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US Treasury welcomes Cyprus rescue plan

The US Treasury Department has welcomed the 'bail-in' agreement Cyprus has reached with international lenders, saying the financial stability in the eurozone was important to the United States.

The US Treasury said the agreement was "critical" and that they were monitoring developments closely.

It is critical to lay the foundation for a return to financial stability and growth in Cyprus. We will continue monitoring developments closely as details are finalized and the agreement is implemented.

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Cyprus bailout deal slammed as 'legalised theft'

Protesters take part in an anti-bailout rally by employees of Cyprus Popular Bank in Nicosia on March 22. Credit: Reuters

The proposed bailout tax on bank accounts in Cyprus amounts to "legalised theft" according to Yury Pyanykh, president of the Association of Russian Businessmen in Cyprus.

Mr Pyanykh told Russia's state news agency RIA Novosti the measure will be successfully challenged in court:

“This is legalized theft. It contradicts fundamental international agreements. If they approve this measure, I can only imagine the number of lawsuits that will be filed and won.”

PM: Cyprus economic woe justifies UK austerity plan

Mr Cameron said: "The situation in Cyprus is a reminder of a couple of important home truths." Credit: Chris Radburn/PA Wire

David Cameron has said the Cypriot banking crisis serves as a "reminder" to the UK that there is "no alternative" to the Coalition's current economic policy.

"While it is very difficult, there isn't an alternative to getting on top of our deficit, to getting our public spending under control, to making our economy more prone to growth," the Prime Minister said when asked about the Cyprus bailout during a visit to Ipswich.

Mr Cameron said the dire situation in Cyprus also proved "we are better off outside the euro", adding: "We can have our own economic policy, our own monetary policy and mend our fragile economy, which is badly in need of mending."

The PM, though, said he welcomed the financial aid given to the island nation and was "glad" those with bank savings under €100,000 would not face a levy, adding: "We are good friends of the people of Cyprus".

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EU task force to oversee Cyprus bailout spending

President Barroso called on Cyprus to "show unity and responsibility" when implementing the agreed rescue package. Credit: Barry Cronin/PA Wire

The European Commission has established a task force to provide "technical assistance to the Cypriot authorities" in implementing the €10 billion rescue package, EU President Jose Manuel Barroso has announced.

The body will be based in Brussels, with a support team in Nicosia, he said in a statement, and its work will "have a strong focus on employment, competitiveness and growth".

President Barroso said the agreed package for Cyprus was "not only about financial stability. It is about restarting the economy."

Regarding the support shown for Cyprus, he added: "As we have shown in the past, Europe faces its challenges together. We do not leave Member States facing a financial crisis alone."

Russia to renegotiate Cyprus loan after EU bailout

Vladimir Putin recently criticised proposals for a bailout-enforced levy on Cypriot bank deposits as "unfair, unprofessional and dangerous". Credit: Ahmet Dumanli/AA/ABACAPRESS.COM

President Vladimir Putin has told his government to negotiate the restructuring of a Russian bailout loan to Cyprus, his spokesman has said.

The announcement signals Moscow's support for a €10 billion bailout, despite concern that Russian depositors in Cyprus could take losses as a result.

Cyprus had requested an extension of an existing €2.5 billion Russian loan, and a reduction in the interest it charges to 2.5 per cent from 4.5 per cent. Talks last week failed to agree on a restructuring.

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