BERLIN, March 19 German Finance Minister
Wolfgang Schaeuble said on Tuesday the government and parliament
of Cyprus and the people who deposited money there had to take
responsibility for the solvency problems that had made a bailout
"The responsibility does not lie with the German government
nor with other European member states, it is Cyprus' decision,"
Schaeuble told German radio.
Germany and the International Monetary Fund have long
believed an international rescue for Cyprus had to be a
so-called "bail-in" with the participation of private depositors
in the island's oversized banking system, the minister said.
The announcement that Cyprus would impose a levy on bank
accounts as part of a 10 billion euro ($13 billion) bailout
prompted turmoil on financial markets.
Cypriot and euro zone officials have sought to soften the
initially proposed levy of 6.75 percent on depositors of up to
100,000 euros and 9.9 percent above 100,000 to ease the burden
on small savers.
"The business model in Cyprus has led to the country being
no longer solvent and it is very clear that this can not be paid
exclusively by European taxpayers," said Schaeuble. "How Cyprus
does this is for Cyprus to decide, not the euro zone."
"The government and parliament of Cyprus must decide on that
today," Schaeuble said.
He said it was misleading to talk about "savers" being hit
because such a large proportion of account holders were foreign
- many of them Russian - with deposits of much more than 100,000
euros who chose Cyprus because of its low taxes and regulation.
"Whoever deposits their money in a country because it will
be taxed less and controlled less runs a risks when the banks in
these countries are no longer solvent. That is what happened in
Iceland and in Ireland some years ago. European taxpayers should
not be made responsible for this risk," said Schaeuble.
(Reporting by Stephen Brown, editing by Gareth Jones)