THE GOVERNMENT has achieved consensus on the setting up of an Investment Solidarity Fund in a bid to raise the required €5.8 billion that would unlock the EU/IMF’s €10 billion financial assistance package for Cyprus.

The creation of the Fund comes in the wake of parliament’s rejection of a controversial tax levy on banking deposits agreed by the Cypriot government and Eurogroup last Saturday.

“Following a proposal by the President of the Republic there was a consensus reached and a unanimous decision was taken for the establishment of an Investment Solidarity Fund. The proposal is currently undergoing legal and technical processing by the Law Office of the Republic,” said government spokesman Christos Stylianides in a written statement.

President Nicos Anastasiades met with party leaders this morning to discuss a ‘plan B’ that would save the economy from collapse.

Stylianides said the president fully respected parliament’s rejection of the bank levy, and was continuing with the collective effort to find solutions, consulting with heads of state and government, as well as with economic and political actors at home and abroad.

The spokesman said it was “within this framework and in a spirit of consensus and mutual understanding” that today’s meeting between the president and party leaders was held and which led to the unanimous decision on the formation of an Investment Solidarity Fund.

“For this purpose draft, legislation is being prepared by the Law Office of the Republic, which will be presented before the Council of Ministers in a meeting today at 6pm,” he added.

Stylianides called on everyone to show calm and act responsibly so as not to “disturb the spirit of consensus that exists among the political leaders”.

“The president and the government assure the people of Cyprus that the leadership will rise to the occasion and all of us together will lead the country out of the impasse,” he said.

The levy on insured and uninsured depositors was overwhelmingly rejected by the Cypriot parliament last Tuesday. Excluded from the international markets, Cyprus applied last June for financial assistance from the EU bailout mechanism, after its banks took losses of €4.5 billion (amounting to 25 per cent of the island’s GDP) following the Greek sovereign debt haircut.

The island’s banks have been closed since last Saturday as the government and parties try to find a way out of the crisis. The European Central Bank has given Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its banks and inevitable collapse.

Published by:  www.cyprus-mail.com