– New Cyprus bailout plan met with skepticism (The Globe and Mail, March 22, 2013):
Cyprus’s parliament on Friday partly approved a revised formula for obtaining an international bailout to avert a default, amid strong signals that the plan would not pass muster with international lenders.
But they put off voting on a crucial new proposal until later this weekend – one that would confiscate a stunning 22 per cent to 25 per cent of uninsured deposits over €100,000 through a new tax to be placed on account holders in one of the nation’s most troubled banks.
And so, going into the weekend ahead of a Monday deadline imposed by the European Central Bank, it appeared there was still no immediate path to a lifeline of €10-billion that Cyprus needs to keep its banks from collapsing.
Monday is a national holiday, but banks are supposed to reopen on Tuesday for the first time in more than a week, and there is widespread fear of a classic bank run, as investors of all sizes drain their accounts.
Meanwhile, Cypriots jammed into supermarkets Friday to fill up on food and basic goods, after lining up all day Thursday at teller machines to withdraw as much cash as possible. Gas stations were only taking cash payments, and some retailers reported that they would no longer accept credit.