The President of the European Commission, José Manuel Barroso, said the consequences of Cyprus bailout are impossible to predict. He believes it is not a time to lean back and relax, as the country’s economy is showing no clear signs of recovery yet, and no one can tell what the bailout deal will result in.
“I am confident that the program will work, but let's be honest: at this moment we cannot tell exactly what the impact will be”, Jose Manuel Barroso said at a press conference.
He also stressed that challenges are on the cards for Cyprus as it has already proven to be economically unsustainable. “We should think not only about financial stability. It is about restarting the real economy,” he added.
It should be reminded that the other day Cyprus and the international creditors reached an agreement on a bailout. The anti-deflation plan is based on a new 30% tax on deposits over 100,000 euros at the Bank of Cyprus and a 4% levy on accounts over 100,000 euros at other Cypriot financial institutions. Earlier, the authorities of Cyprus had offered to impose a 6.75% levy on all the deposits below 100,000 euros and a 9.9% tax on bigger amounts; however, this initiative had been turned down by the local lawmakers.
