Thursday, March 21, 2013

New Plan Formulated, Being Drafted for Presentation

Cypriot government and central bank officials held emergency talks today. 
21st March 2013

In a written statement the government has announced that party leaders have unanimously agreed to create an Investment Solidarity Fund to raise 5.8 billion euros which is at this moment being drafted by the Law Office of the Republic. The details of the fund have not been made public, however it is believed to contain provisions to protect smaller bank deposits and draw funds from several internal sources such as those described in my earlier post today Parliament Meeting to Continue Talks of Last Night; Hash Out New Plan. The Investment Solidarity Fund is expected to be voted upon later this evening. The plan must be approved by Troika.

The Central Bank has given Cyprus a deadline of Monday to come up with a plan to raise the 5.8 billion euros otherwise its banks will no longer be supported, bankruptcy will ensue and Cyprus will likely leave the Eurozone and revert to the Cyprus pound. As a reminder, during its bailout out negotiations, Greece was perennially on the verge of leaving the Eurozone and returning to the Drachma. 

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