Post by Focus on Apr 3, 2013 11:10:07 GMT
British taxpayers will have to pay €45m (£38.2m) as part of a deal struck by European leaders to rescue Cyprus, it was confirmed on Wednesday, after the International Monetary Fund agreed to contribute €1bn towards the country's bail-out.
Christine Lagarde, the IMF's managing director, said that the €10bn rescue hammered out between Cyprus, EU ministers and the IMF would help to "restore the health of the economy".
“The program builds on resolute policy steps taken recently. First, problems in the two largest banks are being addressed upfront with an approach that avoids putting additional burden on taxpayers and contributes to putting public debt on a sustainable path," Ms Lagarde said in a statement.
Ms Lagarde also said that protecting customers with deposits of less than €100,000 in the country's stricken banks was a key part of the deal
Ms Lagarde also said that protecting customers with deposits of less than €100,000 in the country's stricken banks was a key part of the deal. "Importantly, insured depositors (representing over 95 percent of the total number of account-holders in the two affected banks) have been fully protected," she said.
The Treasury has already flown more than £10m in cash to Cyprus to ensure that British troops and their families stationed in the country have had access to cash amid the financial chaos.
Britain's new banking watchdog, the Prudential Regulation Authority, also brokered a deal this week to rescue 15,000 savers’ deposits held by ailing Cypriot lender Laiki by transferring them to Britain. On average, Laiki customers in the UK have £18,000 in their accounts.
The United States - by far the biggest contributor - which will pay €177m (or a 17.7pc share) towards Cyprus's rescue.
Japan, the fund's second largest contributor, will pay €65.6m, while Germany's €61.2m share will come in addition to its loans via the EU. The funds are expected to be approved by the IMF's board in early May.
Separately, Cypriot President Nicos Anastasiades warned on Wednesday of "difficult days ahead" as he swore in a new finance minister for an island struggling to recover from a near financial meltdown and the need for a crippling eurozone bailout.
Haris Georgiades started his new role on Wednesday amid an investigation into how the island was pushed to the verge of bankruptcy.
Haris Georgiades, a Reading University graduate, will be the new finance minister of Cyprus
The 40-year-old economist, a Reading University graduate who had been serving as labour minister, took up his new post a day after Michalis Sarris said he was stepping down to cooperate with judges investigating the failure of Laiki Bank, where he was chairman.
"I have no doubt that you will not only accomplish your task to the full, but in the best way possible that is worthy of your predecessor," Mr Anastasiades told Mr Georgiades at the swearing-in ceremony.
Mr Sarris, who spent just five weeks in office, quit immediately after talks to iron out details of the island's €10bn bail-out concluded on Tuesday.
Mr Sarris said he believed stepping down was "the right thing" to do as he was among several figures under scrutiny by a commission investigating the conditions which led to the collapse of the country's banking system.
Excuse me, what the hell has the collapse of Cyprus's finances got to do with the British taxpayer and why the f**k should we pay for it??? - Fx