Cyprus agrees to EU conditions

After long-time consultations Cyprus authorities agreed to Brussels’s conditions in order to get an aid package to save the country’s banking system. Last week the Cyprian parliament refused from this idea and decided to ask Russia for help, because 25-30 billion euros out of 68 billion euros of deposits belong to Russians. However, Moscow refused to help Nicosia.

According to Euronews, the politicians have cancelled the one-time deposit tax that outraged the Cypriots, but only for small and medium depositors. “The Eurogroup continues to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below EUR 100,000,” head of the Eurogroup Jeroen Dijsselbloem. In his turn Cyprus’s President Nicos Anastasiades said that he is satisfied with the results of the meeting of Eurozone finance ministers. According to ITAR-TASS, Cyprus will be able to get financial aid as soon as in May (the overall amount is 10 billion euros). To get the tranche, the Cypriots had to make certain concessions. In particular, the country’s second largest Laiki Bank will be liquidated, and the Bank of Cyprus will be restructured. Meanwhile, Delfi writes, in practice the deposits of less than 100,000 euros will be transferred from the Laiki Bank structure to the Bank of Cyprus. The Eurogroup still expects Russia to lower interest rate for €2.5 billion Russian loan to Cyprus, issued in 2011. Dijsselbloem stated that the Eurogroup expects the government of Cyprus to continue negotiations with Russia on possible mitigation of repayment terms for previously approved loans.

“Cyprus continues to rob what they have already robbed” was RF Prime Minister Dmitry Medvedev’s reaction to Nicosia’s agreement to EU terms. Previously RF premier stated that the accounts of Russian state structures in the Cyprian banks had been frozen.