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Eurozone finance ministers to hold Cyprus conference call

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(Globalpost/GlobalPost)

Eurozone finance ministers will hold a conference call at 1830 GMT on Monday to assess proposed changes to a hugely controversial 5.8-billion-euro levy on Cypriot bank accounts as part of a deal to bail out the debt-laden country, an EU official told AFP.

"The Eurogroup will hold a teleconference at 7:30 pm," the official said, amid outrage in Cyprus, slumping financial markets, and very harsh words from Russian President Vladimir Putin whose compatriots are believed to have poured billions into the country.

The Cypriot parliament will debate the bailout deal on Tuesday, after first a Sunday and then a Monday hearing was postponed due to bitter recriminations over the unprecedented decision to impose a near six-billion-euro bank levy on bank accounts, hitting confidence among savers and in politicians' handling of the debt crisis.

In exchange for "up to" 10 billion euros in eurozone loans and International Monetary Fund aid, Cyprus had to come up with 5.8 billion euros through a bank levy, eurozone finance ministers agreed early Saturday.

Germany and several other states maintained that it was the decision of the Cypriot government to tax accounts up to 100,000 euros to the tune of 6.75 percent, and those above at 9.9 percent.

The decision triggered anger among Cyprus lawmakers who said it completely undermined an EU deposit protection system introduced at the height of the debt crisis to reassure savers that their money was safe in the banks.

The conference call is to "take stock" of the situation, the EU official said, with Cyprus working feverishly on new figures that would change the percentages, and so soften the blow for smaller savers, but still raise the same overall amount.

Economists have warned that the bailout accord as it stands could plunge the country into a long recession with billions withdrawn from Cyprus's banks by Russians who are estimated to have around 30 billion euros on deposit there.

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http://www.globalpost.com/dispatch/news/afp/130318/eurozone-finance-ministers-hold-cyprus-conference-call