Monday

23rd Apr 2018

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 and Merkel pledge euro reform

France and Germany have pledged to forge a joint position on euro reform by June, despite German reluctance on deeper monetary union.

News in Brief

  1. Commission will 'not shy away' from Malta killing repercussions
  2. EU Commission opens probe on Alitalia state loan
  3. Paris suspect given 20-year sentence for Brussels shoot-out
  4. Merkel and Pena Nieto praise EU-Mexico trade agreement
  5. Nahles elected new leader of Germany's SPD
  6. Report: EU budget to refocus on South
  7. Audit office: Brexit 'divorce' bill could be billions higher
  8. MEPs urge better protection for journalists

Stakeholders' Highlights

  1. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  2. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  3. Mission of China to the EUProgress on China-EU Cooperation
  4. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  5. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  6. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  7. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  8. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  9. UNICEFCalls for the Protection of Children in the Gaza Strip
  10. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  11. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  12. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations

Latest News

  1. Hungary activists defiant after 'Soros Mercenaries' attack
  2. European Commission proposes whistleblower protection law
  3. Secrecy of VW fraud report 'unacceptable', says MEP
  4. 'Strong suspicion' of corruption in Council of Europe assembly
  5. France tightens immigration law, sparking division
  6. ECJ ruling set to end 10-year 'mouth tobacco' lobbying saga
  7. Whistleblowers, Syria and digital revolution This WEEK
  8. MEP friendship groups offer 'backdoor' for pariah regimes