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Uncertainty reigns in Cyprus

Friday, Mar 22, 2013 - 02:14

March 22 - The threat of bankruptcy overshadows a crucial parliamentary meeting in Cyprus, as Cypriots, lawmakers and investors alike remain in the dark over how the country plans to escape its debt mess. Kirsty Basset reports.

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Tension is growing on the streets of Cyprus, as the government scrambles to come up with a plan to avert financial disaster. People continue withdrawing the small amounts of money they can, as confusion and uncertainty fill the air. (SOUNDBITE) (English) RESIDENT, SPYROS TZIALLIS SAYING: "Nobody knows what's really going on, it's what we hear through the news we don't really know what everybody wants from Cyprus or what the Cypriots really want, in a way. Everybody is confused." Cyprus' government has until Monday to raise $5.8 billion euros to secure a bailout package to prevent bankruptcy. A government spokesman said various options were being discussed. (SOUNDBITE) (Greek) GOVERNMENT SPOKESMAN CHRISTOS STYLIANIDIS SAYING: "The parliament will be called upon to make great decisions, difficult decisions. Without doubt there will be painful aspects of any solution that is taken, but the country must be saved. The political leadership is obliged, despite any political differences, to finding a solution." Hopes were dashed Russia would throw the country a lifeline - two days of talks ended without a deal. Andrew Kenningham from Capital Economics says Cyprus doesn't have many options, and may be forced to raise the needed funds through taxing bank deposits after all. (SOUNDBITE)(English) SENIOR ECONOMIST CAPITAL ECONOMICS, ANDREW KENNINGHAM SAYING: "They really are looking into the banking sector to take some of the funding out of those deposits. That's obviously been politically very difficult and parliament's rejected it once already but I think there's a reasonable chance they will end up taking funds from the larger depositors and therefore reach agreement with the eurozone. But it's really hanging in the balance at this point." EU leaders are expected to discuss the situation over the weekend but even they seem unsure what will happen next. German finance minister Wolfgang Schauble. (SOUNDBITE) (German) GERMAN FINANCE MINISTER, WOLFGANG SCHAEUBLE SAYING: "My wife is asking me whether I am home this Sunday and the answer is: I don't know." Social unrest is growing and there's still a chance Cyprus will be forced to leave euro. Individually that may not be a major problem but the prospect of contagion certainly could be.

Uncertainty reigns in Cyprus

Friday, Mar 22, 2013 - 02:14

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