Cyprus adopts bailout reforms

The Cypriot parliament had approved key financial legislation aimed at placing the country's cooperative banks under central bank control, the government in Nicosia announced Friday morning.

The legislation was a precondition for Cyprus to receive 1.5 billion euros ($1.97 billion) from its international creditors under a 10-billion-euro bailout program agreed with the EU, the European Central Bank (ECB) and the International Monetary Fund (IMF) in March this year.

“Politicians have demonstrated the responsibility that led to an agreement for the sake of what's best for our country,” the leader of the governing DISY party, Averof Neophytou told parliament after a marathon overnight session.

However, parliament needed to vote twice on the bill after it had been narrowly defeated by lawmakers from the opposition left-wing parties, who oppose any bailout conditions.

The legislation now allows the government to take full ownership of cooperative bank shares to restore their depleted capital buffers with the bailout money.

Following initial rejection by the lawmakers, Finance Minister Haris Georgiadis reportedly rushed to parliament to broker a deal with the opposition. According to the Finance Ministry, the compromise reached would allow cooperative banks to buy back their shares if their financial situation improved.

The vote was accompanied by protests of hundreds of people outside the parliament building.

uhe/ipj (Reuters, dpa, AP)