German Finance Minister Submits Cyprus Deal to Bundestag

By Andreas Plecko

FRANKFURT--German Finance Minister Wolfgang Schaeuble has submitted the Cyprus bailout deal to Germany's lower house of parliament, the Bundestag. In a letter to Bundestag President Norbert Lammert Saturday, Mr. Schaeuble sought parliamentary approval for the rescue package.

The deal, which Cyprus struck in late March with the European Union and International Monetary Fund, lines up 10 billion euros ($13.11 billion) in financing for the government. It will see Cyprus's second-largest bank, Cyprus Popular Bank PCL (CPB.CP) shut and the country's largest bank, Bank of Cyprus PCL (BOCY.CP), aggressively downsized. Shareholders, bondholders and bank customers with large deposits will also have to carry part of the costs.

In the letter, Mr. Schaeuble said the financial requirements for the remainder of the banking sector is around EUR2.5 billion. Prior to the decision to shut down or restructure banks in Cyprus the capital requirement had been estimated at up to EUR10 billion, according to the letter.

The Bundestag is expected to vote on the deal on Thursday.

Write to Andreas Plecko at [e-mail]