Friday

20th Oct 2017

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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.

Macron puts trade policy on summit table

France's president wants a "political discussion" on EU trade policies at Thursday's summit, amid domestic concerns over Canada and South America deals. But his colleagues are likely to avoid a lengthy debate.

News in Brief

  1. Dutch PM: Brexit is 'still a bad idea'
  2. Commission to issue proposal on civil protection
  3. Tusk: 'No space' for EU intervention in Catalonia
  4. Austrian PM calls Brexit talks speed 'big disappointment'
  5. PM Muscat: journalist murder 'left a mark' on Malta
  6. Belgian PM: No crisis with Spain over Catalan remarks
  7. Ireland PM: Further Brexit concessions needed from UK
  8. Merkel: rule of law in Turkey going 'in wrong direction'

Stakeholders' Highlights

  1. European Jewish CongressEJC Applauds the Bulgarian Government for Adopting the Working Definition of Antisemitism
  2. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  3. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  4. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  5. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  6. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  7. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  8. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  9. CECEE-Privacy Regulation – Hands off M2M Communication!
  10. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  11. EU2017EEEHealth: A Tool for More Equal Health
  12. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness