Cyprus welcomes ECOFIN agreement, ready to intervene

Cyprus has welcomed today’s agreement by European Union Finance Ministers and said it is ready to intervene, if need be, to protect its banking system, Finance Minister Charilaos Stavrakis said, in a written statement.

The statement was issued in Luxembourg after ECOFIN committed itself to safeguarding the European credit and financial system. The 27 EU Finance Ministers also agreed to increase from 20.000 euro to 50.000 euro the guarantee of a deposit, should a credit institution declare bankruptcy.

In his statement, Stavrakis said the government is ready to support and protect the banking sector and the bank deposits, should the need arise.

“We have agreed that we need to be ready to take appropriate action to support the banks and the depositors, if necessary” Stavrakis said, adding that the agreement reached today includes specific guidelines which EU member states should apply if they have to intervene.

According to Stavrakis, “any kind of intervention must be temporary, it must safeguard the interests of the taxpayer and aim at structural changes of banking institutions”.

Each EU member may take any necessary measures to maintain stability of their credit and financial systems either through cash flow from the Central Bank to the banks or through supportive moves to the banks and strengthening of plans to protect depositors.

The government, he said, is monitoring closely developments in the financial sector in cooperation with the competent authorities.

“Cyprus’ banking system remains healthy”, he said, underlining though that if there is any problem, the government will take all the necessary measures to fully support both the banks and the depositors, within the framework of what has been agreed in ECO-FIN.