The Cypriot Parliament has been advised by the European Union and high profile bankers to raise the required 5.8 billion euros in order to be eligible for a bailout.
News of negotiations over attempts to raise the money have been confirmed by Christos Stylianides, a government spokesperson who said that there were “hard negotiations with the troika”; the troika being the EU, International Monetary Fund and the European Central Bank.
Cyprus’ Government have been facing a large amount of public pressure on the matter with protests occurring outside Parliament. Michael Sarris, the Cypriot Finance Minister had tried to obtain financial support from Russia on his trip to Moscow but failed. An alternative method of raising the funds needed was suggested which would mean the use of pension funds in order to save the country’s banks, however this has been met with strong opposition from Germany’s leader Ms Merkel.
Andreas Artemis, the Bank of Cyprus’ chairman commented, “ It should be understood by everyone… especially from the 56 members of parliament… there should not be any further delay in the adoption of the eurogroup proposal to impose a levy on deposits more than 100,000 [euros] to save our banking system.”
In response to this businesses within Cyprus have now started to decline card and cheques in favour of cash due to the uncertainty around the government’s decision on how to deal with the crisis.
There have been calls from within the Eurozone for Cyprus to reform its banking system which is currently too dependent on foreign investments. The crisis has caused foreign investors to be wary of investing money in Cyprus for fear of losing what they put in. Anton Siluanov, Russia’s Finance Minister said that there was little interest in the offshore gas reserves of Cyprus.