Finance ministers from the 17-country Eurozone held an emergency video conference call on Monday, to discuss the likely terms of a controversial bailout that threatens to force Cyprus savers to accept the loss of €5.8bn from their savings accounts. The raid will mean an average of 10% off the value of Cypriot savings, though it is likely to be progressive with smaller savers paying proportionately less. Cyprus’s President, Nicos Anastasiades, is still trying to get the bill amended before it goes before a parliament which has promised to reject it.
The group said that Cypriot authorities could stagger the deposit seizures and offered a different rate for lower levels of savings, but insisted that the overall sum must remain the same.
In an unprecedented move, European citizens are being required to pay for the bail-out of their banking system not through public funds but directly, in their own savings cash. The natural response would be to simply empty savings accounts, so Cypriot banks have shut down to prevent a run and are expected to remain closed until at least Thursday.