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Cyprus bailout talks underway

All eyes are on Cyprus as the small island nation awaits news of its economic fate, having become the latest casualty of the debt-wrought Eurozone.

Cyprus bailout talks underway

Cypriot president Nicos Anastasiades remained locked in discussions with Brussels “bailout bosses” yesterday, amid reports that the leader has threatened to resign if a solution to unlock much-needed cash cannot be agreed upon soon.

“Do you want to force me to resign?” the Cyprus News Agency quoted Mr Anastasiades saying to EU and IMF chiefs, as they met in the Belgian capital.

“I am giving you one proposal, and you do not accept it. I give you another and it’s the same. What else do you want me to do?” he was quoted as saying.

The clock is ticking for the Mediterranean country, which faces bankruptcy and a potential exit from the euro if it cannot secure urgent funds from Europe’s so called ‘troika’ – the European Union, European Central Bank and the International Money fund

The chances of meeting today’s deadline, set by the European Central Bank, to secure the 10 billion euro loan needed, seem bleak. But, if the country fails to do so, it faces a threat of being cut off from the euro altogether, left to fend for itself – a move that would reverberate across the European Union.

The crisis talks come less than a week since Cyprus’s first failed attempt to raise the 5.8 billion euros needed to qualify for a bailout loan, after a tax on bank loans was vetoed by its own parliament and strongly opposed by outraged citizens.

At the moment, the situation on the ground in Cyprus is grim, as banks have continued to remain closed for over a week now, and yesterday’s imposition of 100-euro daily withdrawal limits at ATM’s across the country. It is a move that undoubtedly hopes to quell the growing lines of citizens seen withdrawing much of their funds, amid fears and uncertainty. 

The situation has hurt small businesses the most, with employers unable to pay their employees and customers incapable of raising the funds for their everyday purchases. Reports are that shops and petrol stations are now only accepting cash transactions, as the movement of funds in the country of less than one million, comes to a grinding halt.

While the Cypriot bailout is described as “pittance”, in comparison to the hundreds of billions requested by its close ally and neighbour Greece, since the European bailouts begun almost three years ago, the worry amongst many economists and leaders is that the fallout could effect other already vulnerable countries such as Spain and Italy.

The mood was anxious across the country yesterday; reports on the ground are that the Cypriot people are feeling more unsettled than ever about their future, as they face the worse crisis since the 1974 Turkish invasion and occupation of northern Cyprus. It was an event that has left the island divided ever since.


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