Europe

European press review: Cyprus bailout

European press commentators are apprehensive about the likely success of the European Union/IMF bailout deal for the Cypriot banking system.

Their concerns include public confidence in the respect for European law after the levy on private bank deposits, and the danger of capital flight from other vulnerable banking systems.

Russian commentators in particular reflect concerns about the levy on the large deposits held by Russian companies and citizens on the island.

Ruth Berschens, German financial daily Handelsblatt

This procedure teaches small savers that their accounts are not as secure as was always maintained. Savings of up to 100,000 euros [£86,000; $131,000] are actually protected by law in the EU if banks get into trouble. But now the EU is demonstrating in Cyprus how it can legally get round its own regulations.

Cerstin Gammelin, German daily Sueddeutsche Zeitung

The rescue package is completely incomprehensible when one realises that the Cypriots - unlike the Greeks - can in fact pay back their debts. Nicosia is in the process of exploiting a source of income which will start producing from 2017: natural gas... But the rescuers do not wish to take that into account. They are willing to risk the eurozone losing its first member.

Alexia Kefalas, special correspondent of French daily Le Figaro in Cyprus

Angry Cypriots will have to pay out of their own pockets... In Nicosia, anger gave way to disbelief... Some accuse Germany of trying to "destroy" the status of the island, and others call for protests outside banks first thing on Tuesday morning.

Even Vallerie, economics reporter for French daily Ouest-France

Cypriots have been hit in the wallet by the crisis... This announcement took Cypriots by surprise - it ran counter to government promises... Nine out of the 20 MPs of conservative President Nicos Anastasiades's party have expressed disagreement... Cypriot banks could be forced to remain closed tomorrow [Tuesday] to avoid massive withdrawals.

Artur Galeyev, Russian daily Komsomolskaya Pravda

Nineteen billion dollars. This is, according to respected agency Moody's, the total volume of deposits that Russian banks have placed in Cyprus banks. But in reality the amount could be several times greater. If the levy is introduced, experts expect that Russian businesses could potentially lose around $2bn. It is quite likely that Russian companies will start to leave the island.

Andrei Degtyarev, KIT Finance Bank chairman, interviewed by Russian financial daily RBK

This is expropriation of private property - perhaps only partial, but it is still expropriation. And I think that after this Cyprus will lose the status of a financial centre that it has hitherto enjoyed.

Tatiana Yedovina, Olga Shestopad and Dmitry Butrin, Russian business daily Kommersant

At least some Russian companies will be looking for a jurisdiction other than Cyprus from which to conduct financial operations with the European Union. It is already too late to undo the damage inflicted not only on the reputation of Cyprus as a financial centre, which is already effectively ruined, but also on assessments of corporate risk in the eurozone. These have risen sharply, and require new schemes to defend capital in the European Union.

Alexei Roshchin, Russian daily Nezavisimaya Gazeta

"European civility" and "European legal probity" are - alas! - to a great degree fictional. Or rather they are a luxury for easy times. Once a crisis appears on the horizon, the Europeans' veil of "respect for the law" slips, and you would never have known it was there at all. The current elegant means of letting Cyprus solve its debt problem is... frankly, a common stick-up... And the crisis is still growing... At this rate people in Europe will start eating one another.

Carlos Segovia, Spanish daily El Mundo

Analysts around the world have begun to ask if the precedent of Cyprus will not end up being extrapolated some day, albeit partially, in other southern European countries. This distrust alone complicates the way out of the crisis for Spain and the eurozone in general, because it makes attracting investment, savings and finance even more difficult.

Editorial, Spanish daily ABC

The way the bailout of the financial system is being handled has generated waves of distrust, the repercussions of which may spread to all the corners of the eurozone.

Headline, Italian financial daily Il Sole 24 Ore

The fear of contagion returns - a dangerous precedent that undermines confidence.

Marco Sodano, Italian daily La Stampa

"We hope that the people will understand," the Cypriot finance minister said yesterday. It is best not to bank on this.

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