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, March 18.
“What happened at the weekend was a big buckle in confidence,” she told a panel discussion on the future onEurope.
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.
“I hope we can learn a lot from your experience, above all to learn how to avoid mistakes like the one from the weekend,” she said.
The weekend announcement that Cyprus would impose a tax on bank accounts as part of the bailout by theEuropean Union broke with previous practice that depositors’ savings were sacrosanct.
