Saturday

13th Apr 2024

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

Get the EU news that really matters

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

... or subscribe 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.

Resist backlash on deforestation law, green groups tell EU

European environmental groups have urged the EU Commission to stand firm on implementing the bloc's landmark anti-deforestation legislation — despite a backlash from governments in South America, Africa and some EU ministers.

Opinion

This 'deregulation' lobbying now threatens EU economy

Next week's EU summit (17-18 April) will discuss the strategic agenda for the next five years. The current "competitiveness agenda" is to a large extent driven by a big lobbying campaign — so far, not well covered by the media.

Latest News

  1. UK-EU deal on Gibraltar only 'weeks away'
  2. Belgium declares war on MEPs who took Russian 'cash'
  3. Brussels Dispatches: Foreign interference in the spotlight
  4. Calling time on Amazon's monopolism and exploitation
  5. Resist backlash on deforestation law, green groups tell EU
  6. China's high-quality development brings opportunities to the world
  7. Ukraine tops aid list again, but EU spending slumps
  8. Who did Russia pay? MEPs urge spies to give names

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us