Published March 18, 2013
VIENNA – There is room to change the bailout plan for Cyprus to help savers with relatively small deposits, Austrian Finance Minister Maria Fekter said on Monday.
"What happened at the weekend was a big buckle in confidence," she told a panel discussion on the future on Europe.
She said EU finance ministers had proposed a sliding scale of 3.5 to 12.5 percent for a one-off tax on deposits as part of Cyprus's 10 billion-euro ($13 billion) bailout.
"But the ECB rejected it and above all Cyprus itself rejected it. They absolutely wanted a rate under 10 percent, so this large irritation arose. I am convinced one can adjust this and there is still a chance to do something for small savers," she said.
Fekter said the ECB and European Commission had also suggested dipping into Cyprus pension plans, something she opposed given the market beating Hungary took for doing something similar.
Introducing Luxembourg Premier and former eurogroup head Jean-Claude Juncker, she said: "I hope we can learn a lot from your experience, above all to learn how to avoid mistakes like the one from the weekend."
Juncker told the panel discussion that taxing deposits of small investors in Cyprus from the first euro was "completely unjust". Referring to a conference call by euro zone finance ministers, he added: "Now they are in the process of setting that right."
The weekend announcement that Cyprus would impose a tax on bank accounts as part of the bailout by the European Union broke with previous practice that depositors' savings were sacrosanct.
(Reporting by Michael Shields; editing by Ron Askew)