Tuesday

22nd Jan 2019

Bundestag approves Cyprus bailout

  • The German Bundestag has approved all eurozone bailouts so far (Photo: BriYYZ)

The German Parliament on Thursday (18 April) approved with a large majority a €10 billion EU and International Monetary Fund bailout for Cyprus. They also backed a request to give seven extra years for Ireland and Portugal to repay their loans.

Out of the 600 MPs who cast their vote on the Cyprus bailout, 487 were in favour, 102 against and 13 abstained.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The Bundestag previously had threatened to veto a Cyprus deal due to concerns over money laundering and doubts that the tiny Mediterranean island is "relevant" enough for the eurozone to be worth saving.

Speaking ahead of the vote, German finance minister Wolfgang Schaeuble said even though the Cypriot economy is less than 0.1 percent of the eurozone GDP, letting the country go bust would undo the market confidence that has returned over the past year and endanger Greece, Portugal, Ireland and Spain.

"Cyprus is systemically relevant," Schaeuble said.

"I ask you to approve this package so that we can prevent Cyprus undermining the progress made in stabilising the eurozone," he added.

Separately, Schaeuble asked for the Bundestag to approve a seven-year loan extension for Portugal and Ireland, who "adopted a lot of reforms in the last years" and "deserve our respect."

MPs approved the request with similarly high majorities: 496 votes in favour for the loan extension for Portugal, 498 for Ireland.

The Social-Democratic opposition, while criticising the way Schaeuble handled the negotiations on the Cypriot bailout - which in a first version would have touched on all deposits on the island - approved the deal out of "European solidarity."

"We have to show solidarity with Cyprus, but not with tax evasion and money laundering," said SPD chief Frank-Walter Steinmeier.

He said the SPD got what it wanted as the Cypriot government agreed to impose losses on rich depositors and to increase the corporate tax, as well as accept an external audit on how banks implement rules against money laundering.

The only group having voted against the bailout was the leftist Linke, who criticised the German government for "dismantling the social systems" in all the bailed out countries and protecting "big banks" at the expense of the people on the street.

Linke MP Gregor Gysi also pointed out that an upcoming vote in the Cypriot parliament may thwart the deal. "Let's wait and see what happens," he said.

A vote will "for sure" take place later this month, but no date has been set yet, a Cyprus government spokesman told this website.

The government counts on a thin majority in the 56-seat parliament: 29 would be in favour, whereas the anti-bailout opposition can count on 27 votes.

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.

Ireland and Portugal set for debt deferral

Ireland and Portugal are to be given more time to repay their emergency loans with both countries seen as good pupils in following the imposed austerity programme.

EU bleeding untold billions to fraud

Over €6bn of EU taxpayers' money was stolen by criminals in recent years and over €130m is still being lost each year, EU auditors said.

News in Brief

  1. EU hits Mastercard with €570m fine
  2. Romanian minister prepares to cancel corruption cases
  3. Sefcovic: no gas supply problems this winter
  4. Report: Commission warning on passport-sale schemes
  5. France summons Italian ambassador over colonial remark
  6. May U-turn on fee for EU nationals in UK
  7. French data watchdog gives Google €50m fine
  8. EU hits Russians with sanctions over Salisbury attack

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. France and Germany hope to revive EU with Aachen treaty
  2. May pushes defeated Brexit deal, offers no Plan B
  3. European Parliament targets 'fake' political groups
  4. What is fate of non-euro EU states after Brexit?
  5. Turkish NBA star takes on Erdogan
  6. 'Meme ban' still on table in EU copyright bill, says MEP
  7. Brexit power grab by MPs hangs over May's 'Plan B'
  8. Polish mayor's funeral marred by Tusk TV dispute

Join EUobserver

Support quality EU news

Join us