Cyprus Needs Plan C Without Troika
„The Federal Government abuses the emergency credit line of the European Central Bank as a drawn weapon to force Cyprus to agree to the dictate of the troika. This is an unbelievable abuse of an allegedly independent institution“, comments Sahra Wagenknrecht the announcement of the ECB to let the emergency credit line to Cyprus become due on Monday without consent of the troika. The deputy party chair of the party DIE LINKE further:
„Small savers have to remain unaffected. It is only a pyrrhic victory for the Cyprians if in the end the deposits of the rich remain untouched while capital based pensions and gas reserves of the country are liable for the exploding state debt due to the banks bailout. This all under the dictate of the troika who strangles the economy by an unsocial austerity mandate and thus cements the future sovereign default.
Cyprus needs an audited shrinking and a partial insolvency of the banking sector as well as the founding of public „good banks“ after the model of Iceland: to recapitalise the banks and decrease debt, shareholders of the banks as well as bond-owners have to be liable. Deposits by foreigners have to be warranted up to 100.000 Euro and by Cyprian savers and companies up to 500.000 Euro. 20 per cent of deposits above 500.000 Euro and 100 per cent of deposits above 1 mio. Euro are to be blocked and if necessary used for financial recovery.