Politicians: Bank Levy Is A 'Lose-Lose' Situation For Cyprus

Category: Markets / Finance / Mar 19, 2013 12:14PM EDT
Cyprus's top politicians say any bank deposit levy percentage would be a bad solution for the country. "Let me be very clear, that we have opposed politically and technically to the proposal on the table. The president and the minister of finance were absolutely, absolutely clear that this approach would have very detrimental effects on the economy,"said Andreas Charalambous, the director of finance at the Ministry of Finance. "At the one side we would more than like to implement the recommendation coming from the euro zone which said do not burden at all those below 100,000. We would be the first ones to be extremely happy with such an approach. Of course politically, economically, it makes sense but on the other side, because of the magnitude of the financing needs as assessed by the institutions, in such a scenario we need and I will not go into the number but believe me it will be a very high burden on those over 100,000, and this would have a detrimental, an even stronger detrimental impact on economic growth," said Charalambous. The Director of Finance added "We want to be in a position as soon as possible, as soon as possible, to create conditions that would allow us to open banks. We would be happy if after this today the conditions are there, we will do what is in our power to enable us to go back to normality as soon as possible." Prodromos Prodromou, a member of parliament for the Democratic Rally Party, spoke with Reuters about the controversial situation in Cyprus. "We hope that there is going to be another solution for Cyprus - not this, because we are not persuaded that this is the solution. I have to say I belong to the party, the Democratic Rally, the party from which comes the president of the republic, If we vote -- we, only we -- the Democratic Rally - its only in order to stand near the president, for no other reason. But I am note sure there will be today a deliberation of the parliament," said Prodromou. Nikolas Papadopoulos, a member of the Democratic Party in Parliament, also spoke with Reuters. "I think we are the exact opposite of happy. This is a lose-lose situation for us, there is absolutely no guarantee that if we do pass this bill we wont have a bank run tomorrow morning because I believe that the credibility of our banking system has been totally been destroyed and I really foresee a great many difficulties in achieving stability in this very difficult period. So I think that we are going to have to wait and see what happens," Papadopoulos. (Video Source: REUTERS)