ATHENS, April 2 (RIA Novosti) – Cypriot Finance Minister Michalis Sarris has tendered his resignation after concluding talks with the troika of international lenders on a controversial bailout deal to rescue the island nation from financial collapse, Cypriot TV channels reported on Tuesday.
Sarris is reported to have resigned to ease the work of a special commission established by President Nicos Anastasiades investigating the causes of the country’s financial crisis. Sarris had previously headed the troubled Laiki Bank, the country’s second-largest lender, which will be shut down under the bailout deal, forcing losses on its account holders.
Anastasiades has accepted Sarris’ resignation and appointed Labor Minister Harris Georgiades as Cyprus’ new finance chief. Anastasiades is also considering a reshuffle of the Cypriot Cabinet, local TV channels said.
Cyprus has had to agree to overhaul its outsized banking sector and force losses on bondholders and savers with accounts of over 100,000 euros in the country’s two biggest banks in return for the much-needed 10 billion euro ($13 billion) bailout from the European Union, the European Central Bank and the International Monetary Fund.
Under the rescue deal, Laiki Bank will be broken up and its deposits of less than 100,000 euros will be moved into the Bank of Cyprus, the country’s largest lender, which will be restructured. Laiki Bank’s deposits of over 100,000 euros will be frozen and used to resolve its debts while depositors with more than 100,000 euros at the Bank of Cyprus could face losses of up to 60 percent on their savings.
The original bailout scheme that caused outrage in Cyprus envisaged a one-off levy of 6.75 percent on deposits of less than 100,000 euros and of 9.9 percent on larger deposits to yield some 5.8 billion euros ($7.5 billion) in revenues for the Cyprus budget and unlock the much-needed rescue package.
The new deal is expected to yield some 4.2 billion euros to add to the 10 billion euro bailout.
