Cyprus Parliament Narrowly Votes To Accept Bailout

Amid all the stuff going on closer to home, this mess in Cyprus still bears watching:

Cyprus moved a step closer on Tuesday to receiving much-needed aid when its parliament narrowly endorsed a bailout deal drafted amid unprecedented acrimony and calls for the island to exit the eurozone.

In a nail-biting ballot, following hours of heated debate, Nicosia's 56-member House approved the €10bn rescue package with a majority of two votes. Among officials who had warned of a "chaotic default" the result was met with visible relief.

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Highlighting the furore that the agreement has unleashed, however, the deal was wholeheartedly rejected by the island's anti-austerity opposition parties, Akel and Edek. Several lawmakers predicted that its impact on a country that until recently was better known for its robust offshore financial services, would be "far worse" than the devastating invasion it suffered at the hands of an invading Turkish army in 1974.

With the EU-IMF sponsored rescue programme forcing the government to dismantle the banking sector – and forcing depositors, for the first time, to foot the cost of recapitalising banks exposed to debt-stricken Greece – many MPs have virulently denounced the package as containing the seeds of the country's economic destruction.

Indicative of the concerns that the measure might not be passed, the beleaguered president of Cyprus, Nicos Anastasiades, issued a last-minute appeal calling on politicians to think of the island's "greater good".

With bankruptcy looming, the governing coalition warned of "chaotic scenes", with public sector salaries and pensions going unpaid if the programme was voted down.

"Our country is passing through a critical time that calls for a sense of national responsibility and conduct in a manner which is consistent with the greater good," said Anastasiades, a British-trained barrister who assumed power barely two months ago.

In a replay of the scenes that have haunted Greece, protesters demonstrated outside parliament as the vote took place. Many hurled abuse at politicians now widely blamed for the island's economic decline. The Cypriot economy, once one of the most vibrant in the EU, is set to contract by 13% over the next year.

The prospect of the island being pushed into prolonged recession has given way to mounting speculation that perhaps it would be better if it left the eurozone altogether. In the runup to the vote, Akel ratcheted up the pressure by calling for a referendum on the issue.

"We know leaving the euro is an equally painful option, but reinstating a national currency could offer prospects for growth in the future," the party's general secretary, Andros Kyprianou, said.
Increasingly, the island's business elite has embraced the idea that the country would fare better if it dumped the single currency and returned to the Cyprus pound.

Calls for the island to leave the bloc have mounted as the knowledge has also sunk in that the price of international rescue funds will now be €13bn in budget cuts.

Maybe Randi Weingarten can issue a meaningless and useless call for the end to austerity measures?