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Cyprus Passes Bailout Deal

April 30, 2013

Lawmakers in Cyprus on Tuesday approved the terms of an international bailout which includes imposing considerable losses on bank depositors and restructuring the banking sector, as hundreds of angry protesters demonstrated outside parliament.

The 23-billion-euro (30.3-billion-dollar) bailout bill was passed with 29 votes in favour and 27 against in the 56-seat parliament.

The vote comes as calls mount for the island to exit the euro. Hours earlier, lawmakers had approved austerity measures, including a mandatory property tax and public sector pay cuts.

The aid programme includes 9 billion euros from Europe's bailout fund and 1 billion euros from the Initernational Monetary Fund. Cyprus has to find an additional 13 billion euros from its own resources.

Part of the money will come from closing down the country's second-largest bank, Laiki, and imposing losses of up to 60 per cent on uninsured depositors at the Bank of Cyprus.

"We do not have another choice but to pass the bill - there is no other choice and whoever has an alternative plan should tell the rest of us what it is," government spokesman Christos Stylianides told state radio RIK.

In March, parliament voted against an initial plan to force both insured and uninsured depositors to pay a tax to fund the recapitalization of the two troubled banks that were heavily exposed to Greek debt.

Parliament has already ratified austerity measures that include tax increases and restructuring the banking sector.

The new vote will cover additional austerity measures drawn up by international creditors - the European Commission, European Central Bank and the IMF. Those measures include downsizing the public sector.

European officials have said Cyprus should receive the first tranche of bailout aid in early May.

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Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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