Cyprus deal is model for future bailouts says top European official as banks are told to open

The deal will see investors with more than €100,000 in the nation’s largest banks forfeit a large chunk of their deposits

A top European official has said the Cyprus bailout, agreed in last-ditch negotiations over the weekend, should become the bloc's default approach for dealing with ailing lenders.

Jeroen Dijsselbloem, who chairs the Eurogroup gatherings of the 17 eurozone finance ministers, said in an interview today that banks' owners and investors must be held responsible "before looking at public money or any other instrument coming from the public side."

Dijsselbloem, who is also Dutch Finance minister, said the €10bn Cypriot rescue marked a watershed moment in how to deal with failing banks.

He commented that European leaders should be committed to “pushing back the risks” of paying for bank bailouts from taxpayers.

"If there is a risk in a bank our first question should be 'OK, what are you in the bank going to do about that?'," he told Reuters and the Financial Times.

Mr Dijsselbloem's comments came ahead of an announcement by Cyprus' central bank that all the banks in the country except the two biggest will reopen for business on Tuesday, more than a week after they shut down to prevent a run.

Laiki and Bank of Cyprus will remain closed until Thursday, and a withdrawal limit from ATMs of 100 euros ($130) a day will also remain in place until then, the bank said.

Financial institutions in the country have been shut since March 16 as Cyprus and its international lenders struggled to agree on a plan to raise funds so the island could qualify for a bailout package.

The 11th hour bailout package agreed over the weekend was welcomed by Prime Minister David Cameron, and the United States.

Russia, however, responded furiously to the deal - condemning it as 'stealing'.

The arrangement with the EU has brought Cyprus back from the brink but will see investors with more than €100,000 in the nation’s largest banks forfeit a large chunk of their deposits.

"In my view, the stealing of what has already been stolen continues," Prime Minister Dmitry Medvedev was quoted by news agencies as telling a meeting of government officials.

Despite this Russia also signalled it would backstop the European Union's bailout of Cyprus despite anger that the weekend rescue deal would impose heavy losses on uninsured depositors, many of them Russian.

President Vladimir Putin ordered his government to negotiate the restructuring of a bailout loan it granted to Cyprus in 2011 - having rejected Nicosia's request for easier terms during crisis talks last week.

Putin "considers it possible to support efforts ... aimed at overcoming the crisis in the economy and banking system of this island state," his spokesman Dmitry Peskov said.

Meanwhile British Prime Minister David Cameron said the economic situation in Cyprus should be a “reminder of a couple of important home truths” for the UK.

Durring a visit to Ipswich, the Prime Minister said he was glad that savers with less than £100,000 in their accounts would be spared the one-off levy and insisted the Government was doing everything it could to protect soldiers and staff on the island.

But turmoil in Cyprus highlighted a couple of home truths for Britain, he said in a question-and-answer session after a speech on immigration.

"It is good that an agreement has been reached overnight and I think that is welcome for people in Cyprus," Mr Cameron said.

"I think the first proposals of taxing people with bank accounts under £100,000 was a complete mistake and I am glad that has been avoided.

"I think, from Britain's point of view, the situation in Cyprus is a reminder of a couple of important home truths.

"The first is it was right not to join the euro, we are better off outside the euro. We can have our own economic policy, our own monetary policy and mend our fragile economy, which is badly in need of mending.

"But I think the second lesson is that while it is very difficult, there isn't an alternative to getting on top of our deficit, to getting our public spending under control, to making our economy more prone to growth.

"Those difficult steps the Government's taking, there is no alternative to that.

"I think people can see that when they switch on their televisions and see what is happening in other parts of Europe.

"Certainly, we are good friends of the people of Cyprus, we have many connections there, we have many British people living there and we also have the direct responsibility for the soldiers and MoD personnel, the Foreign Office personnel, and we have made very clear that they will be properly protected and we are doing everything we can on that front."

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Ian Thorpe had Rio 2016 in his sights
people
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
Voices
Mrs Brown's Boy: D'Movie has been a huge commercial success
voicesWhen it comes to national stereotyping, the Irish know it can pay to play up to outsiders' expectations, says DJ Taylor
Arts and Entertainment
Curtain calls: Madani Younis
theatreMadani Younis wants the neighbourhood to follow his work as closely as his audiences do
Arts and Entertainment
'Deep Breath' is Peter Capaldi's first full-length adventure as the twelfth Doctor
TVFirst episode of new series has ended up on the internet
Life and Style
Douglas McMaster says the food industry is ‘traumatised’
food + drinkSilo in Brighton will have just six staple dishes on the menu every day, including one meat option, one fish, one vegan, and one 'wild card'
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

C# R&D .NET Developer-Algorithms, WCF, WPF, Agile, ASP.NET,MVC

£50000 - £67000 per annum + Benefits + Bonus: Harrington Starr: C# R&D .NE...

C# Developer (Web, HTML5, CSS3, ASP.NET, JS, Visual Studios)

£40000 - £50000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

C# Developer (ASP.NET, F#, SQL, MVC, Bootstrap, JavaScript)

£55000 - £65000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

C# Payment Developer (Swift, FOX, Vigil, .NET, SQL)

£55000 - £65000 per annum + Benefits + Bonus: Harrington Starr: C# Payment Dev...

Day In a Page

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?