- European Union Economic and Monetary Affairs Commissioner Olli Rehn
Struggling into the early-morning hours to avoid a collapse of Cyprus's banking system, the European officials agreed a bailout deal for Cyprus after a week of uncertainty. In order to keep the country in the Eurozone, Cyprus will receive a 10 billion euro aid for international lenders, however, a deal comes at a heavy price. Nation's second-largest bank, Laiki (Popular) Bank, will be closed and deposit-holders with more than 100,000 euros will face big losses, while all deposits under 100,000 euros will be protected. All deposits above 100,000 euros, which are not guaranteed under EU law, are going to be frozen and aimed to resolve bank's debts and recapitalize the Bank of Cyprus. Moreover, officials warned that the island is facing a deep recession with many businesses to shut.
"It's been yet another hard day's night," European Union Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels early today. "There were no optimal solutions available, only hard choices."
"This solution we reached tonight doesn't have the downsides that the solution of last week did," said Dutch Finance Minister Jeroen Dijsselbloem, chairman of the euro ministers' panel. He said the deal was beyond the range of "political possibilities" a week ago.
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