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April 30th, 2013 
Peter Nolan
Posted
The Cypriot parliament has narrowly approved a controversial $13 billion bailout deal agreed with international lenders last month.
At the parliament in the capital Nicosia, 29 Cypriot MPs voted “yes” and 27 “no”, with no abstentions.
The government had warned that Cyrpus faced financial collapse and an exit from the eurozone if the vote did not pass.
Cyprus is now expected to get the first instalment of its $12.7 billion loan from the European Union and International Monetary Fund this month.
In return it must produce $16.5 billion of its own, in part through a large levy on bank deposits of more than about $120,000.
Ahead of the vote, ruling Disy party chief Averoff Neophytou said the bailout was “tough” but the island had no other choice.
“It is a tough memorandum that will mean the more sensitive groups of society needing to make painful sacrifices along with the rest of society,” he said.
“It is the only way because this way, we avoid bankruptcy.”
As MPs debated, some 400 people demonstrated to protest the package, which has forced Cyprus to radically downsize its bloated banking sector, raise taxes and cut public spending.
Disy’s MPs voted in favour, along with coalition partner Diko, and an MP from the centrist Evroko party.
Voting “no” were the communist Akel party, socialist Edek, an MP from the Green party and two independents.
Before the vote, government spokesman Christos Stylianides said “every MP needs to be aware that today marks a historic landmark for our homeland”.
“A ‘no’ from the house today would have catastrophic consequences,” he said.
Finance minister Haris Georgiades had said approving the package was a tough but necessary step that had to be ratified without delay.
Otherwise, he warned, Cyprus would be driven to economic collapse and could even be forced to exit the eurozone.
ABC/AFP
Topics:
business-economics-and-finance,
international-financial-institutions,
cyprus,
european-union
Source Article from http://www.abc.net.au/news/2013-05-01/cyprus-mps-approve-eu-bailout-deal/4661658
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