Cyprus faces a hard deadline of Monday imposed by the European Central Bank to avoid a total banking collapse that could echo throughout the region.
By Shepard Ambellas
March 23, 2013
NICOSIA — Cypriots finance minister (Michalis Sarris) stated Saturday that they have made “significant progress toward reaching an agreement” as thing in the presidential sector heated up.
The region now teeters on the brink of economic turmoil as over 1000 bankers marched from the Cyprus Union Bank headquarters to the Presidential Sector in fear of loosing their jobs. The protestors were stopped by police at the presidential compound for sometime but were eventually let by.
The Raw Story reported today that;
The Cypriot authorities are scrambling to raise 5.8 billion euros ($7.5 billion) before a Monday deadline set by the European Central Bank or it will cut off emergency financial aid to the island.
Finance Minister Michalis Sarris said “significant progress” has been made in talks with the EU, ECB and IMF aimed at clinching a 10 billion-euro ($13 billion) bailout to save the eurozone member from looming bankruptcy.
Some now argue that this bailout is not the solution but rather a mere temporary lifeline. The New York Times reported, “European Union leaders “may conclude that it is best to let Cyprus default, impose capital controls and leave the euro zone,” Nicolas Véron, a senior fellow at Bruegel in Brussels and a visiting fellow at the Peterson Institute for International Economics, said in a recent assessment. “But such a move would violate the promise of European leaders to ensure the integrity of the euro zone no matter what and potentially set off a chain reaction, including possible bank runs in other euro zone member states, starting with the most fragile ones, such as Slovenia and, of course, Greece.”
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