Angry Cypriot MPs were debating on Tuesday a controversial 10-billion-euro EU-IMF bailout deal, with the government warning its rejection would be “catastrophic” for the eastern Mediterranean island’s teetering economy.
Outside parliament, some 400 people demonstrated to protest the package, which has forced Cyprus to radically downsize its bloated banking sector, raise taxes and cut public spending.
A number of them held up signs saying “Oxi” (no in Greek), while others shouted “Fight for your rights” and “Troika out of Cyprus” — a reference to the European Commission, European Central Bank and International Monetary Fund that are providing the bailout.
“Every MP needs to be aware that today marks a historic landmark for our homeland,” government spokesman Christos Stylianides told reporters ahead of the parliamentary session.
“A ‘no’ from the house today would have catastrophic consequences,” he said.
The debate began at about 3:00 pm (0000 GMT), and House speaker Yiannakis Omirou, head of the leftwing Edek party, said a vote should be expected after 7:30 pm.
Parliamentary observers say the package is likely to pass by a razor-thin majority.
Omirou himself said the package was a “barbaric and colonial force,” adding that he agreed with former Eurogroup chairman Jean-Claude Juncker, who said “we treated all Cypriots like bandits and gangsters”.
George Perdiki, the sole MP for the Green Party, painted a gloomy picture.
“The Cypriot people will go hungry. They will endure harsh times, never experienced before in its recent history. That is a fact. The younger generation will emigrate, problems in society will increase and gloom and misery will prevail. The people will be left mendicant and in financial ruin. But, most saddening of all, the people will be left morally ruined.”
The eurozone has forecast that gross domestic product will plunge by 8.7 percent in 2013 and another 3.9 percent next year, with already high unemployment surging.
But Finance Minister Haris Georgiades has said approving the package is a tough but necessary step that has to be ratified without delay.
He warned that without a positive vote, the island would be driven to economic collapse and could even be forced to exit the eurozone.
He urged lawmakers to take “a very difficult but necessary decision” and ratify the agreement struck last month with the troika.
The total cost of the deal to Cyprus has surged from an original 17.5 billion euros to 23 billion, including the 10-billion-euro loan from the troika.
It has triggered widespread discontent on the island, as widespread business failures and job losses are feared.
A government source told AFP the vote “hangs in the balance and could go either way,” with the ruling Disy party and coalition partner Diko “in favour,” the opposition Akel set “to vote against” and Edek undecided.
The governing centre-right coalition holds a slim majority in the 56-member House of Representatives, but only if all of its MPs toe the party line.
If all goes according to plan, Cyprus expects its first tranche of much-needed bailout cash in May.
On Monday, President Nicos Anastasiades said he was planning sweeping reforms in a bid to modernise the battered island, including lifting immunity from prosecution for himself and other politicians.
MPs on Tuesday are also expected to thrash out what Anastasiades called the unprecedented reforms in Cyprus, which has come under pressure from the public and the EU to eradicate perceived political corruption.
Georgiades also called for “structural reforms… to kick-start the economy, saying: “We must also acknowledge the mistakes of the past.”
Cyprus MPs to debate tough EU bailout deal
