With the "good morning", each citizen acquired a new debt of 3,500 euros each. Aim to prevent the collapse of the Cypriot banking system.
The Parliament, feeling the urgency of the times, gave with obvious reflection, approval to state support of the People's Bank.
Specifically,
1) The state undertakes a contractor for the issuance of Pre-emptive Rights, amounting to € 1,8 billion, to strengthen its capital base.
2) The issue is addressed to existing shareholders, to the public with a public offer and to a limited circle of persons with a private offer.
3) The state will acquire unallocated shares by granting bonds, lasting one year.
4) The issue price is 10 cents.
5) The state retains its shares for up to five years.
6) In five years, the Bank will be able to buy its shares from the state at the issue price, increased by 5% per year.
The Legislature, however, took another step in an attempt to put a brake on the Golden Boys of Laiki, putting a knife to expenses and earnings.
In particular, it decided:
SALARY AND EXPENDITURE CUT
1) 10% reduction in staff costs in 2012
2) Reduction of up to 8% staff costs in 2013
3) Reduction of salaries and benefits by 12,5% on average
4) 7% reduction in operating expenses in 2012
5) The annual salaries of the chairman, managing director, members of the Board of Directors, general managers, etc. do not exceed the annual salary of directors general of ministries.
The state support of Laiki is accompanied, however, by conditions.
- The Bank will pay a sponsorship fee of 2% of the total issue amount. It is estimated at 36 cm.
- The Bank will appoint within 15 days an independent consultant to prepare a restructuring plan.
- It will take measures to restructure and strengthen the solvency of the Bank.
- It will set a clear timetable for the implementation of the measures.
- consider prospects of merger, acquisition, transfer of activities to another financial institution.
The Parliament also decided to appoint five directors with a veto right in each decision of the Board of Directors.
However, last night, last night, opened in a more intense way the file of responsibilities and concerns about the risk of the country being in the Support Mechanism.
"I consider that it is the duty of both the Parliament and the executive power to investigate the responsibilities, that is, an economic crime must be anatomized to the detriment of the Cypriot people," said the Speaker of Parliament.
"I am very afraid, Mr. President, that tonight we are launching our course towards the Support Mechanism and everyone should keep that in mind. I wish I could be refuted ", said the chairman of the Finance Committee, Nikolas Papadopoulos.
The first moves made by Laiki, after the decision of the Parliament
The first move of Laiki was to issue a morning announcement, to which was attached the decree approved by the parliament for the purposes of informing the investing public. This satisfied the capital market committee, which ruled that there was no reason to suspend the trading of Laiki's share on the stock exchanges of Cyprus and Greece.
Until next Monday, the Hellenic Capital Market Commission expects Laiki to submit the prospectus for approval, with all provisions and timetables, in order to catch the June 30 milestone, when the European Supervisory Authority expires banks.
Despite the positive vote of the parliament in support of Laiki, the bank's share today in the CSE was affected by waves of liquidation and lost 9,9% of its value, falling to 11,8 cents. A parallel downward trend followed the share of Laiki on the Athens Stock Exchange with losses of 9,2%.
From Monday, with the return of the Governor of the Central Bank to Cyprus, there will be a consultation between Vassos Siarlis and Panikos Dimitriadis, because according to the law the Minister will appoint up to 5 members to the Board of Directors of Laiki with the consent of the Central Bank and the Commission. Finance of the Parliament.
Also, with the consent of two of the five members to be appointed by the Minister, the right of veto will be exercised in all decisions of the Board of Directors. Within the next few days, the situation regarding the training of the new structure of the Board of Directors of Laiki will be clarified.
It will first be preceded by a dialogue with the Bank Employees' Guild, as well as the appointment of an independent consultant, who will have to submit a restructuring plan within two months.
The plan must be submitted to the European Commission for approval within 6 months. The reduction of staff salaries and benefits in Cyprus will average 12,5% on an annual basis and will be implemented in stages. At the same time it is ensured that wage cuts will not affect low-paid staff.
Source: SigmaLive