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Monday 22 January 2018

What are the options for Cyprus?

POSSIBLE

Q Cyprus achieves an EU loan of all or nearly all the €5.8bn targeted by the bank levy that has been rejected by parliament, remains in the EU and begins the painful process of recovery.

Q The government returns to the idea of a one-off levy on bank deposits of more than €100,000, with accounts holding less than that being protected. This would raise an estimated €2bn, but such an action has already proved fiercely unpopular.

Q The pension funds of three state utilities hand over about €4bn of their reserves to act as collateral on an EU bailout, while Cyprus would ask Russia for the other €2bn.

UNLIKELY

Q Cyprus leaves the euro and returns to the Cypriot pound. Abandoning the single currency may appeal to the national pride of some, but the effects on the economy and on savings would probably be calamitous.

Q In return for lending €5bn, Russia demands gas exploration rights and/or a naval base on the island, which would compensate for the probable loss of Tartus if and when the Syrian regime falls.

Q Archbishop Chrysostomos II, head of the Orthodox Church in Cyprus, suggested mortgaging church assets so the state could issue bonds. Carrying out a proper valuation in time is not regarded as feasible. (© Daily Telegraph, London)

Irish Independent

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