Lawmakers in Cyprus turned down a â?¬10 billion package from the European Union yesterday, calling it not a bailout but blackmail. It would have taxed ordinary bank deposits and left bondholders alone, a widely-criticized move that all but ensured its defeat.
The European Central Bank had threatened to “halt liquidity” if Cyprus didn’t push through the bailout package, but after the Cypriot Parliament turned them down the bank backpedalled, saying it would keep sending money their way. But this crisis, another in a long list for the E.U., isn’t over yet. Cyprus president Nicos Anastasiades will need to rework a plan that he can pass in parliament to lift the country out of its dire financial hole.
Joseph Cotterill has been reporting on this for the Financial Times. Lee Buchheit has been an advisor to many countries with soverign debt problems. He is a partner at Cleary Gottlieb Steen & Hamilton.
The World is an independent newsroom. We’re not funded by billionaires; instead, we rely on readers and listeners like you. As a listener, you’re a crucial part of our team and our global community. Your support is vital to running our nonprofit newsroom, and we can’t do this work without you. Will you support The World with a gift today? Donations made between now and Dec. 31 will be matched 1:1. Thanks for investing in our work!