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article imageCyprus Parliament votes in favour of bailout deal

By Katerina Nikolas     May 1, 2013 in World
Nicosia - The Cyprus Parliament has narrowly voted in favour of accepting the terms of the international bailout deal. Critics claim Troika imposed austerity diktats will plunge the economy into deep recession and stagnate growth.
Prior to the vote President Nicos Anastasiades appealed to MPs to vote in favour of the measures, saying "What we are being asked to do today is adopt a loan agreement which will allow our country to breathe and give us the chance to overcome whichever problems may arise in this crisis." (Ekathimerini)
The demands which Cyprus' Troika of international creditors, the EU, ECB and IMF, have called for in return for a bailout package, bear a remarkable similarity to the conditions demanded of Greece. In addition to a restructuring of the banking sector, which has included seizing bank deposits over €100,000, Cyprus must introduce drastic spending cuts and privatise state owned assets. New taxes will also be introduced including, Greek style, a property tax.
Ekathimerini reported the Bank of Cyprus began the first stage of the depositors bail-in on Sunday. The bail-in converts a percentage (37.5) of bank deposits over €100,000 to bank shares, holds 22.5 percent of deposits in a buffer zone for possible conversion into bank shares, whilst freezing 30 percent of deposits. Several EU politicians and bankers have indicated the Cyprus bail-in will be used as a template in future international bailouts.
Twenty seven Cypriot MPs voted against the bailout memorandum, against 29 who voted in favour. The previous ruling AKEL party warned against the terms, issuing a statement saying: "Cyprus's only option is a solution outside the loan agreement and the Memorandum of Understanding" indicating a preference for a Euro zone exit.
More about Cyprus Parliament, Cyprus crisis, Nicos Anastasiades, Cyprus bank deposits, Cyprus property tax
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