“Cypriot lawmakers approved capital controls and legislation to wind down banks as they scrambled to secure a European bailout and avert a financial collapse of the Mediterranean island.
The parliament passed nine bills late yesterday after a day locked in talks between Cypriot and international officials in Nicosia. Lawmakers may vote later today on what sort of levy to impose on bank deposits above 100,000 euros ($130,000), four days after rejecting an initial proposal to tax all accounts. Banks have been shut all week and are due to reopen on March 26.
President Nicos Anastasiades is trying to end a week-long impasse that is starting to threaten the country’s membership in the euro. The European Central Bank has imposed a March 25 deadline on Cyprus to come up with proposals that will satisfy international creditors or face the risk of losing access to all emergency funds.
“We cannot fund banks that are bankrupt,” ECB council member Erkki Liikanen told Finland’s YLE TV1 today. “There is now a chance of drawing up a program in which the banks are recapitalized or reorganized to reach solvency. The ball is in Cyprus’s court.” …”
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