BRUSSELS // The eurozone struck a deadline-day deal with Cyprus today to resurrect a bailout for its government, but only after a radical downsizing of the island's financial sector.
Cyprus President Nicos Anastasiades battled for 12 hours with his eurozone partners and the IMF.
In the end however, he let one banking chain go to the wall and left major investors in the island's biggest bank — many of whom are Russian — take a giant hit.
Mr Anastasiades said he was "content" with the deal.
And the head of the Eurogroup of finance ministers, Jeroen Dijsselbloem of the Netherlands, insisted: "We've put an end to the uncertainty that affected Cyprus and the euro area over the last few days."
Under the terms of the agreement the island's second largest lender Laiki (Popular Bank) will be wound up overnight, an operation Mr Dijsselbloem said would deliver a €4.2-billion ($5.5bn) saving.
Small savers would be protected.
But German Finance Minister Wolfgang Schaeuble told journalists: "Unsecured deposits of more than €100,000 are frozen and will participate in the necessary recapitalisation" of the banking sector.
Loans to the government in Nicosia once the parliament there approves the deal in April, will total €10bn ($13bn).
The Bank of Cyprus, the island's biggest lender, survives — but it will have to endure a major "haircut" on all deposits of more than €100,000.
That is a massive blow to its major investors — and the bank holds the lion's share of the island's Russian deposits.
Cypriot Finance Minister Michalis Sarris conceded that Russia's reaction would likely prove "very complex", with "loyal international partners disappointed and disillusioned."
As the crisis unfolded last week, Russian leaders refused to supply fresh aid or extend a 2014 repayment date on an existing 2.5-billion-euro loan to Cyprus.
But the previous plan for a raid on all savings, which last week provoked angry responses from everyone from Cypriot pensioners to Russian President Vladimir Putin, has been ditched.
Key details of the deal remained sketchy, with EU and IMF officials working out the likely percentage levels "over the coming weeks".
Mr Dijsselbloem could not say when the banks on Cyprus would reopen, nor when restrictions on cash withdrawals and other capital controls would be eased.
The banks had been scheduled to reopen on Tuesday after 10 days.
The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
SERIE A FIXTURES
Friday Sassuolo v Torino (Kick-off 10.45pm UAE)
Saturday Atalanta v Sampdoria (5pm),
Genoa v Inter Milan (8pm),
Lazio v Bologna (10.45pm)
Sunday Cagliari v Crotone (3.30pm)
Benevento v Napoli (6pm)
Parma v Spezia (6pm)
Fiorentina v Udinese (9pm)
Juventus v Hellas Verona (11.45pm)
Monday AC Milan v AS Roma (11.45pm)
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
Janet Yellen's Firsts
- In 2014, she became the first woman to lead the US Federal Reserve
- In 1999, she became the first female chair of the White House Council of Economic Advisers
The bio
Favourite vegetable: Broccoli
Favourite food: Seafood
Favourite thing to cook: Duck l'orange
Favourite book: Give and Take by Adam Grant, one of his professors at University of Pennsylvania
Favourite place to travel: Home in Kuwait.
Favourite place in the UAE: Al Qudra lakes
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
