The Malaysian Insider :: Breaking Views
The Malaysian Insider :: Breaking Views |
| Cyprus expected to detail heavy losses for major bank customers Posted: 30 Mar 2013 08:52 AM PDT  Lawmakers raise their arms to vote during a parliamentary session in Nicosia March 22, 2013. - Reuters picNICOSIA, March 30 — Cyprus was expected to confirm on Saturday that major depositors in its biggest bank will lose around 60 percent of their savings over 100,000 euros, under a bailout that has shaken European banks but saved the island from bankruptcy for now. German Finance Minister Wolfgang Schaeuble sought to reassure bank customers elsewhere in Europe, saying in an interview in Germany's Bild tabloid on Saturday that their savings were safe after the Cyprus deal. European officials have sought to stress that the island's bailout terms were a one off - after a suggestion by Eurogroup chairman Jeroen Dijsselbloem that the rescue would serve as a model for future crises rattled European financial markets. Initial signs that big depositors in Bank of Cyprus would take a hit of 30 to 40 per cent - the first time the euro zone has made bank customers contribute to a bailout - were already enough to unnerve investors in European banks this week. But a source with direct knowledge of the terms told Reuters on Friday that the conditions announced on Saturday would give depositors shares in the bank worth just 37.5 per cent of savings over 100,000 euros. The rest of such holdings might never be paid back. The toughening of the terms will send a clear signal that the bailout means the end of Cyprus as a hub for offshore finance and could accelerate economic decline on the island and bring steeper job losses. There is no sign for now, however, that ordinary customers in other struggling euro zone countries like Greece, Italy or Spain are taking fright. "Cyprus is and will remain a special one-off case," said Schaeuble, one of the main architects of the euro zone's response to a debt crisis now in its fourth year. "The savings accounts in Europe are safe." "Together in the Eurogroup we decided to have the owners and creditors take part in the costs of the rescue - in other words those who helped cause the crisis. "Cyprus's economy will now go through a long and painful period of adjustment. But then it will pay back the loan when it is on a solid economic foundation." Angry Cypriot President Nicos Anastasiades said on Friday that the 10-billion euro (RM39.66 billion) bailout had contained the risk of national bankruptcy and would prevent it from leaving the euro. Cypriots, however, are angry at the price attached to the rescue - the winding down of the island's second-largest bank, Cyprus Popular Bank, also known as Laiki, and an unprecedented raid on deposits over 100,000 euros. Under the terms of the deal, the assets of Laiki bank will be transferred to Bank of Cyprus. At Bank of Cyprus, about 22.5 per cent of deposits over 100,000 euros will attract no interest, the source said. The remaining 40 per cent will continue to attract interest, but will not be repaid unless the bank does well. Those with deposits under 100,000 euros will continue to be protected under the state's deposit guarantee. Banks on the island reopened to relative calm on Thursday after an almost two-week shutdown and the imposition of capital controls to prevent a run on banks by worried Cypriots and wealthy foreign depositors. The imposition of the controls has led economists to warn that a second-class "Cyprus euro" could emerge, with funds trapped on the island less valuable than euros that can be freely spent abroad. Under the terms of the capital controls, among other things Cypriots and foreigners are allowed to take only up to 1,000 euros in cash when they leave the island. Anastasiades said the restrictions - unprecedented in the currency bloc since euro coins and banknotes entered circulation in 2002 - would be gradually lifted. He gave no time frame but the central bank said the measures would be reviewed daily. — Reuters |
| Egypt’s prosecutor general to appeal his sacking Posted: 30 Mar 2013 08:42 AM PDT  Anti-Mursi demonstrators protest near the High Court in Cairo. — Reuters picCAIRO, March 30 — The man chosen as Egypt's chief prosecutor by President Mohamed Mursi will appeal a court ruling demanding he stand down, a fellow prosecutor said on Saturday. Mursi appointed Talaat Ibrahim prosecutor general last November, to the dismay of the Islamist president's opponents who said he had exceeded his powers. The decision to hire Ibrahim came in a constitutional decree issued in November that made all Mursi's acts immune from legal challenge. The president was forced to retract it after bloody street violence between his supporters and opponents that left at least 11 dead and hundreds injured. A Cairo court ruled on Wednesday that Ibrahim must quit and give the job back to his predecessor, Abdel Maguid Mahmoud. "Judge Talaat Ibrahim told us that he would challenge the ruling against him in front of an appeal court after he had reviewed the details of the ruling that he described as void, unconstitutional and illegal," state prosecutor Hisham al-Karmouty told Reuters after meeting Ibrahim. Wednesday's court ruling came two days after Ibrahim ordered the arrest of several opposition activists accused of inciting violence against Mursi and his Muslim Brotherhood. Ibrahim's appointment had prompted protests by members of the judiciary and many courts suspended their work in protest. He tendered his resignation in December when thousands of prosecutors surrounded his office for several hours, but later withdrew it. — Reuters |
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