Bank of Cyprus, in a dramatic appeal urged on Friday the Parliament to approve a levy on deposits in a bid avoid the collapse of the Cypriot financial sector.
Bank of Cyprus, the island’s biggest banking sector, appeal comes just a few hours before the Parliament’s extraordinary session later in the day that will debate on a proposed bill introducing a tax levy, which was rejected on Tuesday. The approval of the levy would unlock a €10 billion financial assistance package to Cyprus, which appeal for a bailout last June after its two largest banks sought state aid following massive write-downs the Greek bonds holdings amounting to 4.5 billion due to the haircut of the Greek sovereign debt.

“We address a dramatic appeal to the political leadership to consider the responsibilities upon all of us as to where the Cypriot economy is heading,” Bank Cyprus Board of Directors Chairman Andreas Artemi said.
“It should be understood by all, citizens and politicians and especially by the 56 members of parliament that from the minute it was obvious that no other alternative, there should be no further delay in the ratification of the Eurogroup`s proposal on the introduction of which ever levy on banking deposits above €100,000, necessary for the salvation of our banking system,” he stressed.

He noted that the citizens should be aware that a possible collapse of the banking sector will lead to the total loss of all deposits over €100,000, as well as the immediate liquidation of the collateral attached to the non performing loans,” adding that this would also lead to the immediate closure of many businesses and the loss of thousands of jobs not only in the banking sector.
Artemi also rejected the option of a Cyprus exit from the Euro area, noting that “this would entail the considerable loss of the value of the citizens` property, that would lead to a vicious circle of devaluation and deflation.”

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