Published March 16, 2013
BERLIN – Germany's finance minister said on Saturday he would ask parliament to agree the outline of a euro zone bailout for Cyprus as soon as possible, to allow the island's international lenders to hammer out details.
Hours after euro zone ministers approved 10 billion euros ($13 billion) for Cyprus to stave off bankruptcy, Wolfgang Schaeuble briefed parliament's budget committee and said he would ask the lower house - which has a say on all euro zone rescues - to support the deal.
"I will now immediately propose to the Bundestag to agree such a mandate for the troika (of lenders) so that it can work out the details of the program," Schaeuble told Reuters.
Cyprus, whose economic troubles stem from its banks' heavy exposure to bailed-out Greece, requested aid from the European Union and the International Monetary Fund last June.
Eight months of talks on a package turned the tiny island into a big headache for the euro zone, triggering concerns of a financial collapse that might reignite the bloc's debt crisis.
The Bundestag will likely have to vote on the outline of the deal this week, which is the last before the Easter break. German Chancellor Angela Merkel has a majority in the lower parliamentary house.
Schaeuble said the house would then likely debate the full Cyprus program in the second half of April before giving its final go-ahead.
He said the deal distributed the costs of the bailout fairly and would reduce the Cypriot banking sector to a sustainable size.
The Bavarian sister party of Merkel's Christian Democrats, the Christian Social Union (CSU), which has been critical of bailouts in the past, indicated on Saturday it would agree to the Cyprus plan.
CSU leader Horst Seehofer said he could agree if investors and banks in Cyprus had to bear their share of their burden and any aid came with obligations for the country. He has the impression this was the case, following conversations with Schaeuble, he said.
(Reporting By Matthias Sobolewski, Additional reporting by Irene Preisinger in Munich, Writing by Sarah Marsh)