Information regarding the current situation in Cyprus
The session
of the Parliament for discussion about the draft bill for the stability levy
has been postponed to today at 18:00 local time.
In the
meantime a lot of variations about the way the levy, that has been introduced
by the Eurogroup, will apply have seen the lights of publicity, including
scenarios for a levy of:
a)
3% on amounts up to EUR 100,000, increasing to 10% on the next EUR 400,000 and
ending up to 15% on amounts above the level of EUR 500,000 OR
b)
exemption on the first EUR 20,000, with the rates remaining the same as
originally proposed and included in the bill thereafter, i.e. 6.75% up to EUR
100,000 and 9.99% thereafter OR
c)
exemption on the first EUR 100,000 (something which is in line with the
relevant local and EU legislation and which seems to be the option gaining
momentum both locally and at EU levels) with any amounts beyond that level to
be levied a percentage which it is not known so far.
We should
stress, however, that no matter whichever scenario will be put for discussion
and voting in the Parliament this afternoon, based on the information currently
available the most probable (or even almost certain) outcome is that the bill
will be rejected.
The
President of the Republic has already communicated with EU officials to inform
them about the likely outcome of the forthcoming Parliamentary session and has
asked for their support in finalizing the financial programme without a
stability levy, siding also the overall damage to the Euro and the Eurozone and
the EU in general from such a measure, as indicated by the performance of the
financial markets around the world yesterday.
The government
is already examining alternatives which could produce an amount equal or even
higher than the EUR5.8bln that the above measure is expected to generate.
The CentralBank of Cyprus has announced that the banks and other financing institutions
will remain closed both today and tomorrow with the possibility of this bank
holiday to be extended until next Tuesday (Monday is a public holiday in
Cyprus) having very good chances of occurring.
