German FinMin Schaeuble: “Banks closure limited capital flight from Cyprus”

Posted by in Economy

“The Cyprus deal is a ‘fair’ agreement that lies on the German position,” finance minister Wolfgang Schaeuble said during a press conference in Berlin on Monday, after returning from Brussels.

“Europe is in solidarity, Europe remains in solidarity. But you have to remove the causes that lead to such a crisis. The business model of Cyprus was not successful.” Therefore, owners and investors of the banks would now also carry the load.

Schaeuble said also that there has been capital flight out of Cyprus but this has been limited in the  past week thanks to the closure of banks in the Mediterranean island nation.

He declined to provide figures on how much money had been pulled out of Cyprus in recent days or to say  when banks would reopen, saying this was an issue for the European and Cypriot  central banks to assess.

German daily Frankfurter Allgemeine Zeitung (FAZ) claimed that despite banks closure and the freezing of financial transactions last week, more money should have been flown from Cyprus than the previous week. Citing transactions experts FAZ claimed that before the crisis escalation, the liabilities of the Cypriot central bank to the European Central Bank (ECB) had increased daily at approximately 100 to 200 million euros. “Last week alone, financial wealth worth billions of euro could have been flowed out of Cyprus,  although the Cypriot central bank has actually issued a ban.”

Next to Schaeuble, also Chancellor Angela Merkel expressed her pleasure over the Cyprus agreement. She “is happy about the Cyprus deal,” her spokesman Seibert said on Monday. (foxbusiness, focus.de)

PS like a statement issued by the Buckingham Palace: “the Queen-Chancellor is amused”…