Nicosia, 30/04/2013 (Agence Europe) - In the early evening of Tuesday 30 April 2013, the Cypriot parliament voted by 29 to 27 in favour of the financial bailout package put together by the government and the country's future lenders, against a backdrop of popular discontent and the blaze of relentless sunshine.
In Nicosia, more than 500 people assembled in the afternoon in front of the parliament building to demonstrate their discontent in an event organised by the “Wake up Cyprus” movement (which has more than 9,000 sympathisers) along with the Communist party, Akel. Some 20 people had been camping in front of the building since Monday evening, well aware that their action had little chance of changing events. One, Michalis, told EUROPE that he had been able to talk with one of the two “European Party” MPs likely to support the bailout plan, who had told him that he would be voting in favour of the loan agreement because he didn't see any alternative.
The minimum 29 votes needed to ratify the deal were therefore reached. The plan was opposed by the Akel and Edek parties, which between them have 24 MPs. A source suggests that, on Tuesday morning, the Cypriot parliament approved a number of austerity measures, including a property tax.
Prodromos Prodromou, an MP from the same party, Disy, as the Cypriot president Nicos Anastasiades, told EUROPE that he would be backing the loan agreement with a bitter taste in his mouth. He said some of the agreements made with the troika were necessary, but what he was concerned about was that he was not sure that the programme would work. He said the growth forecasts of the troika (European Commission, ECB and IMF) were over-optimistic and the recession was worse than expected and would require extra austerity measures. He feared that Cyprus might be dragged into the infernal cycle seen in other countries and said that a rejection of the deal by parliament would not have been any help or done anything to prevent Cyprus being destroyed as an international financial centre. Although describing the way banks and their customers had been treated as “abhorrent and unacceptable”, he said the damage had already been done and couldn't be reversed.
Prodromou expects new cuts in public spending and a new batch of austerity measures in the autumn. The reason the government has not yet introduced an austerity programme is mainly because it does not want to launch any further attacks on the population right now, he said, and also because the situation will be clearer later on. He said it was not yet known how many units of production had been destroyed in the process.
In order to enable the state to tick over and ensure the sustainability of the Cypriot debt, the eurozone will lend the country €9 billion and the International Monetary Fund an additional €1 billion, which together account for about 55% of Cypriot GDP. Prodromou said much more would have to be paid for the rest of the programme because the fabric of the economy itself had been damaged.
In March 2013, the Cypriot parliament unanimously rejected an agreement that would have raided all savings across the board through a levy on all banks. Would the first deal have been better? “Perhaps”, said Prodromou. Many people believe that, if Cyprus had approved the first deal, then more would have been expected afterwards, he added.
At the vigil in front of the parliament building, the Wake Up Cyprus supporters were very bitter. Chrisostomos said there was a leadership problem in the country and criticised the attitude of President Anastasiades, who repeatedly promised that savings would not be raided, but who later simply signed up, in a night of talks with the Eurogroup, to a deal drawn up in advance.
Andrea, an Akel sympathiser, recommended leaving the euro, but it was under the aegis of Akel, which had been in the government at the time, that the troika had been asked to help. Now though, Andrea has a banner calling for the troika to go. She said things were different now because they had gone too far with the bail-in, criticising the €9 billion in emergency loans from the ECB for failed bank Laiki. Michalis echoed her on this, saying that they had given this money to the Bank of Cyprus, but “we don't recognise that debt because it was not taken out for the benefit of the Cypriot people”.
Prodromou does not share this interpretation of events. When the austerity package was voted through in December, he said, there was the idea that this was the price to be paid for having some sort of aid but, since then, feelings have changed and there is now the perception that, in reality, it isn't aid. He doubted that, without the prospect of gas resources, Cyprus would manage to remain on its feet. (EL/transl.fl)