Officials deny that Cyprus bailout will be a template

Ben Southwood
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TOP EUROZONE officials yesterday rushed to quell market worries by disputing comments that the Cyprus bailout deal could act as a template for future aid packages.

“Cyprus is a special case,” said Ewald Nowotny, the Austrian central bank chief who sits on the European Central Bank’s governing council.

The pushback followed Jeroen Dijsselbloem’s own U-turn, after the Eurogroup head scrambled to play down his original market-spooking comments that future bailouts could be based on the Cyprus blueprint.

But stocks in the Eurozone’s peripheral markets continued to suffer. Greece’s FTSE Athens large cap plunged 5.28 per cent, while Spain’s main index, the IBEX 35, dived 1.84 per cent, and all the main Italian indices sagged by around one per cent.

Meanwhile Cyprus was racked with another bout of widespread protests, including 3,000 students outside parliament, as the country headed into its 12th straight day of bank holidays, and finance minister Sarris warned that depositors with over €100,000 (£84,828) may lose over 40 per cent of their holdings.

This came as Bank of Cyprus chairman Andreas Artemis, along with four other board members, offered the country’s biggest bank his resignation, but was refused.

And ratings giant Fitch put the country on negative watch, saying it could be downgraded soon. The other two major ratings agencies, Moody’s and Standard & Poor’s already slashed Cyprus well into junk territory last week.