Cyprus Crisis

Topics: Cyprus, European Union, Euro Pages: 2 (760 words) Published: August 20, 2013
Milestones of Cyprus crisis
The banking and financial crisis in Cyprus began in January 6th, 2012. On June 25th, 2012, Cyprus officially became the 5th country in Eurozone requiring a relief from European Financial Stability Facility (EFSF). Cyprus demanded about €17.5 billion to resolve difficulties. However, due to President Demetris Christofias’s refuse to comply with strict procedures set by creditors, the negotiation for relief landed in an impasse. The win of President Nicos Anastasiades earlier this year has restarted the negotiations between Cyprus and its creditors. Then the Finance Ministers in Eurozone and International Monetary Fund agreed to provide the Republic of Cyprus with €10 billion which is less than expected on March 16th, 2013. Conversely, the Government of Cyprus would minimize the number of difficult banks, privatize some assets owned by the State, increase nominal corporate levy rate to 12.5% and apply a single levy at 9.9% for deposits over €100,000 and 6.75% for deposits with a lower value. Cyprus President declared that this is the only way to prevent the financial system from falling into insolvency and compensate civil people for their deposits by banking shares. However, Cypriot exhausted the wealth of ATMs by a serious bank run. Besides, the security and banking market of Cyprus became idle. On March 19th, most deputies in Cyprus Congress rejected the levy on deposits in exchange for a bailout of €10 billion from the European Union and the International Monetary Fund. The Cypriot respires and the global financial market flourishes. Nevertheless, the disobedience of Cyprus to the given conditions may cause its insolvency since lack of money. “Cyprus officially required a relief from Russia to resolve the current crisis” declared Michael Sarris, The Minister of Finance in his speech at Moscow on March 21st. He emphasized Russia’s bailout is considered to be Russia’s protection of interests. According to Moody's organization, the...
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