Cyprus strikes last-minute bailout deal

By Danielle Wiener-Bronner
March 25, 2013

Cyprus and the EU strike bailout deal hours before deadline, John Kerry makes surprise visit, and the Free Syrian Army founder loses his leg in a blast. Today is Monday, March 25, and this is the World Wrap, brought to you by @dwbronner and @clarerrrr.



A combination of four pictures shows Germany’s Finance Minister Wolfgang Schaeuble as he addresses a news conference in Berlin on March 25, 2013.  REUTERS/Fabrizio Bensch

An end to the bitter Cyprus bailout saga. After nearly a week of uncertainty, the Cypriot parliament finally agreed on a bailout plan that will close its second-largest bank and seize funds from uninsured bank accounts. Cyprus rejected on Tuesday an EU plan requiring a tax of roughly ten percent on bank accounts above 100,000 euros, and a comparable but more modest figure on smaller accounts. The parliament was forced to revisit the offer after Russia rejected requests for aid. The final plan takes pressure off of small depositors:

Swiftly backed by euro zone finance ministers, the plan will spare the Mediterranean island a financial meltdown by winding down the largely state-owned Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a “good bank”. Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki’s debts and recapitalize Bank of Cyprus through a deposit/equity conversion.

Cyprus government spokesman Christos Stylianides said the government will seize about 30 percent of the uninsured accounts. The funds are expected to raise 4.2 billion euros towards the 10 billion euro EU bailout. The plan will affect Russian accounts, which make up a large portion of Cyprus’ non-EU deposits. Russian Prime Minister Dmitry Medvedev expressed anger over the deal, saying that “the stealing of what has already been stolen continues.” German Chancellor Angela Merkel said she was “very pleased” by the bailout, which is expected to save Cyprus from a crash that would have forced it out of the euro zone.

John Kerry drops in on Afghanistan unannounced ahead of Taliban talks.  Secretary of State John Kerry paid a surprise visit to Afghanistan on Monday to meet with Afghan President Hamid Karzai in an attempt to stabilize the country before the U.S. withdrawal in 2014, according to an unnamed official:

Kerry and Karzai will discuss a host of issues including Afghan reconciliation, the transfer of security responsibility to Afghan forces and Afghanistan’s elections, the official told reporters. Karzai’s government is trying to open formal negotiations with the Taliban, who have remained resilient in the face of superior NATO firepower in the war now in its 12th year.

Kerry’s visit comes days ahead of Karzai’s trip to Qatar, where he will meet with Taliban officials to discuss a peace process and possibly opening a Taliban office for negotiating with Afghanistan. Karzai’s trip marks the first time an Afghan president will hold such talks in Qatar.

Syrian rebel leader loses leg in blast. The founder of the Free Syrian Army (FSA) was wounded in an explosion in al-Mayadin last night. Colonel Riad al-Asaad is now receiving treatment in Turkey, according to a Turkish official:

Syrian opposition sources said Asaad had been hit by a car bomb in the city of al-Mayadin, south of Deir al-Zor in eastern Syria. These accounts could not immediately be confirmed. “The attempt to assassinate Colonel Riad al-Asaad in Deir al-Zor is part of an attempt to assassinate the free leaders of Syria,” said Moaz al-Khatib, who resigned on Sunday as the head of the opposition Syrian National Coalition.

Asaad was one of the first senior officers to leave Syria’s military in 2011. He was not part of the Western-backed command of the FSA, and had been mostly residing with his family in a camp in Turkey since he defected from the Syrian army. Asaad’s injury follows the resignation of Moaz Alkhatib, the former head of Syria’s main, moderate opposition group on Sunday. Alkhatib’s exit makes way for the emergence of a more extreme opposition party, leaving Western support for Syria’s rebel forces in a precarious position.

Nota Bene: Ongoing riots in Myanmar have destroyed homes and ravaged towns. Reuters photographers have captured a series of images documenting the turmoil (Warning: includes graphic content).

Standouts:

Biblical swarm - On the eve of the first Passover Seder, Israel again attempts to eradicate locusts which have been plaguing the country for weeks. (The Times of Israel)

Dr. Jazz - Stanley Kubrick wanted to make a film about jazz in the Third Reich. (The Atlantic)

Knox redux - Italy is considering retrying Amanda Knox, acquitted in 2011, for murder. (CNN)

Last ditch bid against gay marriage - 300,000 protesters gathered in Paris to protest a bill allowing same-sex couples to wed and adopt children. (Al Jazeera)

Stop the presses - The LA Times’ editorial board argues that Britain’s new press regulations go too far. (The Los Angeles Times)

From the File:

  • Rebel mortar fire hits Damascus, army gunners retaliate
  • Central African Republic Rebel chief to name power-sharing government
  • China’s Xi tells Africa he seeks relationship of equals
  • Berlusconi offer fails to end Italy’s political stalemate
  • Myanmar government struggles to contain anti-Muslim hostility

 

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/