South Cyprus: only 3 out of 9 bills passed

The Greek Cypriot parliament remained in session until the early hours of yesterday morning; however, only 3 of the 9 bills put forward are now law.

It is hoped that the remainder will be passed on Monday. This reaches the deadline that the EU has given South Cyprus to come up with an acceptable package of measures or else liquidity funding will be withdrawn from the two largest banks.

In fact the bills passed so far have only had 28 members of parliament voting, with 26 pushing the bills through, 2 against and 25 abstaining.

The most controversial bill has yet to be passed and that is one involving a bank levy. DISY party leader, Averof Neofitu, who supports the coalition government, said yesterday that there were two major proposals being considered in relation to the levy. The levy now will only apply to deposits of over 100,000 euros. Either all such large deposits will have a levy of 15% or the levy will be restricted to only large deposits at the Bank of Cyprus which would attract a rate of around 25%.

The final outcome is not yet known with frantic negotiations with the EU in progress today. Whatever decisions are made, South Cyprus is destined to emerge with a battered financial sector, capital controls and years of austerity to follow.

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