Saturday

10th Dec 2016

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

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.

EU public lacks voice on banking laws

The complexity of financial laws and lack of NGO resources means the “man in the street” has little say on EU banking regulation, the EU Commission has warned.

News in Brief

  1. Council of Europe critical of Turkey emergency laws
  2. Italian opposition presses for anti-euro referendum
  3. Danish MP wants warning shots fired to deter migrants
  4. Defected Turkish officers to remain in Greece
  5. Most child asylum seekers are adults, says Denmark
  6. No school for children of 'illegal' migrants, says Le Pen
  7. Ombudsman slams EU Commission on tobacco lobbying
  8. McDonald's moves fiscal HQ to UK following tax probe

Stakeholders' Highlights

  1. Swedish EnterprisesHow to Use Bioenergy Coming From Forests in a Sustainable Way?
  2. Counter BalanceReport Reveals Corrupt but Legal Practices in Development Finance
  3. Swedish EnterprisesMEPs and Business Representatives Debated on the Future of the EU at the Winter Mingle
  4. ACCASets Out Fifty Key Factors in the Public Sector Accountants Need to Prepare for
  5. UNICEFSchool “as Vital as Food and Medicine” for Children Caught up in Conflict
  6. European Jewish CongressEJC President Breathes Sigh of Relief Over Result of Austrian Presidential Election
  7. CESICongress Re-elects Klaus Heeger & Romain Wolff as Secretary General & President
  8. European Gaming & Betting AssociationAustrian Association for Betting and Gambling Joins EGBA
  9. ACCAWomen of Europe Awards: Celebrating the Women who are Building Europe
  10. European Heart NetworkWhat About our Kids? Protect Children From Unhealthy Food and Drink Marketing
  11. ECR GroupRestoring Trust and Confidence in the European Parliament
  12. UNICEFChild Rights Agencies Call on EU to put Refugee and Migrant Children First