Cyprus Parliament Turns Down Bailout Package

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The Cypriot Parliament has just voted against the bailout package presented over to the table by the Eurozone.

Thirty six votes turned down the proposal with 19 members of the Parliament abstaining, defeating the rescue measure that would have levied a tax on deposits in the island-state of Cyprus.

The abstained votes came from President Nicos Anastasiades’ party, which has 20 seats in the 56-member parliament.

Questions on what happens next has been discussed around the business world with news about the defeated votes dominating Twitter.

Hours before the decision was made in Cyprus, UK’s Royal Air Force has flown one plane carrying €1 million for the country’s citizens living in the Euro-denominated state in anticipation of the potential continued closure of banking, as a result of the dilemma.

This is the first time a member of the Eurozone defied the troika and rejected its proposed bailout terms, which, when not agreed, risked to throw the nation in default of its financial obligations.

Earlier warnings that the ECB will stop providing emergency liquidity assistance should Cyprus reject the proposal did not deter the Parliament as not one voted for the proposal, to the delight of the Cypriots protesting in front of the Parliament building.

Banks are expected to remain closed beyond Thursday as fears of a bank run will further undermine the already shaky state of the economy, which now hangs by a thread.

 

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