It is now for the Cypriot authorities to present an alternative scenario,  respecting the debt sustainability criteria and corresponding financing parameters, the European Commission said Wednesday, following the rejection last night by the Cypriot House of the deposits levy imposed by the Eurogroup.

Speaking to the press, EC spokesman Olivier Bailly said that the Commission has done its utmost to assist Cyprus and to work for a constructive and managed solution. However, he added, decisions are taken by the Member States and no decision can be taken without their cooperation including Cyprus itself.

“The Commission continues to stand ready to facilitate solutions and is continuing contacts with Cyprus, the other Member States in the Eurogroup, the EU institutions and the IMF”, he underlined.

He went on to say that regarding the one off levy on deposits below 100.000 euro, the Commission made it clear in the Eurogroup , before  the vote in the Cypriot parliament, “that an alternative solution respecting the financing parameters would be acceptable, preferably without a levy on deposits below 100.000 euro”.

“The Cypriot authorities did not accept such an alternative scenario”, Bailly said.

In a written statement issued by the Commission , which was read to the journalists by Bailly, it is noted that the need for assistance in Cyprus comes essentially from problems in the Cypriot banking sector which was unsustainably large for the size of the Cypriot economy.

It is said that it was not possible to conclude negotiations on a programme with the previous Cypriot government and that last Saturday, in the Eurogroup, there was a unanimous agreement between the Member States, including Cyprus, on a programme that met the conditions fixed by the Member States, the ECB and the IMF, agreeing to lend EUR 10 bn to Cyprus.

“These conditions included reaching an acceptable level of debt sustainability and the corresponding financing parameters. Whilst this programme did not in all its elements correspond to the Commission`s proposals and preferences, the Commission felt the duty to support it, since the alternatives put forward were both more risky and less supportive to Cyprus`s economy”, it is underlined in the statement.