Sharon Bowles MEP, EU Economic and Monetary Affairs Committee Chair, “Appalled” by Cyprus Bailout

"The Cyprus bailout deal is a disaster for EU rules and Single Market principles" - Sharon Bowles MEP.

Sharon Bowles MEP, Chair of the European Parliament's Economic & Monetary Affairs Committee, has said she is "appalled" by the Cyprus bailout, which includes 'bailing-in' some guaranteed deposits - i.e. swapping them for shares.

Sharon Bowles MEP said:

"This grabbing of ordinary depositors' money is billed as a tax, so as to try and circumvent the EU's deposit guarantee laws. It robs smaller investors of the protection they were promised. If this were a bank, they would be in court for mis-selling.

"The lesson here is that the EU's Single Market rules will be flouted when the Eurozone, ECB and IMF says so. At a time when many are greatly concerned that the creation of the 'Banking Union', giving the ECB unprecedented power, will demote the priorities of the Single Market, we see it here in action.

"Deposit guarantees were brought in at a maximum harmonising level so that citizens across the EU would not have incentive to move funds from country to country. That has been blown apart.

"What else will be blown apart when convenient? All the capital requirements we have slaved over, what about the new recovery and resolution rules? What does this mean for confidence in cross-border banking and resolution and preventing the fragmentation of the banking sector?

"When the dust has settled on this deal, which I hope it never does, we will see that the Single Market has been sold down the river for a shoddy price. All the worse as the consequences for Cyprus of the Greek
bond haircuts were obvious."

Sharon Bowles is an MEP for South East England and lives in South West Herts