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article imageIMF, Eurogroup, blackmailed Cyprus over bailout terms

By Katerina Nikolas     Mar 17, 2013 in World
The president of Cyprus has revealed that the terms of the bailout were imposed as a form of blackmail. The IMF and Eurogroup had already decided their terms and presented Cyprus with a fait accompli.
President Nicos Anastasiades said Nicosia had been blackmailed into accepting what was a "previously made decision, a fait accompli" Ekathimerini reported.
If Cyprus refused to accept the terms of the bailout offered, which included an unprecedented tax levy on depositors accounts, the small nation may have been forced out of the euro and gone bankrupt.
German Finance Minister Wolfgang Schäuble initially proposed a 40 percent depositor levy solidarity tax. Negotiations resulted in Cyprus agreeing to a tax of 9.9 percent on all bank deposits over €100,000, 6.7 percent tax on all deposits under €1000,000, and a rise of tax on interest on deposits to between 20 and 25 percent. Corporation tax will also rise to 12.5 percent.
According to the FT Schäuble is delighted with the Cypriot agreement.
Anastasiades, who pledged in his inauguration speech "absolutely no reference to a haircut on public debt or deposits will be tolerated" still has to convince the Cypriot parliament to vote on the bailout deal. The parliamentary debate, scheduled for Sunday, has been delayed until Monday.
More about Anastasiades, Cyprus banking, Nicos Anastasiades, Wolfgang Schuble, Imf
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