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25 March 2013

Parliament gives cautious welcome to Cyprus deal but questions how it was handled


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The deal on Cyprus banks has been given a cautious welcome by Parliament, although it still has many reservations over how the situation was handled. (Includes link to EP President Schulz statement.)


EP president Martin Schulz said the deal "has brought us back from the edge", in a statement following the Eurogroup agreement on the bail-out of the Cypriot banking sector. However, he warned that this "is no way to do business in Europe", a sentiment also reflected in the statements of many parliamentary political leaders.

Mr Schulz welcomed that the deal had taken on board Parliament's insistence that deposits below €100,000 remain spared. However, he questioned how the negotiations had been conducted: "The way the case was handled is no way to do business in Europe. The negotiations lacked transparency, democratic accountability and were badly communicated. The president also stressed the "urgent" need for a banking union.

Joseph Daul, the French leader of the EPP group, and Corien Wortmann-Kool, the Dutch vice-chair responsible for the economy,  said in a joint statement that the deal "is better than last week's option and averts disorderly bankruptcy". They added the EPP group calls on the European Commission to explore all available means to help foster economic growth in Cyprus.

Hannes Swoboda, the Austrian leader of the S&D group, also welcomed the agreement on behalf of his group but added: "People's confidence and trust in the EU has been badly shaken during this period, in and beyond Cyprus".

Guy Verhofstadt, the Belgian leader of the ALDE group, commented:  "Cyprus is not sinless in the way it managed its banking system, but Europe must learn its lesson from this crisis. Europe cannot continue facing one state of emergency after another."

Sharon Bowles, a British member of the ALDE group who is the chair of the economic committee, praised the agreement for sparing small depositors: "It is based on a proper hierarchy of losses and on the acceptance that a bank can fail". At the same time she expressed reservations about how the situation had been handled: "Citizens and markets are puzzled by the degree of improvisation that eurozone leaders have shown".

Press release

Schulz on Cyprus: lessons must be learned



© European Parliament


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