is a contribution of Cyprus financial stability, it seems all the depositors' contribution, just want to ask" Dijsselbloem.
Analysts warned that made such a broken can be seen as a watershed, weaken the euro zone's credibility. Although the leaders stressed that Cyprus is a unique measures, they said, was forced to accept losses, in private holders of Greek government bonds.
In Europe's weaker economies, this may lead to they put their savings more stable eurozone countries, such as Germany, therefore, measure risks scaring off investors. In this case, may be greatly weakened Banks in southern Europe's economy, may need a new rescue plan. This could weaken their eurozone partners - the government may need further assistance may bring about a vicious cycle.
Council member of the European central bank, but about the erg, muston, seek to cancel the trouble from bank fees generated concerns, he said, the European central bank stands ready to provide emergency liquidity assistance to financial institutions.
"Character, this is a suitable tool. This is true of Cyprus tailored," he said. "This is a country in extreme funding needs, you have to do is to expand the tax base, not only people, also to the people," he said.
Russian citizens, it is estimated that there are at least $2 billion euros of deposits in Cyprus.
"Muston, stressed that the collection has been received in other countries, like Greece, Ireland and Portugal bailout, is implementing is without risk, because the financing needs of these countries covered by international rescue loans.
In special and emergency decision one-time collection, bank of Cyprus has taken measures, to ensure that depositors can't take money to narrow the logo, plan tax basis, muston said. Can withdraw its holdings of the rest, he added.
But Cyprus's finance minister said Harris, Mr Rees, electronic bank transfer will not likely before Tuesday, Monday is a holiday in the countryside often. In their one-time tax returns, depositors in the bank will receive the same interests, they have their account, he said.
"This is a very difficult decision," Mr Rees admits, but added, "more money may have been lost in the banking system or even is a national bankruptcy."
Serbia's lawmakers are expected to be approved at the weekend a law on bank fees, the money will be collected from the start on Tuesday.
"I want to stress is that this is a once and for all, we want to do this way, in a decisive manner to eliminate any doubts about the future," Mr Rees said. "We don't have any reason to depositors in Cyprus is, existing and new, should you have any questions."
Although rescue many times less, than Greece or Ireland's 67.5 billion euro 240 billion package, we still believe that the key to the future in the eurozone, because by default, even if it is a small volatile financial markets, damaging the confidence of investors.
Cyprus financing needs to recapitalise Banks and keep the government floated the initial estimates, by all 17 euro billion, which is almost equivalent to annual economic output of Cyprus and has sent the country's public debt by about 140%, the economy, a level, the IMF argues unsustainable.
Therefore, creditors that Cyprus used up all the way to raise more revenue, in order to reduce the external financing needs.
Officials said the bank's junior bondholders losses will be imposed. In addition, Cyprus agree to increase the capital gains tax, and improve by a quarter, from 10% to 25% corporate tax, Dijsselbloem said.
In order to further reduce the financing needs, Russia is expected to significantly prolong a euro 250 million yuan loan granted in 2011 years later, the country can no longer maturity to exploit the international market.
Ministers also agreed to Greece, the country's two largest Banks, bank of Cyprus and Laiki, qualify for a cash reserve rescue Greece's bailout agreement.
In Cyprus debt bailout agreement, by the year 2020 is expected to reach about 100% of gross domestic product.
Economy is just over 1 million people, in the eastern Mediterranean island of Cyprus, said the euro area's annual economic output is less than 0.2%.
Cyprus, for the first time to apply for aid, last summer, on the verge of bankruptcy risk, because it faced the bond redemption date in the future. However, the European central bank, Cyprus uncertainty for a long time, may hurt the market sentiment for the euro zone, promote the rapid processing, even threatened to cut the country's financial system from the emergency fund.
Had to be in several euro zone finance ministers agreed to parliament approved by the state. The eu official said, should have done at the end of everything.
 
 



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