Why The Cypriot Parliament Doesn't Have To Vote On The Bailout Deal This Time
The two sides have finally come to a deal, which will see a big hit to uninsured deposits at the country's two largest banks – Bank of Cyprus and Laiki.
Last weekend, after Cyprus and the EU worked out a similar deal, it was struck down in the Cypriot parliament. However, this time around, the Cypriot parliament won't have to approve the new deal.
The difference lies in the way the bailout will be handled. Before, money was to be raised by implementing a nationwide "tax" on deposits at all banks, for both insured and uninsured depositors.
That required a vote to establish a new tax.
Now, haircuts will be forced only on uninsured depositors at Bank of Cyprus and Laiki, tracing the path of a more typical bank restructuring process.
The Cypriot parliament passed nine laws on Friday giving them new powers to resolve Cypriot banks. Because of this, they won't need to vote on the new deal hatched with the EU tonight.