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Cyprus minister: Troika rejects our Plan B, and banks might never re-open

The interior minister says the Troika has rejected alternative options put forward by Cyprus for securing its €10 billion loan.

Image: Thanassis Stavrakis/AP

A CYPRIOT MINISTER has admitted his country’s two main banks may never re-open, after the troika of European and IMF lenders rejected a ‘plan B’ put forward by Cyprus for its €10 billion bailout.

Interior minister Socratis Hasikos said discussions with EU-IMF creditors last night, following the rejection of a controversial tax on bank deposits by the national parliament, had not been fruitful.

“The troika does not accept our Plan B,” Hasikos told Greece’s Mega television.

Essentially, [the Troika said] that Bank of Cyprus and Cyprus Popular Bank most likely will not reopen… at first sight we have a [Troika] refusal.

Cyprus is scrambling to secure funding for its banks by soliciting Russia, the church and state institutions for cash.

With banks closed and fears growing of a forced exit from the Eurozone, president Nicos Anastasiades huddled with party leaders and financial experts trying to track a way out of the island’s worst crisis since the 1974 Turkish invasion.

The meeting comes a day after lawmakers flatly rejected a highly unpopular measure that would have slapped a one-time levy of up to 9.9 per cent on bank deposits as a condition for an EU-led €10 billion bailout. The levy would have raised €5.5 billion which would be used to recapitalise the two banks.

The country’s finance minister has today travelled to Moscow for meetings with the Russian government about extending the repayment dates on previous bilateral loans, and potentially asking for Moscow’s involvement in a further batch of loans.

- © AFP, 2013

Read: Cyprus turns to Russia for help after MPs reject deposit tax

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