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New proposal for smaller haircut

21/03/2013 06:09
The government will try on Thursday to reintroduce a new proposal for a haircut on deposits with the simultaneous submission of a proposal for the creation of a fund that will reduce the amount of haircut.

The revised proposal will be put before the meeting of the party leaders at the Presidential Palace.

This proposal received extensive treatment throughout the day and especially by the Council of Ministers that met yesterday at 18:00 and later in individual contacts of President Anastasiades with close colleagues and the President of the Democratic Party Marios Garoyian.

According to what has leaked, the alternative proposal includes the creation of a fund to which the provident funds of the semi-government organizations will contribute and voluntary those who want to support the effort to reduce haircut.

Late last night the night, they pleaded for the contribution of the CB gold reserves of €560 million.

The government argues that the troika has taken into account this alternative proposal and appears to lit first green light.

The proposal will be referred to the House and the plenary to be held in the afternoon.

However, the President reportedly told his close associates that the solution for the rescue of Cyprus should be taken by today, to allow time to schedule the next day.

After the evening session of the Council of Ministers, Foreign Minister Ioannis Cassoulides and Justice Minister, Ionas Nicolaou stayed in the Presidential Palace. The mini conference with the President was attended by Government Spokesman, Christos Stylianides and the Director of the Office of the President, Panayiotis Antoniou.

As for the contacts of Finance Minister, Michalis Sarris in Moscow, messages late last night were not so encouraging.

The Cypriot government does not nurture high expectations from the Russian government, but believes it could achieve the lengthening of the loan of €2.5 billion and a cut in the interest rate.

Yesterday, however, was a difficult day for the political leadership of Cyprus, which realized through contacts in Moscow and Nicosia that the room for maneuver is limited.

Moscow seems not to want to become involved in the conflict of Nicosia with its largest trading partner, the EU, and the troika clarified that without the contribution of Cyprus of €5.8 billion and without haircut, the next step is the liquidation of banks.