Schulz, Head of the European Parliament, visits Nicosia

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Cyprus has beimagesen an unwilling ‘guinea-pig’ for the possible rule that will be enforcing a haircut on banks’ deposits, President Nicos Anastasiades explained to European Union members in Nicosia yesterday. ‘Cyprus was treated as an experimental guinea-pig for testing the economic theory of enforcing a haircut on bank deposits and the consequent repercussions which were to follow’ highlighted Anastasiades. Anastasiades conceded there was ‘reckless management by the banks affected’ however he emphasizes that Cyprus’ treatment took place ‘irrespective ‘of those facts. The message was that Cyprus was a partner in need, requesting solidarity but that ‘fundamental EU principle was not respected’ he highlighted. He explained that he really wishes this precedent situation not to be applied elsewhere in Europe because it was one of the hardest measures he had to face. Meanwhile, German Chancellor Angela Merkel said yesterday in Berlin that Eurozone members must be prepared to cede control over some policy areas in order to overcome the debt crisis. According to Merkel words they are not trying to impose German economic model they are just trying to ‘break the vicious circle between sovereigns and banks that has haunted us since the beginning of the crisis’. ‘We are working on this next phase already, with a Commission proposal for a single resolution mechanism. We can’t afford to have a half-built system’ he explained. Schulz explained that Europe is working in a European Investments Bank program to fund smaller business. ‘This is a difficult situation but there are solutions’ he stated. Schulz explained ‘we can debate the restructuring of the banking system and about long term projects but in the short term people need hope and activity’.