CCTV Script 25/03/13
This is the script of CNBC's news report for China's CCTV on March 25, Monday.
Welcome to CNBC's business daily.
Cyprus averts a meltdown, after EU officials agree on a bailout deal.
Under the new plan, Popular Bank of Cyprus, also known as Laiki, will be shut down, and deposits below 100,000 euros will be shifted to the Bank of Cyprus.
Deposits above 100,000 euros in both banks will be frozen and used to paydown debt.
CNBC's Julia Chatterley was in Brussels and posed a question to Eurogroup Chief Jeroen Dijsselbloem at the press conference after the EU meeting.
[Sound on Tape. Julia Chatterley: Can I ask, with the operations that you're doing with the two banks, whether you're actually going to try and raise the $5.8bn with the bank levies that you'd originally planned to, or whether that's changed, given the recapitalizations.
And second question, do you think that what we've seen over the last week has perhaps undermined the credibility of the European Project, be it a future political union, be it the banking union, and what do you do about that?
Jeroen Dijsselbloem, Eurogroup President: On the $5.8bn, let's forget that figure. We're not using it anymore. We're pretty confident that we can do what's necessary on the side of the government with the $10nbn. What is necessary to restructure the bank will have to come from restructuring the Bank of Cyprus as well as the Laiki Bank. We can't say if it'll be $5.8bn or more or less, that will need to be recalculated after the restructuring has been worked out, what will be needed in terms of a haircut.
As to the second point, the trust in the banking union and the European project. I would say that the urgency for the banking union has only been proven from this whole situation, and the urgency to get on with it has only increased.]
Julia also caught up with Cyprus Finance Minister, Michael Sarris and asked him how he thought the Russians would feel about the deal.
[Sound on Tape Michael Sarris, Finance Minister of Cyprus: I think that the Russians were understandably disappointed with this turn of events. They have had a long, successful, and happy history in association with Cyprus.
This has come partly as a shock, despite the fact that many of these things have been rumoured. Comparing deals is not easy. They have different dimensions, different characteristics - circumstances change.
I think this is a good deal. It addresses issues more fundamentally and decisively and creates the prospects for a better future.
Chatterley: So that relationship is effectively over?
Sarris: No I don't think it's over. In fact, I was just in Russia, and there were many people who said: "We were been with you through good times, and we're going to stay with you through bad times." And there have been others of course who said:"We are disappointed, and maybe we look somewhere else."
But you know, we have very deep relations. Russian people - and these are middle class people, who use Cyprus because of the rule of law and the tax treaties we have. It's a mistake to think that it's a very special class of very rich people. These Russians have their lawyers, their accountants. Many of the have their families living in Cyprus, they have their friends.
So we have a relationship that can withstand a shock like this.]
Could the Cyprus contagion spread to the other EU nations like Slovenia?
The small EU nation has some 7 billion euros of bad loans, which is equal to about 20% of GDP.
10-year bond yields jumped to 5.46 percent on Friday.
That's perhaps not crisis level, compared to 7 percent for Cyprus.
The IMF has said that Slovenia needs about 3 billion euros of funding, and the country's banks also need 1 billion euros of fresh capital
Li Sixuan, from CNBC's Asia headquarters.