18 April 2013

Federal Government: Green light for Cyprus package

The German Bundestag has approved the financial assistance for Cyprus. "Once again, the German Bundestag has faced up to its responsibility for the euro and the eurozone and sent out a strong signal", said Finance Minister Wolfgang Schäuble.

The German Bundestag voted, with a clear majority, to approve the assistance for Cyprus within the framework of the European Stability Mechanism (ESM). Germany would have been unable to play its part in the financial support for the island state without the approval of the nation’s parliament.

For Cyprus too it is true to say that, "Help is always help towards self-help", said Schäuble. Solidity and solidarity must go hand in hand. The situation of Cyprus is very specific. Its problems can only be resolved if its banking sector is significantly scaled down. "This aid programme will ensure just that", underlined the Federal Finance Minister.

Schäuble listed four factors essential for stabilising the euro:

• Relevant states must undertake essential reforms and all aid must be made strictly conditional on this
• The currency union must be restructured to make it a stability union
• The European Stability Mechanism (ESM)
• The banking sector in eurozone states must be stabilised with higher equity capital and a European banking watchdog.

"Progress can be seen in the countries hit by the crisis," he said. Little by little we are regaining lost confidence. "We have made good progress in overcoming the sovereign debt crisis in the eurozone over the last year in particular."

"The assistance programme for Cyprus is an important step in the further stabilisation of Cyprus and the eurozone. It stands for solidarity and solidity. We are helping Cyprus to help itself. Cyprus has made a commitment to implement far-reaching reforms. Three years after the beginning of the sovereign debt crisis, we are not out of the woods yet. following extensive reforms, however, we can say that Europe and the euro are in better and more stable shape than ever before. The euro countries are undertaking comprehensive reforms; the gap between north and south is closing. For an exporter like Germany, a stable common European currency is indispensable for growth, employment and prosperity. There are more jobs in Germany than ever before. Anyone who tries to shake the foundations of our common currency is ignoring the facts and putting Germany’s economic success at risk.”

Press release

Schäuble press release

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