Germany's Schaeuble sees parliament support for Cyprus aid

Published April 15, 2013

| Reuters

Germany's lower house of parliament, the Bundestag, will approve an aid package for Cyprus with a solid majority, Finance Minister Wolfgang Schaeuble was quoted on Monday as saying.

Euro zone finance ministers approved a 10 billion euro bailout for the Mediterranean island last Friday and the first tranche of the loan - 9 billion of which will come from the euro zone and 1 billion from the International Monetary Fund - will flow in mid-May.

Germany, the euro zone's largest economy and paymaster, insisted during the bailout negotiations on setting tough conditions for the aid, including the involvement of wealthy depositors in Cypriot banks.

The Bundestag is expected to vote on the bailout on Thursday.

"I am counting on a broad majority in the Bundestag (for the Cyprus package), also with a broad support from the opposition," Schaeuble told the regional Neue Osnabruecker Zeitung.

Franz-Walter Steinmeier of the main opposition Social Democrats (SPD) signaled in an interview at the weekend that his party was likely to support the Cyprus package.

"People in Germany can count on the SPD... not to endanger the European project," he told Die Welt am Sonntag newspaper, making clear that the new deal was more acceptable than an original plan because it protected smaller Cypriot savers.

To cover its financing needs over three years, Cyprus itself will have to come up with 13 billion euros in addition to the international aid package, with the bulk of that sum coming from the closure of its second largest bank, Laiki (Popular), and the restructuring of the largest, the Bank of Cyprus.

Some lawmakers from Germany's ruling center-right coalition have expressed concerns that the money Cyprus itself must find exceeds initial expectations and say there can be no question of increasing the euro zone assistance available to the island.

(Reporting by Gareth Jones Editing by Jeremy Gaunt)

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