Cyprus parliament set to vote on bailout

EUCyprus/Wikipedia

NICOSIA, Cyprus Cyprus' lawmakers are voting Tuesday on a multi-billion bailout agreement aimed at preventing the country from going bankrupt.

The 56-seat parliament is expected to narrowly approve the 23 billion-euro ($30 billion) deal that the country struck with its euro partners and the International Monetary Fund last month.

The government has warned the agreement's rejection will mean the country's economic collapse and possible exit from the euro, which is used by 17 European Union countries.

Cypriot President Nicos Anastasiades appealed to lawmakers to act with the national interest in mind.

"What we're called upon today to do is to adopt a loan agreement that will allow our country to breathe and to give us the chance to overcome whichever problems we're facing amid this crisis," Anastasiades told reporters.

But anger still lingers over the deal's terms which include forcing depositors to take major losses on savings over 100,000 euros in the country's two biggest lenders. Second-largest lender Laiki which was worst affected by its exposure to toxic Greek debt and loans is being wound down and folded into the bigger Bank of Cyprus.

Adding to the frustration among local businesses and ordinary Cypriots are a string of capital controls such as a 300-euro daily withdrawal limit that authorities imposed last month to prevent a run on banks the first such controls that have been introduced in the common currency's 14-year history.

The communist AKEL and socialist EDEK parties said they will vote against the agreement to protest what they said is a deal that undermines the country's sovereignty and leads to social misery.

A mass demonstration called by left-wing trade unions and organizations is planned outside the parliament during the vote.

Voting in favor of the agreement will be the ruling, center-right Democratic Rally party along with ally Democratic Party, which together hold exactly half the seats. Right-wing European Party leader Demetris Syllouris is also expected to cast an approving vote.

Other European parliaments, including those of Germany and the Netherlands, have already signed off on the accord and Cypriot lawmakers have already approved most of its terms.

Ahead of the vote on the bailout, Cypriot lawmakers approved additional, bailout-mandated public sector pay cuts and a property tax.

Cyprus' state coffers are effectively empty. Government spokesman Christos Stylianides said that once the agreement is approved, the first installment of bailout cash should arrive by mid-May.

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