ECB: cannot help Cypriot banks after Monday unless European-IMF aid program in place [View all]

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Last edited Thu Mar 21, 2013, 06:13 AM - Edit history (1)

Source: Star Tribune

NICOSIA, Cyprus - The European Central Bank says it will keep emergency aid for Cyprus' troubled banks in place at least until Monday but will have to cut it off after that unless an international rescue program is drawn up.

The ECB is keeping the Cypriot banks alive by allowing them to draw on emergency support from the local central bank. But the ECB has said it would cut that aid off if there is no bailout deal soon.

The ECB said Thursday that its governing council decided to maintain the current level of so-called Emergency Liquidity Assistance until Monday.

But it says that, after that, such assistance can only be considered if an EU-IMF program is in place that would ensure the banks' solvency.

Read more: http://www.startribune.com/business/199133241.html

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Europe sets Cyprus bailout deadline, banks face cutoff.

(Reuters) - The European Central Bank gave Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its crippled banks and inevitable collapse.

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Officials said new options discussed on Thursday could include nationalising pension funds of semi-state companies, issuing an emergency bond linked to future natural gas revenue or a revised bank deposit levy hitting only large investors.

The European Central Bank, which has Cyprus's banks on a liquidity lifeline, said it had until Monday to get a deal in place, or funds would be cut off.

"Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks," it said.

http://uk.reuters.com/article/2013/03/21/uk-eurozone-cyprus-idUKBRE92F07R20130321

The last para is important. The ECB is saying "its our offer or nothing - if you don't accept it we will lock down on Monday ". They are attempting to preclude an alternative offer from Russia.