Cyprus loan terms will instil fear in bank depositors across Europe - Doherty

March 16, 2013

Responding to released details of the Cypriot loan deal, Sinn Féin Finance Spokesperson Pearse Doherty TD said the imposing of an up to 10% levy on ordinary depositors in the country would instil fear on bank depositors across Europe. He said the move made a mockery of the deal agreed last year to separate sovereign debt from banking debt. 
He added that the Irish Government needed to report what progress they have made on securing a deal on Ireland's banking debt. 

Deputy Doherty said:
"The decision last night to impose a levy of 6.75% on ordinary Cypriot deposit holders under €100,000 and a 9.9% levy on those over €100,000 is madness. From what we are hearing no bank bondholders are to suffer losses in this 'deal', but savers are going to be burnt, at a time when Europe needs depositors and needs to offer depositors real security to get them. Already there are reports of people queuing outside Cypriot banks to try to withdraw their money. Europe has caused a bank run in a eurozone country. 

"This move makes a mockery of the deal agreed last year on separating banking debt from sovereign debt. One year on, here we have a sovereign and its people again being told to pick up the tab for a banking mess. Where is the ESM and direct capitalisation of the banks in all of this? In addition, we have Europe instructing a sovereign to increase its corporation tax, something which will send a shiver throughout this state. 

"I would also like to know what progress the Irish Government has made on separating our banking debt from sovereign debt in the last 24 hours. Are we to get a banking deal, or is this Government just stringing us along and trying to distract us with other, weaker measures?"

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