Schäuble: Cyprus’ bankruptcy will endanger Greece

During his statement earlier today, before the Federal Parliament, Germany's Finance Minister Wolfgang Schäuble defended the bailout plan for Cyprus, as it was decided by the Eurogroup.

Schäuble reiterated that "the Cyprus problem was the oversized banking sector" and that "there can be no solution without its drastic reduction." He pointed out that the European Commission, the European Central Bank and the International Monetary Fund, assert that Cyprus is a systemic threat to other eurozone countries, which makes the rescue more than needed. "If we do not help, Cyprus will no doubt be driven into bankruptcy thus endangering other countries, such as Greece."

Regarding the general situation in the Eurozone, he said that Ireland and Portugal show that reform programs are having an effect and that the credibility of the markets is gradually coming back.

The vote is expected to be completed without problems. Social Democrats and Greens said they will vote for the package, as it includes what they have requested - the participation of depositors in the bailout, but not of those with deposits less than 100,000 euros - while the economic wing of the Christian Democrats will vote against, having advocated Cyprus’ exit from the Eurozone.

The newly established political party "Alternative for Germany» (AfD) has requested by letter addressed to all MPs to vote against the bailout for Cyprus, while the Federal Constitutional Court in Karlsruhe rejected yesterday a request for a preliminary injunction order to not hold today’s voting in parliament.