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European Parliament disapproves of the way Cyprus bailout was handled

FXstreet.com (Barcelona) - The European Parliament held a session on the handling of the Cyprus rescue on Wednesday morning. The Eurogroup was heavily criticized for forcing losses on savers and for its “appalling communication” during the bailout negotiations.

EU Commissioner for Economic and Monetary Affairs Olli Rehn explained that a more gradual adjustment was not possible as the EU’s contribution to the bailout amounted just to 10 billion euros. He assured that “the support program will enable Cyprus to restore the health of the economy and to create a more sustainable economic model.”

The MEPs however attacked EU’s lack of proper monitoring of the Cypriot banking system, which allowed it for building up too much risk; they also found unacceptable that Cyprus was forced to implement measures which would not be required from larger EU Member States.

The MEPs demanded an explanation of the Troika’s decision-making process. Some suggested alternative solutions for Cyprus, such as reuniting the island to boost growth or proceeding with its exit from the euro.

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