Nicosia– The situation is serious but not tragic, Government Spokesman Christos Stylianides told CNA today, commenting on the terms of a bailout agreement on the Cypriot economy earlier today by the Eurogroup.
He also noted that depositors would be compensated for losses incurred, as a result of the bailout agreement, in stock and through other means.
Stylianides said that the President of the Republic Nicos Anastasiades and his team fought hard during the lengthy negotiations in Brussels on the terms of the agreement.
The Eurogroup decided to solve Cyprus’ financing problem, he said, adding that the Eurogroup decision has yet to be approved by the House of Representatives.
“The situation is serious but not tragic and there is no reason to panic,” he stressed.
The Spokesman said that President Anastasiades returns to Cyprus late in the afternoon and he will immediately convene a meeting of parliamentary party leaders in order to fully brief them on the bailout agreement, in an attempt to deal collectively with the situation.
The fact that Cyprus had reached a point of no return due to procrastination and indecision should not be ignored, he pointed out.
The decision the government was faced with was either to save the economy or opt for an irregular default, he pointed out.
“The dilemma before us was whether we would have a functional economy or total collapse on Tuesday. The dilemma was whether to give in at the 6.75% mark or lose 100%,” he explained.
The percentage which will be cut on deposits is equal to the interest one would gain for a period of 18 months, he said.
Stylianides further said that salaries, pensions and welfare payments have been safeguarded.
“The decision was a painful one but without an agreement the situation would have been tragic”, he stressed.
“Right now we are called to collectively decide on the future of our country and of the generations to come”, he concluded.
Cyprus and Eurogroup reached a political agreement on a bailout programme totaling 10 billion euro for the Cyprus economy, in the early hours of Saturday morning, following ten hours of talks in the Belgian capital. The agreement includes an unprecedented one-off levy on bank deposits to raise 5.8 billion euro and an increase in corporate tax from 10% to 12.5%. (CNA)