Cyprus passes bank bailout conditions

 
Oliver Smith
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THE CYPRIOT parliament narrowly avoided placing their €10bn (£8.4bn) bailout in jeopardy today, when it approved legislation to bring Cyprus’ cooperative banks under the supervision of its central bank.

Cyprus initially rejected the legislation when politicians from the island’s left-wing opposition parties opposed the bailout conditions.

In a voting session today, the parliament agreed to the clause enabling cooperatives to receive €1.5bn in bailout money.

Parliamentary approval for restructuring cooperative banks, which are small commercial lenders, is crucial to Cyprus receiving the next aid instalment of €1.5bn from international lenders. The money will be ploughed into the lenders to recapitalise them.

In a second vote in the early hours of Friday, parliament approved the restructuring of the cooperative banks, finance ministry sources said.

Cyprus and lenders from the International Monetary Fund (IMF) and the European Commission agreed on a €10bn bailout loan to the island in March, €9bn of which comes from the Eurozone while €1bn comes from the IMF.

The eurozone loans will have an average maturity of 15 years.