Belfast Telegraph

Friday 26 December 2014

Savers reassured over bank deposits

Simon Coveney said he understood why Cyprus has refused to buckle under pressure from European chiefs
Simon Coveney said he understood why Cyprus has refused to buckle under pressure from European chiefs

Irish bank customers will never be taxed on their savings the way Cypriot depositors were targeted in the struggling country's bailout terms, the Government has insisted.

Agriculture Minister Simon Coveney said he understood why Cyprus has refused to buckle under pressure from European chiefs and bleed much-needed funds from its citizens.

But he insisted Ireland will never find itself in a similar position.

"Let me give an absolute guarantee on behalf of the Government. Will this Government look to introduce a Cypriot-style levy on any deposits to raise money?" Mr Coveney said.

"I have spoken to the Finance Minister about this and I am clear as crystal, from a Government point of view, that we will not be targeting bank deposits."

Finance Minister Michael Noonan has been accused by the opposition of being party to a European proposal that ordinary depositors in Cyprus would be taxed on their savings to meet the cost of a bailout.

As Cyprus stands on the brink of banking oblivion, European Union chiefs and the International Monetary Fund have demanded it raise 5.8 billion euro from depositors to secure a much-needed bailout.

The Mediterranean island needs loans of about 10 billion euro (£8.56 billion) if it is to rescue its financial sector, prevent its default and an exit from the euro.

The Cypriot government overwhelmingly rejected demands from Europe to impose a levy of more than 10% on deposits above 100,000 euro.

It must now find an alternative to raising the money it needs to trigger its bailout. The country is hoping to secure funds from Russia, which has bailed it out in the past.

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