Bailout rejection puts Cyprus back in the hole
By The Washington Post
Published: Tuesday, March 19, 2013, 8:48 p.m.
Updated: Tuesday, March 19, 2013
Lawmakers in Cyprus on Tuesday rejected a bailout plan that would have rescued the country's banks but forced savers to chip in for the cost, throwing down a gauntlet to the rest of Europe over the financial fate of the tiny island nation.
The plan to save Cyprus's collapsing banks but to charge depositors for the service proved so controversial that not one of the 56 members of Cyprus's parliament voted for it Tuesday evening.
The rejection leaves the fate of rescue plans up in the air, with other European leaders so far unwilling to step in to save Cyprus, where bank deposits tower over the rest of the economy.
The rejection leaves Cyprus, the International Monetary Fund and the rest of Europe in a standoff familiar from previous bailout negotiations, with the country trying to navigate its local politics and possibly get a better deal for itself as the others stand firm on how much they want to commit to yet another troubled euro-zone nation.
The fate of the 17-nation currency union, meanwhile, again hangs in the balance, threatened by a country that constitutes just 0.2 percent of the zone's collective economy. Throughout the crisis, European policymakers have tried to keep any country from leaving the euro. Losing a member nation would pose uncertain risks to the world financial system and be politically embarrassing.
- Unchecked looting guts Egypt’s heritage, with one ancient site ‘70 percent gone’
- Egyptologist risks life, career to expose looting
- United States, Taliban to start talks in Qatar office
- We only sell real thing, Egyptian grave-robbing family boasts
- Turkey threatens to use military against demonstrators
- Chinese supercomputer declared world’s fastest
- Report: U.S. long ready to aid rebels
- Syria divides G8 summit
- New diet craze offers 5 days of feasting for 2 days of famine
- Montreal’s anti-corruption mayor arrested on fraud allegations
- Egyptian court decision troubles world leaders
You must be signed in to add comments
To comment, click the Sign in or sign up at the very top of this page.
Subscribe today! Click here for our subscription offers.