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Cyprus parliament approves bailout

April 30. 2013 12:37PM
Associated Press

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NICOSIA, Cyprus (AP) Cyprus' lawmakers approved on Tuesday a multi-billion bailout agreement with international creditors aimed at preventing the crisis-hit country from going bankrupt.

The agreement was passed in the 56-seat parliament as expected with 29 votes in favor and 27 against. Cyprus struck the 23 billion euro ($30 billion) deal with its euro partners and the International Monetary Fund last month.

Voting in favor were the ruling center-right Democratic Rally party and its ally the Democratic party, which together hold exactly half the seats. Casting the deciding vote was right-wing European Party leader Demetris Syllouris.

"If there was another realistic alternative, our decision would surely be different. Unfortunately, we have no other choice," said Democratic party leader Marios Garoyian.

The communist AKEL and socialist EDEK parties voted against the deal they said undermines the country's sovereignty and leads to social misery.

"Our vote cannot be positive to the prospect of national, state and economic subjugation," said Parliamentary Speaker and EDEK leader Yiannakis Omirou.

The government had warned the agreement's rejection will mean the country's economic collapse and possible exit from the euro, which is used by 17 European Union countries.

Cypriot President Nicos Anastasiades had earlier appealed to lawmakers to act with the national interest in mind.

"What we're called upon today to do is to adopt a loan agreement that will allow our country to breathe and to give us the chance to overcome whichever problems we're facing amid this crisis," Anastasiades told reporters.

But anger still lingers over the deal's terms which include forcing depositors to take major losses on savings over 100,000 euros in the country's two biggest lenders. Second-largest lender Laiki which was worst affected by its exposure to toxic Greek debt and loans is being wound down and folded into the bigger Bank of Cyprus.

Adding to the frustration among local businesses and ordinary Cypriots are a string of capital controls such as a 300-euro daily withdrawal limit that authorities imposed last month to prevent a run on banks.

Hundreds of protestors gathered outside parliament for an anti-bailout demonstration called by left-wing trade unions and organizations. Demonstrators held aloft banners reading "No, this homeland not for sale."

Other European parliaments, including those of Germany and the Netherlands, have already signed off on the accord and Cypriot lawmakers have already approved most of its terms.

Ahead of the vote on the bailout, Cypriot lawmakers approved additional, bailout-mandated public sector pay cuts and a property tax.

Cyprus' state coffers are effectively empty. Government spokesman Christos Stylianides said the first installment of bailout cash should arrive by mid-May once the deal is approved.

Associated Press

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