Tuesday

15th Jun 2021

EU leaders under fire over Cypriot 'fiasco'

  • The Irish EU presidency said Cyprus will never happen again (Photo: EUobserver)

EU leaders were in the firing line in Strasbourg on Wednesday (17 April), as MEPs accused them of "grave mistakes" over the Cypriot bailout.

Hannes Swoboda, the Austrian leader of the Socialist and Democrat group, accused German finance minister Wolfgang Schauble of "neocolonial behaviour" in terms of forcing Cyprus to seize money from some wealthy bank depositors' accounts.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

He also called on the European Commission to disband the troika - a partnership between the commission, the European Central Bank and the International Monetary Fund which oversees the negotiation and implementation of bailout packages.

In a broadside aimed at EU economic commissioner Olli Rehn, Swoboda said the Rehn should "never have agreed to the attack on the deposits below €100,000, it has destroyed confidence and trust."

The first bailout model, rejected by Cypriot MPs, was to see seizures of money from small savers also despite EU laws saying deposits below €100,000 are sacrosanct even if a bank is going bust.

For his part, Guy Verhofstadt, the Belgian leader of the Liberal group, called on MEPs to set up a committee of inquiry into the Cypriot bailout talks.

"What went wrong in the Eurogroup? Who proposed the levy on small depositors," he asked, referring to the club of euro-using countries' finance ministers chaired by Dutchman Jeroen Dijsselbloem.

Eurozone finance ministers signed off of the final-model rescue package in Dublin last week, with the EU and IMF to loan €10 billion and Cyprus expected to raise additional funds of up to €13 billion through the levy on wealthy savers, as well as privatisations and cuts to public spending.

The first tranche of cash to the Mediterranean Island is expected to be paid out in mid-May.

Defending the deal, Rehn told MEPs on Wednesday the bailout package would "enable Cyprus to avoid a disorderly default." He added that leaders had "had to find unique solutions to exceptional problems … under enormous time pressure."

Dijsselbloem also came in for criticism.

The spokesman for the centre-right EPP group, Jean Paul Gauzes, described Dijsselbloem's handling of the bailout negotiations as a "fiasco."

He added that "the Eurogroup's communication was [also] very poor," with bits of news leaking out and with Dijsselbloem making statements to press that he later took back or "clarified."

For her part, the Irish European affairs minister Lucinda Creighton, speaking for the EU presidency, described the Cypriot situation as "extremely regrettable" and "the human consequences are the most regrettable of all."

She added that what happened on Cyprus "was and is exceptional."

Bundestag likely to approve Cyprus bailout

The German parliament is likely to approve Cyprus' bailout programme despite concerns over a widening funding gap and growth projections which may prove too optimistic.

News in Brief

  1. BBC and others boycott Belarus press circus
  2. Report: EU and US to unveil aircraft subsidy truce
  3. Putin refuses to guarantee Navalny will survive jail
  4. Erdoğan agrees to pull out mercenaries from Libya
  5. EU starts sale of first bonds for Covid-19 recovery fund
  6. Germans told not to 'storm pharmacies' for Covid pass
  7. Indonesia warns Covid-19 wave may not peak until July
  8. WTO chief: 'drop trade barriers on Covid-19 treatments'

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. China officially joins Russia as a danger to Nato
  2. German Greens face reality check amid CDU gains
  3. EU Parliament wants Europe to take lead on sea-rescues
  4. MEPs urged to end gas-funding, fix cross-border projects rules
  5. Biden in Brussels - what's in the 'in-tray'?
  6. Yemen foreign minister to EU: to stop the war, talk to Iran
  7. Brexit grumbles overshadow UK summit
  8. Former French PM to work for Russian oil firm

Join EUobserver

Support quality EU news

Join us