The Central Bank of Europe said to Cyprus government that it would remove all its support for the banking sector of Europe. They warned them, saying that if the government did not agree on bailout, then their support would be withdrawn. This led the politicians to think of shifting to the ready to use plan B. So what is Plan B about? Well, it says that Laiki bank, that is the second largest bank, should be reconstructed. This new plan is expected to remove bankruptcy.
The streets were full of tensions, and worry prevailed all over. The bank workers started crowding up on streets and protesting. The bank workers started gathering in huge crowds in front of the parliament building. The people were protesting because they didn’t want the second largest supporting bank to be split. The news of closing down of Laiki brought tension to everyone, and nobody wanted it to be split into a bad part and a good part. All this was because of the ultimatum given by ECB. They gave them a time limit until Monday, and said that they would remove support if their conditions were not agreed by Monday. The president said that they would decide a criterion that would help them draw up a large amount of money. They had the choice to raise many billions of Euros or see the collapse of their banking sector.
The tensions caused another bill to be passed. It was about putting restriction on the drawing out of money from the country bank. The tension rose mainly because, if the bailout was not passed, the country would suffer huge loss as two of its large banks, the ECB and the Laiki, would collapse. The Laiki cash machines were full of queues of people and it resulted in the stock market being closed. The political leaders in Cyprus started emergency discussions to raise a huge amount of money.
Despite of all the tensions that prevailed the central bank governor of Cyprus said that he was hopeful. He knew that the deal would be reached in time, and there won’t be many problems. He was hopeful that soon a plan would be made to support Cyprus, before the deadline of Monday, that the ECB issued them. This also resulted in Russia being able to get involved in the personal matters of the European Union. In fact, some even think of the situation as an amazing chance for Russia to play with the European Union. However, discussions are going on, and emergency meetings are held all around, but the final conclusions are not coming to light. Things do not seem clear.
When Russia was asked to buy the assets in Cyprus, the three major banks of Russia, refused. However, some gas supplies have been discovered, and other natural resource companies are ready to tap their resources. Time is running for Cyprus as Monday is the deadline that is not too far. Cyprus needs to reach a conclusion as soon as possible because time is running out. Let us see what finally happens.
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