Fresh EU fears as Cyprus orders parliamentary vote over bailout
On Thursday 18th April, Germany became the latest Eurozone country to successfully obtain parliamentary approval for the €23 billion Cyprus bailout. However, questions have arisen over whether Cyprus’ divided 56-seat parliament would be able to push the measure through when it comes up for debate.
So far, Cyprus’ parliament has already approved a number of tax measures deemed necessary for the loan package agreed with the troika, a group made up of the European Commission, European Central Bank and International Monetary Fund, and has entered this month into a memorandum of understanding with the troika, although this is not legally the same as a loan agreement.
Once the loan agreement is drafted, under the Cypriot constitution it will have to be submitted to parliament for discussion, then ratification. This is expected to happen late next week and is causing worry amongst those that fear parliament will not support the move.
Currently, the ruling DISY party, together with junior partners DIKO, are the only parties to openly support the loan agreement, but do not hold a majority in 56-seat parliament. The two main opposition parties, the AKEL and EDEK, have not come out in support of the loan. However, it is possible that the two parties will abstain from voting rather than block the measure.
Adding to worries, the uncertainty on how the Cypriot parliament will vote has come at a time when the European Parliament has heavily criticised Olli Rehn, the European Commission’s economic chief, over the handling of the €23 billion bailout negotiated by the troika.