Cyprus declined the EU anti-crisis initiative on taxing bank deposits. Director of the Foreign Policy Forum (Forum Aussenpolitik – foraus) Maximilian Stern told Swiss 20 minuten about the bankruptcy prospects of Cyprus.
The expert noted that the risk of cash outflow from the country’s banks was still real. If clients retrieve their money, all banks of the country would collapse.
Stern believes that restoring trust would be complicated in Cyprus. Citizens of other EU states may do the same, fearing that the Cyprus problem would happen in their countries.
Stern doubts that bankruptcy in the country is inevitable. The EU and the IMF need to increase payments to Cyprus to save the population. Cyprus may decide to impose taxes on large deposits only. Cyprus reserves will only be enough until May.
The official expresses confidence that the EU will do its best to save Cyprus from bankruptcy. Otherwise, it would become a catastrophe threatening stability in the EU.
